Washington, D.C., March 28, 2011 – 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.

Washington, D.C., March 28, 2011 – The Securities and Exchange Commission today announced that it has acquired a court purchase freezing the assets of two payday that is online companies and their owner faced with perpetrating a $47 million providing fraud 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 assets in their businesses – Impact money LLC and Impact Payment Systems LLC. Investors had been told their funds could be held in separate bank reports and used to finance pay day loans and other components of the businesses’ operations. Nonetheless, Clark rather commingled investor funds into just one pool and utilized them to produce unauthorized investments, pay fictitious earnings to previous investors, and fund their own luxurious life style.

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“Investors had been guaranteed returns that are extraordinary Clark had been really diverting their funds to produce such extraordinary personal acquisitions as a totally restored classic 1963 Corvette Stingray,” said Ken Israel, Director regarding the SEC’s Salt Lake Regional workplace. “Clark recruited brand new investors through recommendations from earlier in the day investors who thought the Ponzi re payments they received had been real comes back to their investments and sought to generally share the profitable possibility with family members and company associates.” The SEC alleges that as well as purchasing numerous high priced vehicles and snowmobiles, Clark took investor funds to acquire a house movie theater, bronze statues along with other art for himself.

In line with the SEC’s problem filed in U.S. District Court when it comes to 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 trade events in different states, attending pay day loan seminars, and having to pay salespeople to find possible investors to generally meet with Clark. He paid one salesperson a lot 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 least March 2006 to September 2010, Clark as well as the effect businesses raised funds from investors when it comes to reported purposes of funding payday advances online payday loans Michigan, buying listings of leads for cash advance clients, and having to pay Impact’s running costs. Effect failed to circulate a personal positioning memorandum or every other document disclosing the type for the investment or perhaps the dangers included to investors. The SEC’s grievance charges influence and Clark with fraudulently selling unregistered securities. In line with the SEC’s grievance, Clark regularly changed investor account statements offered to him by Impact’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 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 SEC’s grievance seeks an initial and permanent injunction since well as disgorgement, prejudgment interest and monetary charges from influence and Clark. This matter had been examined by Jennifer Moore, Justin Sutherland and Marie Elliott for the SEC’s Salt Lake Regional workplace, therefore the litigation will be led by Tom Melton. The SEC appreciates the assistance of the Utah Division of Securities in this matter.