U.S. Securities and Exchange Commission
Litigation Release No. 22216 / January 3, 2012
SEC v. Jeffrey L. Mowen, Thomas R. Fry, Bevan J. Wilde, Gary W. Hansen, Michael G. Butcher, James B. Mooring, David G. Bartholomew, and Michael W. Averett, Defendants, and Erin O’Malley, f/k/a Erin O. Mowen, Relief Defendant, Case No. 2:09-cv-00786-DB/PMW (D. Utah)
Summary Judgment Entered Against Convicted Ponzi Scheme Operator Jeffrey L. Mowen
The Securities and Exchange Commission announced today that on December 29, 2011, the United States District Court for the District of Utah granted its motion for summary judgment against Jeffrey L. Mowen. On May 4, 2011, Mowen pled guilty to committing wire fraud in a related criminal action, United States of America v. Mowen, Case No. 2:09-cr-00098-DB (D. Utah). In pleading guilty, Mowen acknowledged operating a Ponzi scheme from around October 2006 to around October 2008, wherein he received over $18 million from investors for use in a purported foreign currency trading program. The SEC Complaint alleges that the investor funds provided to Mowen were raised by Thomas Fry and the other defendants, Fry’s promoters, from the unregistered offer and sale of high-yield promissory notes to over 150 investors in several states. Mowen acknowledged in his guilty plea that, rather than using investor funds for their intended purpose, he used the money for his personal benefit, misappropriating over $8 million.
The SEC moved for summary judgment against Mowen based upon the facts he acknowledged in his guilty plea. The Court granted the SEC’s motion, which sought a finding that Mowen violated Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933, an injunction against future violations of those provisions, and disgorgement of $8,041,779 in ill-gotten gains, plus prejudgment interest of $1,964,203.