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A Hyde Park man has been accused in federal court of orchestrating a Ponzi scheme under the guise of an online payday loan company.

The Securities and Exchange Commission on Friday filed a complaint in U.S. District Court against John Scott Clark, 58, and his businesses, Logan-based Impact Cash and Impact Payment Systems. The SEC alleges that between March 2006 and September 2010, more than $47 million was raised from 120 investors who were promised lavish returns for funding payday loans.

According to the complaint, Clark sold securities through both companies that totaled $47 million. About $4 million of that allegedly was raised for equity investments in the companies, while the rest came from investors who agreed to provide capital to the companies for payday loans.

But Clark, who could not be reached for comment Friday, diverted funds for personal use and outside business ventures, the SEC alleges. He also used the money from new investors to pay off profits to initial investors, the complaint states.

Clark allegedly told his investors that the companies could generate revenue averaging at least 80 percent each year and that investors would be entered into a joint operating agreement with the companies to fund the payday loans, the complaint states.

Clark told investors their money would be used to purchase lists of borrowers who had a history of repaying payday loans and to fund the actual payday loans, according to the complaint. He allegedly promised the proceeds from the loans would be returned to investors.

Clark built the scam through recruiting investors at trade shows, attending payday loan conferences and employing salespeople to recruit potential investors, the complaint states. One salesperson earned $500,000 to $600,000 over five years to recruit potential investors to attend loan conferences and trade shows that Clark would attend.

Investors began to complain about Clark in the fall of 2009, when they couldn't obtain account statements, according to the complaint. They also asked Clark to liquidate and return their investments —pleas that Clark ignored, the complaint states.

Clark made personal purchases of three Mercedes Benz vehicles, a 1963 restored Corvette, a $25,000 home theater system, expensive furniture, bronze statuary and snowmobiles, the complaint states. He also allegedly gave family and friends large cash gifts.

Under pressure from investors, Clark admitted to a family member who had invested in the companies that he had misappropriated funds, overpaid some investors and compromised Impact Cash and Impact Payment Systems, according to the complaint.

Investors started reviewing the companies' books and records, finding that Clark's accounting staff recorded all payday loan payments as income rather than allocating the payments to principal, interest and fees. Those instructions resulted in overstated revenue in statements shown to investors, the complaint states.

The SEC is accusing Clark of employment of a scheme to defraud, fraud in the offer and sale of securities, fraud in connection with the purchase and sale of securities, offer and sale of unregistered securities, and sale of securities by an unregistered broker.

Event will teach financial sense

A conference Saturday is aimed at helping Utahns to be smarter with their money and avoid financial scams. "Utah Money Watchers Conference: How to be a Savvy Consumer," will be presented from 8 a.m. to 4 p.m. Saturday at the Marriott Downtown, 75 S. West Temple in Salt Lake City. The conference is sponsored by KUED 7, the United Way, AARP-Utah, KUER, the Utah Division of Securities, the Utah Council on Financial and Economic Education and the FINRA Investor Education Foundation. Session topics include how to reduce debt, save for the future and avoid fraud. Gov. Gary Herbert will speak at a noon luncheon about the state's financial literacy initiatives. Registration is $15 and price includes lunch. Tickets can be reserved online at