This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Federal regulators have imposed sanctions on six Utah and Colorado men for their involvement with Jeffrey Mowen, the Utah County man who pleaded guilty to fraud charges for running a Ponzi scheme that took in about $18 million from investors on promises of returns of 2 percent or more a month.
The Securities and Exchange Commission said the six solicited millions of dollars of investor money that went to Mowen using false claims about where the money would go and about the security of the investments.
Sanctions were imposed against Thomas R. Fry, Cedar Hills; Michael W. Averett, Pleasant Grove; Michael G. Butcher, Loveland, Colo.; Gary W. Hansen Berthoud, Colo.; James B. Mooring, Highland; and Bevan J. Wilde, Highland.
In recent administrative actions, the SEC barred the six from participating in investment sales, services and promotions, including penny stocks.
Another Utah man named in the lawsuit, David G. Bartholomew, Pleasant Grove, continues to defend himself.
In a 2009 lawsuit, the SEC said the six had raised about $41 million from 150 investors in various states. Of that, about $18 million went to Mowen, who used about half of it to make interest payments to initial investors so it appeared his operation was profitable in what's known as a Ponzi scheme.
Mowen, who is serving a 10-year prison sentence, misappropriated another $8 million for personal use, including buying a large collection of luxury and antique motor vehicles, with another $650,000 going to his then-wife.
The lawsuit said Fry led the group of promoters in distributing false information about the investments. They also failed to do adequate research to ensure the information was legitimate, it said.
Fry ignored the fact that Mowen had been under investigation and eventually was convicted of securities fraud, the lawsuit said. When Fry learned that Mowen had been convicted, he failed to disclose that information to investors or other promoters.
Fry and the others settled the lawsuit against them and were ordered not to commit anymore violations. The SEC is seeking repayment of funds they earned in the process.
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