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Logan businessman John Scott Clark pleaded guilty and was sentenced to federal prison Thursday for defrauding investors of $1.84 million, his second guilty plea in a criminal case in a little over three years.
U.S. District Judge Robert Shelby said he agreed to only a three-year prison term that was part of a plea deal because of Clark's age, 63, and the defendant's cooperation with investigators. Shelby said he would normally impose a much harsher sentence and spoke at some length about the dangers posed by white-collar criminals.
Shelby compared well-educated, white-collar criminals such as Clark to lawbreakers whose drug addictions led them to make poor decisions.
"They're opportunistic, and they prey on people," the judge said while reciting a list of the "devastating effects" such crimes can have on families for several generations.
Clark was on supervised release on his prior conviction in a New York gambling case when he started the fraud scheme that landed him in court on Thursday. He pleaded guilty to securities fraud for telling 46 investors that he could make them returns of 15 percent to 15,000 percent by investing in foreign oil contracts tied to the Iraqi dinar currency.
Instead, Clark spent all the money on personal expenses and did not make any of the promised investments.
Shelby ordered Clark to repay the $1.84 million and said he must be supervised for three years after he leaves prison.
Clark broke up as he addressed the judge before formal sentencing.
"I have absolutely no excuse," Clark said. "As a result of my terrible decisions, I created victims."
Clark told investors that he and a business parter "were members of a top secret U.S. military and government program and held special security clearances which enabled them to invest in the purchase and sale of Iraqi dinar and oil contracts," according to a lawsuit filed Thursday by the Securities and Exchange Commission. He also boasted of ties to the president of Kuwait, the president of the International Monetary Fund, President Barack Obama and three former U.S. presidents.
Responding to a question from Shelby, Assistant U.S. Attorney Jacob Strain indicated that an investigation was ongoing against others who were involved in the scheme.
In December 2012, Clark was sentenced in federal court in New York on his guilty plea to charges of conspiracy to commit bank fraud, money laundering and obstruction of justice. He was sentenced to time already spent in jail and five years of supervision.
Clark was sued in Salt Lake City in March 2011 by the SEC, which said he operated a $47 million Ponzi scheme through his Impact Cash and Impact Payment Systems payday loan operations.
He was ordered not to violate federal securities laws and was required to disgorge $5.6 million plus interest.
Clark told his investors that the companies could generate revenue averaging at least 80 percent a year and that investors would be entered into a joint operating agreement to fund payday loans, the complaint said.
Gil Miller, the court-appointed receiver of the Impact Cash companies, said that victims so far have been paid for 100 percent of their claims.
Some of the investors in the Iraqi dinar case also were investors in his earlier Ponzi scheme, the SEC said. Clark also solicited members of his local church congregation, according to the complaint.