SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17416 / March 15, 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 PRELIMINARY INJUNCTION TO STOP FRAUDULENT INVESTMENT SCHEME
The Securities and Exchange Commission announced today that on March 6, 2002, the United States District Court for the District of Utah entered a preliminary injunction 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 injunction also freezes the defendants' assets. The Moodys opposed the issuance of a preliminary injunction. They requested a three-week extension of the temporary restraining order and then a hearing on the SEC's Motion for Preliminary Injunction. The court denied their request.
The Court previously had entered a temporary restraining order and an asset freeze against the defendants on February 6, 2002. 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 raised over $500,000 by falsely claiming that the Moodys were experienced businessmen, were worth over a billion dollars, and that Gary Moody had received, or 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 were paid their alleged returns with checks that bounced, and others received just a fraction of their original investment.
The preliminary injunction enjoins Gary Moody and his co-defendants, during the pendency of this action, from violating the antifraud provisions of the federal securities laws, 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. For additional information, see 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.