Father, son sign settlements in alleged $220 million Ponzi scheme
SALT LAKE CITY — A father and son accused of running a $220 million Ponzi scheme have apparently reached an agreement with the U.S. Securities and Exchange Commission.
Wendell Jacobson and Allen Jacobson, of Fountain Green, signed settlement offers this month, according to a motion the SEC filed in U.S. District Court. As part of the motion, the parties agreed to put off any pre-trial matter in the case until December to give the SEC time to review and approve the settlement.
Terms of the agreement were not outlined in court documents.
Federal investigators allege that the Jacobsons used their connection as members of LDS Church to solicit 225 investors through a complex web of entities under the umbrella of Management Solutions, Inc.
According to the SEC, the father and son “used alleged ‘sales’ as a means of shifting investors into and out of certain properties.” It says most investments were funneled into a “clearing house” corporation known as Thunder Bay Mortgage Company.
In some instances, the SEC contends, the Jacobsons bought properties they had supposedly sold for a profit with another shell corporation. They also allegedly moved their money into joint accounts to make it appear to investors they were committing their own capital to a project, only to quickly transfer the money back to their own account.
The SEC complaint alleges investors in four of the Jacobsons' corporations received a “6 to 8 percent” return on their investments, though the combined income from the corporations was $32,200. Those corporations' expenses over the period they supposedly profited were $1.3 million.
U.S. District Judge Bruce Jenkins froze the Jacobsons' assets and appointed a receiver to manage them.