A Utah man has been accused by the Securities and Exchange Commission (SEC) of running aPonzi scheme involving approximately $47 million. The SEC recently filed a court order to freeze his assets as well as the assets of two of his loan companies.
John Scott Clark, 58, of Hyde Park, Utah, is accused of duping 120 unsuspecting investors out of over $47 million. Mr. Clark allegedly operated the Ponzi scheme between March 2006 and September 2010 under his two companies, Impact Cash, LLC and Impact Payment Systems, LLC.
According to the SEC, Mr. Clark promised his investors of returns up to 80 percent annually. The investors were under the impression that their funds would be held in separate bank accounts and used to fund payday loans.
However, Mr. Clark apparently used the money to fund his lavish lifestyle which included the purchase of several expensive cars, snowmobiles, and a home theatre. He is also accused of placing the money into a single account, making unauthorized investments, and paying fictitious dividends to earlier investors.
"Clark recruited new investors through referrals from earlier investors who thought the Ponzi payments they received were actual returns on their investments and sought to share the lucrative opportunity with family and business associates," according to Ken Israel, director of the SEC's Salt Lake City office.
A motion is scheduled for Friday, April 1, 2011.