Two online pay day loans businesses owned by the exact same person have been hit with a fraud suit. The suit was brought in federal court by the Securities and Exchange Commission. John Scott Clark, of Utah, is being sued by the Securities and Exchange Commission for allegedly running a Ponzi scheme with two online financial services businesses. Clark is alleged to have stolen $47 million from more than 120 investors.
Online lending businesses deal with Securities and Exchange Commission fraud suit
The Securities and Exchange Commission sued the owner of two lending online payday cash advance companies for a Ponzi scheme costing millions of dollars. Impact Cash LLC and Impact Payment Systems LLC are both businesses John Scott Clark owned and were preparing on investing capital into with money given to him by over 120 investors over a five year period. This got the Securities and Exchange Commission angry and started a lawsuit. Clark allegedly recruited investors by promising an average return of 80 percent in exchange for capital, which he allegedly said would be used to fund payday loans to reliable consumers. From March 2006 to September 2010, Clark recruited investors and got over $47 million, reports the Credit Union Times, in investment.
Using investor money to get Clark a Mercedes
Clark lived the lifestyle he wanted off the money he stole from investors. Deseret News states that Clark simply needed to gain the trust of investors. Clark supposedly purchased three Mercedes-Benz cars, a 1963 Chevrolet Corvette, installed a home theater system in his home that cost $25,000 and also purchased lavish home furnishings. Clark refused to give investors their money when they started to get suspicious in 2009 that something was wrong. Clark got a lawsuit with five Securities Act violations by the SEC. A Federal judge has placed both Impact businesses into receivership and frozen the very same day loans lending companies, according to the Wall Street Journal.
A tiny mistake from one person
A lot of people have a bad connotation of online payday loan lenders. They are considered evil. This cannot possibly be true. Nobody reports honest transactions though. The individuals you give money to have to be trusted. Be careful over it. This is where the Better Business Bureau comes in. It is there to help consumers. Generally, it’s too good to be true if it sounds that way.
Citations
Salt Lake Tribune
sltrib.com/sltrib/money/51503972-79/investors-clark-complaint-payday.html.csp
Wall Street Journal
online.wsj.com/article/BT-CO-20110328-710072.html
Deseret News
deseretnews.com/article/705369480/Cache-County-man-allegedly-bilked-investors-of-millions-to-feed-lavish-lifestyle.html
Credit Union Times
cutimes.com/2011/03/28/sec-halts-47-million-payday-loan-ponzi
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