Draper, Utah Ponzi Schemer Who Used Real Estate Loan Fund Waterford Funding
Ordered to Repay $43.2 Million to Elderly Investors
Travis Wright, of Draper, Utah, received a 10-year federal prison sentence
last Friday for defrauding more than 175 investors out of approximately
$350 million. Wright admitted to the
Ponzi scheme in May 2011. As part of Wright’s sentence, U.S. District Judge Clark
Waddoups ordered the former Utah scoutmaster to repay $43.2 million in
According to court documents, Wright acted as the sole manager of Waterford
Funding, a real estate loan fund, from September 1999 to March 2009.
Wright told investors the fund would render returns of 8 to 44 percent
in as little as nine months. Investors, most of whom were elderly, forked
over more than $100 million in the nine-and-a-half year period.
In a July 2010 Complaint, the SEC accused Wright of making various misrepresentations
to investors in Waterford Funding, including statements that investor
funds would be used exclusively to make loans secured by commercial real
estate. The SEC also accused Wright of telling investors their promissory
notes were secured by a trust.
An SEC investigation, however, revealed that the trust never existed, and
that Wright was using investors’ funds to make loans and investments
that had nothing to do with real estate, as well as for his personal purposes.
(For more information about the
SEC’s investment fraud case against Travis Wright, click here.)
U.S. District Court documents showed that Wright stole more than $15 million
of investor money for his personal use. Along with lavish vacations, luxury
items, and a $5 million home, Wright gave his wife $1.3 million in spending
money. The investment scheme unraveled in 2008, when Wright stopped making
"interest" payments to investors.
Wright’s Ponzi scheme was one of the largest Ponzi schemes perpetrated
in Utah history. Wright officially pled guilty to one count of felony
mail fraud. His charges with the SEC were settled in June 2011.