The US District Court for the District of Utah has entered a final judgment against Jeffrey L Mowen, ordering him to disgorge USD8,041,779 in ill-gotten gains and USD1,964,203.67 in prejudgment interest.

The Court also ordered Mowen to pay a civil penalty of USD8,041,779, for a total of USD18,047,761.67.

The Court further enjoined Mowen from future violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933.

The SEC Complaint alleged that Mowen operated a Ponzi scheme that was fed through investor funds raised by another defendant, Thomas Fry. Fry, in turn, raised funds through other defendants, Fry’s promoters, via the unregistered offer and sale of high-yield promissory notes. According to the complaint, the scheme raised over USD40m from over 150 investors in several states, over USD18m of which was funnelled to Mowen. Mowen never invested the funds, instead misappropriating over USD8m to support a lavish lifestyle.

On 4 May 2011, Mowen pled guilty to committing wire fraud in a related criminal action and is currently serving a ten year prison sentence.

A final judgment ordering disgorgement and penalties against Fry and several of his promoters was entered on 15 June 2012.