SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17355 / February 6, 2002
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).
SEC OBTAINS EMERGENCY RELIEF TO STOP FRAUDULENT INVESTMENT SCHEME
On February 6, 2002, the Securities and Exchange Commission filed an emergency enforcement action in the United States District Court for the District of Utah, Central Division and obtained a temporary restraining order prohibiting defendants Gary L. Moody, Steven R. Moody, Virtual Private Marketplace, Ltd., and Billpay Systems LLC from engaging in the fraudulent offer and sale of securities.
The Commission's complaint alleges 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 have 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. Instead, investors' funds have been placed in bank accounts controlled by the Moodys and investors are currently being paid their alleged returns with checks that have bounced, while others have received just a fraction of their original investment.
In addition to temporary restraining orders prohibiting further violations of the antifraud provisions of the federal securities laws, the Court ordered an asset freeze, expedited discovery, an accounting, and other interim relief. The Commission also seeks the following permanent relief: (i) permanent injunctions against future violations of Sections 5(a), (c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and; (ii) disgorgement and prejudgment interest; and (iii) the imposition of civil money penalties.
In February 1999, the Commission obtained a default judgment against Gary Moody arising out of a prime bank fraud and he was permanently enjoined from violating the antifraud provisions of the federal securities laws. SEC v. DeSimone, DeCabia and Moody, Civil Action No. 97-CIV-9359 (S.D.N.Y.)(LBS). In connection with the same fraud, Gary Moody pled guilty in 1997 to a scheme to defraud in the first degree in New York State and was sentenced to six months in jail and five years probation.
The Commission wishes to thank the Utah Department of Commerce, Division of Securities, for its assistance in this matter.