SALT LAKE CITY (CN) - The Utah man who runs American Pension Services stole $22 million from his clients' IRAs and used the money "to benefit himself and his friends," the SEC claims in court.
The SEC sued American Pension Services Inc. and Curtis L. DeYoung, its founder, president and CEO, in Federal Court.
DeYoung lives in and runs his company out of Riverton, Utah, south of Salt Lake City and adjacent to South Jordan, which for reasons uncertain appears to be a center of frauds based in Utah.
"This matter involves a long-standing fraudulent scheme resulting in the misappropriation of over $22 million of investor funds," the SEC says in its 22-page complaint. "From at least 2005 through the present, DeYoung engaged in a scheme pursuant to which he solicited investors to open self-directed Individual Retirement Accounts ('IRA') with APS and then used those investor funds to benefit himself and his friends.
The lawsuit adds: "Once customers transfer their retirement assets to APS, DeYoung misappropriates customer assets, particularly cash, for his own purposes.
"It appears that DeYoung's primary use of the misappropriated cash is making investments, including unsecured promissory notes, for his own ventures or those of his friends. DeYoung has squandered millions of dollars of customer funds on high-risk investments, resulting in huge losses to investors."
After losing their money, the SEC says, DeYoung "fails to inform customers, and their account statements continue to reflect inflated cash balances, or hold worthless assets. This allows DeYoung to continue to collect fees on worthless securities and cash, further victimizing APS's customers."
At the end of 2012, APS had 5,383 customers with $354 million in accounts, the SEC says in the 17-page lawsuit. Of that, $25 million was money contributed in 2012.
At the end of 2013, DeYoung's company had 5,488 customers and their accounts were valued at $352 million, the SEC says.
The Master Trust accounts, which DeYoung manages, was $22 million short at the end of 2013, the SEC says. DeYoung refused to answer the SEC's questions about what happened to the $22 million, according to the complaint.
The SEC seeks disgorgement, penalties and preservation of documents.