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 payday that is online companies and their owner charged with perpetrating a $47 million providing fraudulence and Ponzi scheme.
The SEC alleges that John Scott Clark of Hyde Park, Utah, promised investors astronomical annual returns of 80 per cent on the investments in their businesses вЂ“ Impact Cash LLC and Impact Payment Systems LLC. Investors had been told their funds will be held in separate bank reports and utilized to invest in loans that are payday other facets of the businessesвЂ™ operations. Nonetheless, Clark alternatively commingled investor funds into an individual pool and utilized them to help make unauthorized investments, pay fictitious earnings to previous investors, and fund his very own luxurious life style.
- SEC Issue
- Litigation Release No. 21903
вЂњInvestors had been guaranteed extraordinary returns while Clark had been really diverting their funds in order to make such extraordinary personal acquisitions as a totally restored classic 1963 Corvette Stingray,вЂќ said Ken Israel, Director associated with the SECвЂ™s Salt Lake Regional workplace. вЂњClark recruited brand brand brand new investors through recommendations from earlier in the day investors who thought the Ponzi re re payments they received had been real comes back on the investments and sought to generally share the profitable possibility with household and company associates.вЂќ
The SEC alleges that along with purchasing numerous costly vehicles and snowmobiles, Clark took investor funds to acquire a property movie movie theater, bronze statues as well as other art for himself.
According to the SECвЂ™s problem filed in U.S. District Court for the District of Utah, Clark lured at the least 120 investors into their scheme. Besides word-of-mouth referrals from previous investors, Clark additionally recruited investors by attending industry events in various states, attending pay day loan seminars, and spending salespeople to find prospective 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 find 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 together with effect organizations raised funds from investors when it comes to reported purposes of funding payday advances, buying listings of leads for cash advance clients, and having to pay ImpactвЂ™s working expenses. Effect would not circulate a placement that is private or other document disclosing the type associated with the investment or the dangers included to investors. The SECвЂ™s grievance charges influence and Clark with fraudulently attempting to sell unregistered securities.
In accordance with the SECвЂ™s issue, Clark regularly changed investor account statements offered to him by ImpactвЂ™s accounting division to produce 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 a lot more than 200 %.
Besides 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 issue seeks an initial and injunction that is permanent 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 regarding 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.