Tuesday, April 28, 2009
Utah Man Charged With Operating Real Estate Ponzi Scheme
Jeffrey Lane Mowen, 47, Lindon, Utah, is charged in federal indictment, returned by a grand jury in February 2009, recently unsealed, with three counts of wire fraud for allegedly receiving more than $18 million for investment in one of two prorams touted to investors - a real estate leveraging program or a foriegn currency trading program. Law enforcement authorities believe Mowen is currently living outside of the United States. An arrest warrant was issued when the indictment was returned, however Mowen had not been located. The potential maximum penalty for each count of wire fraud is 20 years and a fine of $250,000.
Contrary to Mowen's representations to investors that he was investing their money in a foreign currency trading or real estate leveraging program, the indictment alleges he used the funds to purchase more than 200 high-end antique, classic, and modern vehicles, including cars, trucks, trailers, motorcycles, threewheelers, and other vehicles. Mowen used these vehicles as symbols of his success to investors, according to the indictment. The indictment also alleges Mowen used investor funds to, among other purposes, pay for personal expenses, including payments to himself and his wife, dining expenses, vehicle storage fees, travel, utilities, and credit card expenses.
The indictment alleges individuals invested millions of dollars in Mowen's investment programs. One investor, T.F., invested more than $18 million of pooled investor funds with Mowen for use in his real estate leveraging program from November 2006 to around June 2007. T.F. also invested approximately $100,000 during October 2006 with Mowen for use in his foreign currency trading program after Mowen promised him a return of 33 percent per month, the indictment charges. Another investor, J.B., invested approximately $550,000 with Mowen from around May 2007 to October 2007 for use in Mowen's foreign currency trading program.
The indictment alleges that Mowen paid investment returns to investors using old and new investor funds (commonly known as "Ponzi payments") giving investors the false and misleading impression that such payments and returns were from the investment programs. When the payments to T.F. stopped in November 2007, the indictment alleges Mowen lulled investors through a string of false excuses which continued well into 2008. Ponzi payments to J.B. stopped in May 2008. Other than the Ponzi payments in 2007 and 2008, and vehicles given to some investors, investors lost their entire investment.
Defendants charged in indictments are presumed innocent unless or until proven guilty in court. The case is being investigated by the FBI. The SEC Denver Regional Office also has provided assistance and cooperation.
Law enforcement authorities are still determining how many victims of Mowen's alleged Ponzi scheme there may be. Individuals who believe they may be a victim of the conduct charged in the indictment can contact the FBI in Salt Lake City.
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