Scamsters allegedly used array of excuses to keep investors at bay in $11M fraud

The SEC announced today that it has obtained an emergency court order and asset freeze to shut down an alleged scheme that promised big returns to investors and then blamed administrative glitches and an assortment of other excuses to explain why the payments never materialized.
Husband and wife John and Marian Morgan of Sarasota, Fla.; Stephen E. Bowman of Omaha, Neb.; and Thomas D. Woodcock, Jr. of Rockwell, Texas, collectively raised more than $11 million during 2006 and 2007 for a fictitious investment program, the agency charged in a statement.
“Investors were given a vague assortment of excuses ranging from PATRIOT Act scrutiny to their lawyers’ vacation schedule as reasons why payments of promised returns were delayed,” according to a statement by the Securities and Exchange Commission.
The alleged scamsters also told investors that they would get their money after payments were made to humanitarian-project participants.
In fact, the defendants only repaid some investors their principal by using other investors’ funds.
The remaining luckless investors got nothing.
According to the SEC’s complaint, the defendants told investors that their principal was guaranteed. However “the defendants used investor funds for various … purposes, including Mr. Bowman’s gambling expenses, mortgage payments by the Morgans, and Ponzi payments to some investors.”
The complaint, filed in federal court in Tampa, Fla., also charged two companies operated by certain the defendants including MorganMorgan European Holdings Aps is based in Stenlose, Denmark and Sarasota, Fla. and Bowman Marketing Group, Inc. of Omaha, Neb.
The emergency court order granted the SEC’s request for an asset freeze, an accounting, expedited discovery and the repatriation of funds to the registry of the court.
David Zisser, an attorney with Isaacson Rosenbaum PC of Denver, who is representing Mr. Woodcock had no comment on the case.
Bowman Marketing Group was not immediately available for comment, nor were the Morgans.