SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18087 / April 14, 2003
SECURITIES AND EXCHANGE COMMISSION v. GARY L. MOODY, STEVEN R. MOODY, VIRTUAL PRIVATE MARKETPLACE, LTD., AND BILLPAY SYSTEMS LLC, Civil Action No. 2:02CV-0110B (D. Utah)(filed February 6, 2002).
STATE OF UTAH v. GARY L. MOODY, Criminal Action No. 021908492 (Salt Lake Third District Court)(filed June 20, 2002)
STATE OF UTAH v. STEVEN R. MOODY, Criminal Action No. 021908493 (Salt Lake Third District Court)(filed June 20, 2002)
MOODY BROTHERS PLEAD GUILTY TO UTAH STATE
CRIMINAL FRAUD CHARGES
DEFENDANTS ARE EACH ORDERED TO PAY $1 MILLION
PENALTY IN SEPARATE SEC ACTION
The Securities and Exchange Commission announced today that on April 3, 2003, Gary L. Moody and Steven R. Moody each pled guilty in Salt Lake Third District Court in Utah to two counts of securities fraud, a second degree felony in the State of Utah, and one count of a pattern of unlawful activity, also a second degree felony. The Court is scheduled to impose a sentence on May 16, 2003.
In a separate proceeding arising out of the same conduct, and alleged in a Complaint filed by the Commission on February 6, 2002 in the United States District Court for the District of Utah, the Court on January 23, 2003, ordered the Moody brothers to each pay a civil money penalty of $1 million.
The Commission's Complaint alleged that beginning in 2001, Gary Moody and his brother Steven Moody lured investors to send their money to Virtual Private Marketplace, Ltd. and Billpay Systems LLC by promising them astronomical investment returns in a short time to be paid out in coupons that could be used at various retail stores. Defendants raised over $500,000 by falsely claiming that the Moodys were experienced businessmen, had raised a billion dollars, and that Gary Moody was soon to receive four doctorate degrees from Harvard University. In fact, Gary Moody is a convicted felon and Steven Moody filed for personal bankruptcy in 2000. In addition, there is no evidence that the investors' funds have been placed in income generating investments.
On October 24, 2002, the Court granted the Commission's motion for summary judgment, finding that defendants had violated Sections 5(a), (c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Court ordered that all defendants be permanently enjoined from violating these statutory provisions and pay disgorgement of $713,328.44, plus pre-judgment interest of $17,958.31. For additional information, see L.R. 17416 (March 15, 2002) and L.R. 17355 (February 6, 2002).
The Commission wishes to thank the Utah Department of Commerce, Division of Securities, for its assistance in this matter.