FOR IMMEDIATE LAUNCH 2011-73
Washington, D.C., March 28, 2011 вЂ“ The Securities and Exchange Commission today announced so it has acquired a court purchase freezing the assets of two pay day loan organizations and their owner faced with perpetrating a $47 million providing fraudulence and Ponzi scheme .
The SEC alleges that John Scott Clark of Hyde Park, Utah, promised investors astronomical yearly comes back of 80 per cent to their opportunities in their businesses вЂ“ Impact money LLC and Impact Payment Systems LLC. Investors had been told their funds could be held in split bank accounts and utilized to invest in loans that are payday other facets of the firmsвЂ™ operations. Nevertheless, Clark rather commingled investor funds into just one pool and utilized them to help make unauthorized investments, pay fictitious earnings to previous investors, and fund his very own lifestyle that is lavish.
- SEC Problem
- Litigation Release No. 21903
вЂњInvestors had been guaranteed returns that are extraordinary Clark was really diverting their funds in order to make such extraordinary personal acquisitions as a completely restored classic 1963 Corvette Stingray,вЂќ said Ken Israel, Director of this SECвЂ™s Salt Lake Regional workplace. вЂњClark recruited brand brand new investors through recommendations from previous investors whom thought the Ponzi payments they received were real comes back on the investments and sought to generally share the profitable possibility with household and company associates.вЂќ
The SEC alleges that as well as buying numerous high priced vehicles and snowmobiles, Clark took investor funds to shop for a property movie theater, bronze statues along with other art for himself.
Based on the SECвЂ™s problem filed in U.S. District Court when it comes to District of Utah, Clark lured at the very least 120 investors into their scheme. Besides word-of-mouth referrals from earlier in the day investors, Clark additionally recruited investors by attending trade events in several states, attending loan that is payday, and having to pay salespeople to locate prospective investors to generally meet with Clark. He paid one salesperson significantly more than a half-million dollars over a period that is multi-year find prospective investors and attend cash advance conferences and industry events.
The SEC alleges that from at the least March 2006 to September 2010, Clark while the Impact businesses raised funds from investors for the stated purposes of funding payday advances, buying listings of leads for pay day loan clients, and having to pay ImpactвЂ™s working costs. Effect failed to circulate a personal positioning memorandum or just about any other document disclosing the character associated with investment or even the dangers included to investors. The SECвЂ™s complaint charges Impact and Clark with fraudulently attempting to sell securities that are unregistered.
In line with the SECвЂ™s problem, Clark regularly changed investor account statements supplied to him by ImpactвЂ™s accounting department to generate artificially high yearly prices of return. The changed account statements with purported earnings had been then delivered to investors. Account statements to clients revealed annualized returns varying from 30 % to significantly more than 200 per cent.
The court has appointed a receiver to preserve and marshal assets for the benefit of investors in addition to the asset freeze approved late Friday. The SECвЂ™s problem seeks an initial and permanent injunction since well as disgorgement, prejudgment interest and economic charges from influence and Clark.
This matter was examined by Jennifer Moore, Justin Sutherland and Marie Elliott associated with SECвЂ™s Salt Lake Regional workplace, therefore the litigation shall be led by Tom Melton. The SEC appreciates the assistance of the Utah Division of Securities in this matter.