The widow of a former investment adviser accused of running a Ponzi-like investment fraud for more than a decade before he died in 2022 will pay US$3.8 million to investors harmed in the scheme following a final settled judgment obtained by the Securities and Exchange Commission (SEC).
According to the SEC complaint, Stephen Romney Swensen raised US$29 million from more than 50 investors in a fraudulent investment scheme from 2011 until his death in June 2022.
Swensen made false statements to investors to induce them to invest in Crew Capital Group, LLC, which he controlled and operated, promising they would earn at least 5% in annual returns from various investments, the SEC alleged.
Instead of investing funds, Swensen made periodic payments of “fictitious earnings” to some investors, and used the bulk of the money for personal expenses, including real estate, vehicles, “the living expenses of his family and his mistresses, and luxuries such as private airplanes,” the SEC said in its complaint. He also diverted investor funds from Crew Capital to other businesses he owned, it said.
Even after Swensen’s death, the SEC alleged Crew Capital continued to violate federal securities laws by disseminating false and misleading statements to investors through its website, the regulator said in its claim.
The website displayed “fictitious information to investors about the investors’ purported ‘accounts’ with Crew Capital,” the SEC said. “In fact, no such accounts exist, and the remaining investor money sent to Crew Capital is now being spent and otherwise dissipated by defendants and relief defendants.”
Charges were filed against Crew Capital and Swensen’s estate in October 2022.
In the final settled judgment issued on July 31, Swensen’s widow consented to an order to pay US$3.8 million consisting of US$3.6 million in disgorged investor funds, plus interest. She was not accused of wrongdoing. The entire amount will be distributed to harmed investors by a court-appointed receiver.