SALT LAKE CITY -- The Securities and Exchange Commission has filed suit in federal district court over three alleged Ponzi schemes with Utah connections, at least one of which targeted members of The Church of Jesus Christ of Latter-day Saints.
The SEC obtained an emergency court order freezing assets and halting the scheme that was ongoing.
Named as defendants are Joseph A. Nelson, formerly of Layton, now of El Dorado Hills, Calif.; Anthony C. Zufelt, of Roosevelt; David M. Decker Jr., of Provo; Cache D. Decker, of Leesburg, Va.; Zufelt Inc., which was headquartered in Syracuse; Silver Leaf Investments, currently in Henderson, Nev., but formerly in Syracuse; and JCN Inc., JCN Capital LLC, and JCN International LLC, all based in Clearfield.
The SEC said that, in the first scheme, Nelson, Zufelt and the Deckers raised at least $2.9 million from 36 people. They encouraged investors to borrow against their homes and promised returns of up to 220 percent, according to the SEC filing.
In the second scheme, Nelson, Zufelt and the Deckers "fraudulently sold investments in Silver Leaf Investments Inc.," the SEC states, and raised at least $770,000 from 11 people from July 2006 through December 2006.
The SEC complaint states that, in a third scheme, which was ongoing, Nelson persuaded more than 100 people to invest at least $12 million with JCN, JCN Capital and JCN International, collectively known as the Nelson Companies.
Nelson promised investors returns of up to 200 percent in a short period of time.
The SEC states that Nelson used his position of authority in the LDS Church to "lull prospective investors. ... Nelson actively targets fellow LDS members, reaching out to them through church connections and during church functions, and many if not most of his investors are LDS members."
David Decker and Cache Decker acted as promoters and helped Zufelt and Nelson solicit investors for the schemes, the SEC said in a news release.
In some cases, investors did get money back, but the SEC says Zufelt and Nelson used investors' money to pay personal expenses, fund the payments to investors and pay employees and associates.
The SEC complaint says the main defendants made false and misleading claims about the investments and violated various sections of the Exchange Act and the Securities Act.
Each of the relief defendants, all listed as an acquaintance or family member of Nelson and Zufelt, is alleged to have received from the main defendants payments traceable to unlawful activities and to which they are not entitled. Amounts range from $46,000 to $200,000.
A court hearing on the SEC's filing is scheduled for July 6.