FOR IMMEDIATE RELEAS
The Securities and Exchange Commission today announced it has acquired a court purchase freezing the assets of two pay day loan organizations and their owner faced with perpetrating a $47 million offering 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 on the opportunities in their businesses вЂ“ Impact money LLC and Impact Payment Systems LLC. Investors had been told their cash could be held in split bank records and utilized to finance loans that are payday other components of the businessesвЂ™ operations. But, Clark alternatively commingled investor funds into just one pool and utilized them to create unauthorized investments, pay fictitious earnings to previous investors, and fund his very own luxurious life style.
вЂњInvestors had been guaranteed extraordinary returns while Clark ended up being really diverting their cash to help make such extraordinary personal purchases as a totally restored classic 1963 Corvette Stingray,вЂќ said Ken Israel, Director of this SECвЂ™s Salt Lake Regional workplace. вЂњClark recruited brand new investors through recommendations from earlier investors whom thought the Ponzi re re re payments they received had been real comes back to their investments and sought to generally share the opportunity that is lucrative household and company associates.вЂќ
The SEC alleges that as well as purchasing numerous costly vehicles and snowmobiles, Clark took investor funds to acquire a house movie theater, bronze statues as well as other art for himself.
In line with 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 previous investors, Clark additionally recruited investors by attending industry events in a variety of states, attending cash advance seminars, and spending salespeople to find possible investors to meet up with Clark. He paid one salesperson significantly more than a half-million dollars more than a period that is multi-year locate possible investors and attend cash advance conferences and industry events.
The SEC alleges that from at the very least March 2006 to September 2010, Clark and also the effect companies raised funds from investors when it comes to reported purposes of funding payday advances, buying listings of leads for pay day loan clients, and having to pay ImpactвЂ™s running costs. Effect would not circulate a placement that is private or other document disclosing the character associated with the investment or the dangers included to investors. The SECвЂ™s grievance charges influence and Clark payday loans online Illinois with fraudulently attempting to sell unregistered securities.
In accordance with the SECвЂ™s problem, Clark regularly altered investor account statements supplied to him by ImpactвЂ™s accounting department to generate artificially high yearly rates of return. The account that is altered with purported earnings had been then provided for investors. Account statements to customers revealed annualized returns varying from 30 % to a lot more than 200 per cent.
Aside from the asset freeze authorized late Friday, the court has appointed a receiver to protect and marshal assets for the main benefit of investors. The SECвЂ™s grievance seeks an initial and permanent injunction since well as disgorgement, prejudgment interest and monetary charges from influence and Clark.
This matter ended up being examined by Jennifer Moore, Justin Sutherland and Marie Elliott associated with the SECвЂ™s Salt Lake Regional workplace, and also the litigation will be led by Tom Melton. The SEC appreciates the help of the Utah Division of Securities in this matter.