SEC Halts $47 Million Payday Loan Ponzi
The Securities and Exchange Commission has frozen the assets of two online payday loan companies and charged the owner with allegedly perpetrating a $47 million fraud and Ponzi scheme.
The SEC today alleged that John Scott Clark of Hyde Park, Utah, promised investors annual returns of 80% on their investments in his companies–Impact Cash LLC and Impact Payment Systems LLC. Investors were told their money would be kept in separate bank accounts and used to fund payday loans and other aspects of the companies’ operations. However, Clark instead commingled investor funds into a single pool and used them to make unauthorized investments, pay fictitious profits to earlier investors, and finance his lifestyle, the SEC said.