Convicted Ponzi scheme operator ordered to pay $18M
SALT LAKE CITY (Legal Newsline) - The Securities and Exchange Commission announced Monday that a Utah federal court has ordered Jeffrey Mowen to pay a total of $18,047,761.67 in penalties and disgorgement.
The actual tally was $8,041,779 in disgorgement and $1,964,203.67 in prejudgment interest. He also was ordered to pay a civil penalty of $8,041,779. The Court further enjoined Mowen from future violations of the Securities Exchange Act.
The SEC Complaint alleged that Mowen operated a Ponzi scheme that was fed through investor funds raised by another defendant, Thomas Fry. Fry, in turn, allegedly raised funds through other defendants, Fry's promoters, via the unregistered offer and sale of high-yield promissory notes.
According to the complaint, the scheme raised more than $40 million from more than 150 investors in several states, more than $18 million of which was funneled to Mowen. Mowen never invested the funds, instead misappropriating more than $8 million to support a lavish lifestyle, the SEC claims.
On May 4, 2011, Mowen pled guilty to committing wire fraud in a related criminal action and is currently serving a 10-year prison sentence. A final judgment ordering disgorgement and penalties against Fry and several of his promoters was entered on June 15.