Tuesday, March 29, 2011

Ponzi: "‘Shiny’ scam artist fleeces big-city fund managers"

From MarketWatch:
Who are the three gullible hedge fund managers in New York and San Francisco who just dropped $15 million in an alleged Ponzi scheme out in Utah? 
The Securities and Exchange Commission won’t say, but it’s going to be embarrassing if John “Scott” Clark, the man behind the alleged swindle, ever goes to trial. We’ll find out then.

Expect some seriously red faces among the hedge funds involved. How naive are these people?

The alleged Ponzi scheme was a doozy. The SEC says that from 2006 through last year, Clark raised $47 million from investors for his firm, Impact Cash, an online payday lender making loans to the poor at Chili Palmer rates.

He promised his backers annual returns of up to 80% a year.

You heard me. Eighty percent a year.

One hundred and twenty investors took the bait.

The SEC’s Thomas Melton said Monday all that’s left of the haul is about $4 million in cash, plus Clark’s collection of fancy cars, “bad art,” expensive furniture, a snowmobile, and a $25,000 home theater system.

The cars include three Mercedes Benz, each worth more than $100,000, and a restored 1963 Corvette.

Red, naturally....MORE