FOR IMMEDIATE RELEAS
The Securities and Exchange Commission today announced so it has obtained 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 Cash LLC and Impact Payment Systems LLC. Investors had been told their funds could be held in split bank reports and utilized to invest in pay day loans and other facets of the businessesвЂ™ operations. Nevertheless, Clark alternatively commingled investor funds into an individual pool and utilized them which will make unauthorized investments, pay fictitious profits to previous investors, and fund their own lifestyle that is lavish.
вЂњInvestors had been promised returns that are extraordinary Clark ended up being really diverting their funds in order to make such extraordinary personal purchases as a completely restored classic 1963 Corvette Stingray,вЂќ said Ken Israel, Director regarding the SECвЂ™s Salt Lake Regional workplace. вЂњClark recruited new investors through recommendations from earlier in the day investors whom thought the Ponzi re payments they received had been real comes back on the investments and sought to share the opportunity that is lucrative household and company associates.вЂќ
The SEC alleges that as well as purchasing numerous cars that are expensive snowmobiles, Clark took investor funds to buy 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 trade events in different states, attending loan that is payday, and having to pay salespeople to find prospective investors to fulfill with Clark. He paid one salesperson significantly more than a half-million dollars more than a multi-year duration to find prospective investors and attend cash advance conferences and industry events.
The SEC alleges that from at the very least March 2006 to September 2010, Clark as well as the 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 operating that is impactвЂ™s. Effect would not circulate a placement that is private or every other document disclosing the character regarding the investment or even the dangers included to investors. The SECвЂ™s grievance charges influence and Clark with fraudulently attempting to sell unregistered securities.
In line with the SECвЂ™s grievance, Clark regularly changed investor account statements provided to him by ImpactвЂ™s accounting division to generate artificially high yearly prices of return. The changed account statements with purported earnings were then delivered to investors. Account statements to clients revealed annualized returns varying from 30 % to payday loans in Tennessee a lot more than 200 per cent.
Besides the asset freeze authorized late Friday, the court has appointed a receiver to protect and marshal assets for the advantage of investors. The SECвЂ™s grievance seeks an initial and injunction that is permanent well as disgorgement, prejudgment interest and economic charges from influence and Clark.
This matter had been examined by Jennifer Moore, Justin Sutherland and Marie Elliott for the SECвЂ™s Salt Lake Regional Office, therefore the litigation will be led by Tom Melton. The SEC appreciates the assistance of the Utah Division of Securities in this matter.