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FOR IMMEDIATE LAUNCH 2011-73

Washington, D.C., March 28, 2011 – The Securities and Exchange Commission today announced so it has acquired a court order 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 returns 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 split bank reports and utilized to invest in pay day loans and other areas of the businesses’ operations. Nevertheless, Clark alternatively commingled investor funds into an individual pool and utilized them which will make unauthorized investments, pay fictitious earnings to previous investors, and fund his or her own luxurious life style.

Extra Materials

• SEC Problem
• Litigation Release No. 21903

“Investors had been guaranteed returns that are extraordinary Clark ended up being really diverting their cash to help make such extraordinary personal acquisitions as a totally restored classic 1963 Corvette Stingray,” said Ken Israel, Director associated with the SEC’s Salt Lake Regional workplace. “Clark recruited brand brand new investors through recommendations from earlier in the day investors whom thought the Ponzi re 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.”

The SEC alleges that along with buying numerous costly vehicles and snowmobiles, Clark stole investor funds to get a house movie theater, bronze statues as well as other art for himself.

In accordance with the SEC’s complaint 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 industry events in several states, attending loan that is payday, and spending salespeople to find prospective investors to satisfy 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 have a peek at these guys SEC alleges that from at the very least March 2006 to September 2010, Clark while 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 Impact’s working costs. Effect failed to circulate a placement that is private or other document disclosing the type of this investment or even the dangers involved to investors. The SEC’s grievance charges influence and Clark with fraudulently attempting to sell securities that are unregistered.

In line with the SEC’s grievance, Clark regularly changed investor account statements supplied to him by Impact’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 significantly more than 200 %.

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 issue seeks an initial and injunction that is permanent 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 regarding the SEC’s Salt Lake Regional Office, plus the litigation will be led by Tom Melton. The SEC appreciates the assistance of the Utah Division of Securities in this matter.