Convicted Ponzi Scheme Operator Fined $18m
A district court in Utah entered a final judgment against Ponzi scheme operator Jeffrey L. Mowen, ordering him to pay $8,041,779 in ill-gotten gains and $1,964,203.67 in prejudgment interest.
The court also ordered Mowen to pay a civil penalty of $8,041,779, for a total of $18,047,761.67.
The complaint alleged that Mowen operated a Ponzi scheme that was fed through investor funds raised by another defendant, Thomas Fry. Fry, in turn, 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 over $40 million from over 150 investors in several states, over $18 million of which was funneled to Mowen. Mowen never invested the funds, instead misappropriating over $8 million to support a lavish lifestyle.
On May 4, 2011, Mowen pled guilty to committing wire fraud in a related criminal action and is currently serving a ten year prison sentence. United States of America v. Mowen, Case No. 2:09-cr-00098-DB (D. Utah).
A final judgment ordering disgorgement and penalties against Fry and several of his promoters was entered on June 15, 2012.