The U.S. Securities and Exchange Commission announced that a U.S. court has issued a final judgment against a Canadian man accused of participating in a Ponzi scheme.

The SEC says that on Aug. 23, the U.S. District Court in Cleveland entered a final judgment by default against Andrew Lech, a Canadian citizen, for perpetrating a Ponzi scheme that between 1999 and 2003 raised US$17 million from 150 investors, most of whom reside in the Cleveland area.

The commission reports that the final judgment permanently enjoined Lech from violating the registration and anti-fraud provisions of the federal securities laws and ordered him to pay disgorgement and prejudgment interest of $2,791,435.43, and pay a $120,000 civil penalty. It reports that Lech never appeared in the case and as a result, the final judgment was entered against him based on his default.

The SEC’s complaint alleged that Gary McNaughton, of Amherst, Ohio, raised $17 million from investors by selling them notes that guaranteed extraordinary returns of up to 20% per year. It also alleges that McNaughton told investors that their guaranteed monthly return would be generated by Lech who would invest their funds in stock options. However, it claims that Lech did not invest investor funds. “In reality, McNaughton and Lech operated a Ponzi scheme by using new investor funds to pay previous investors their guaranteed monthly returns,” it says. “Lech also used investor funds he received from McNaughton to pay numerous personal expenses.”