Instead, "Morris used investor money to support his extravagant lifestyle, to make Ponzi payments to some investors and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors," the SEC said in its order released Thursday.
In June, U.S. District Judge Bruce Jenkins ordered Morris to repay the $65 million plus $17.7 million in interest. Morris also was fined $150,000.
He was ordered to pay the monies to the SEC within 14 days. But Ken Israel, regional director of the SEC's Salt Lake City office, said Friday Morris has not paid and that the case has been referred to the agency's collections department.
Morris did not contest either SEC's administrative or court actions against him. He could not be reached for comment.
According to court documents, Morris was aided by James L. Haley, 49, Draper, owner of Cornerstone Capital Fund LLC; Luc D. Nguyen, 40, a Draper attorney; and Jay J. Linford, 49, Mesa, Ariz., the owner of Freedom Group LLC.
Haley and Linford solicited investors for Morris through their companies. Nguyen provided legal work to Morris and Haley and also raised money for Morris, the SEC said
Haley, Nguyen and Linford each agreed to a judgment against them in the SEC lawsuit without admitting or denying the allegations. Haley was ordered to repay $876,900 in profits and interest, Lindford $450,000 and Nguyen $483,000. But Jenkins waived payments and did not impose fines based on the three men's statements that they were unable to pay those amounts.
Morris used investor money to fund a "lavish lifestyle, including a luxurious home and several sports cars, and to make illusory interest payments to early investors in his scheme," the SEC complaint says.
When the scheme began to unravel around April 2008, Morris gave investors various excuses for missed payments, including that Homeland Security had frozen the accounts, that the Bernie Madoff case had caused banks to hold funds and because of typographical errors in wire request forms. He even created phony bank documents showing he had more than $200 million deposited in a bank account, the SEC said.