A Utah man whose assets — including a taxidermy of a full-body African lion — was put on the action block amid Ponzi allegations earlier this year was selling unregistered securities and running a $145 million offering fraud, the SEC said today.
Charged in the case was Travis L. Wright. The SEC said the scheme raised “nearly $145 million from approximately 175 investors” by providing investors promissory notes issued by Waterford Loan Fund LLC.
The notes purportedly were secured by a lien on a trust that held all the assets of the fund, but Wright made “numerous” misrepresentations to investors, the SEC charged.
Waterford was placed in bankruptcy last year, and Ponzi allegations emerged. The asset sale was billed in April as stemming from the proceeds of “one of the largest alleged Ponzi fraud cases in Utah.â€
Among the taxidermy items put up for bid were a “full body African lion,†Cape Horn buffalo, African antelope and hyena, wildebeest and other exotic animals. Forty-three firearms also were put up for auction, along with “beautiful, top-quality office furniture,†paintings, Persian and Oriental rugs, “fine home furnishings, antiques and more.â€
In June, the FBI said that recent Ponzi schemes and cases of investment fraud have cost Utah residents an estimated $1.4 billion. Some of the schemes were targeted at Mormons, the agency said.
About 370 investigative “subjects†— defined as “potential perpetrators†in current cases — have been identified, and the agency and its law-enforcement partners have embarked on a public awareness and education campaign aimed at keeping Utahns safe from scammers.
About 4,400 people have been affected by investment-fraud schemes in the state, the FBI said. The education campaign includes billboards and public-service messages.
Among the allegations by the SEC against Wright was that he directed money to a company that planned to sell a product through vending machines. The product was described as a “sandwich in a can.â€
The SEC asserted that Wright told investors “that their funds would be used only to make loans secured by commercial real estate, when in fact he used their funds primarily for loans and investments having nothing to do with real estate.”
Meanwhile, Wright told investors their promissory notes were secured by interests in a trust, “but no such trust existed” and “the notes were not secured,” the SEC said.
Although Wright told investors that Waterford would never lend more than 50 percent of the value of its real estate holdings, he did not disclose “that he never obtained an appraisal or valuation of real estate before lending investor funds against it” and that “he was using investor funds to pay for a lavish lifestyle for himself and his friends and family,” the SEC charged.