Mark Fox is paying taxes on imaginary interest gained from money that doesn’t exist.
“I’m in the middle of fighting right now with IRS,” said Fox, a victim of an alleged Ponzi scheme and investment fraud run by the late advisor Stephen Romney Swensen.
Fox, 61, of Cocoa Beach, Fla., and his wife invested $850,000 with Swensen. The advisor, whose estate is being investigated by the Securities and Exchange Commission, is thought to have allegedly conned up to 50 families out of $30 million with his fraudulent Crew Capital Group.
Represented by the New Orleans-based law firm Peiffer Wolf Carr Kane Conway & Wise, Fox is filing a claim against Wealth Navigation Advisors, doing business as Oak Lane Advisors, based in Centerville, Utah. Swensen was a registered investment advisor for WNA at the time of the alleged fraud. WNA did not respond to email and phone messages seeking comment.
Fox joined a Zoom call Tuesday afternoon with attorneys Jason Kane and Albert Copeland.
“Just talking about it, I’m filled with disgust,” Fox said. “To say [the fraud] was a shock and we’re furious would be a gross understatement. My family and I have been pushed to the brink and now at age 61 I’m trying to figure out who I can trust. I hope that by sharing our story might help prevent others from finding themselves in the same boat.”
Fox met Swensen 25 years ago at an aviation hangar at the Ogden City, Utah airport. Both pilots, the men struck up a friendship. Swensen eventually recruited Fox as a client, and Fox followed Swensen as he hopped around from firm to firm over the last 15 years, most recently at WNA from 2018 to 2022.
Fox did thorough due diligence, he insisted, questioning Swensen for three years before signing on with him.
“He always showed me this stuff. He always showed me his cash reserves,” Fox said. “We’re not talking about just Crew funds, but all of our stuff.”
Investigators would later learn that Swensen allegedly made fake documents and statements to make Crew Capital appear legitimate. Much like the Bernie Madoff scheme, it was all a mirage, the attorneys said.
Documents falsely showed that Pacific Investment Management Company, or PIMCO, was a sub advisor to Crew Capital, Copeland explained. PIMCO is one of the largest investment managers, actively managing more than $2 trillion in assets for banks, funds, foundations and other investors around the world.
“Swenson allegedly doctored actual PIMCO documentation for PIMCO’s senior floating rate fund by adding his Crew Capital logo and the word ‘Crew’ and the words ‘Crew Capital Group’ in various places,” Copeland said. “But, in fact, PIMCO never had a relationship with either Swenson or Crew Capital.”
Swensen, 50, would commit suicide on June 6, 2022, his obituary lauding him as a “brilliant financial advisor and entrepreneur.”
SEC charges advisor
The SEC’s investigation was well in motion at the time of Swensen’s death. On Oct. 18, 2022, the agency announced fraud charges.
Swensen falsely told investors that Crew Capital was a fund that was co-managed by a reputable firm and guaranteed investors a minimum 5% annual return and up to 10% if the S&P 500 performed well. According to the complaint, Crew Capital, which was owned and controlled by Swensen, did not invest in any securities.
Rather, the SEC alleges, Swensen misappropriated essentially all investor funds, to make Ponzi payments to other investors and to pay for Swensen’s personal expenses, such as real estate, vehicles and multiple private aircraft, and Swensen’s living expenses.
The SEC seeks a permanent injunction against Crew Capital, and disgorgement with prejudgment interest from Swensen’s estate and Crew Capital. That investigation is ongoing and could take years, Peiffer Wolf attorneys said.
The law firm filed a Statement of Claim with the American Arbitration Association against Wealth Navigation Advisors “for breach of fiduciary duty, failure to supervise, negligence, breach of contract, and more.”
On the day he died, Swensen was fired from WNA for allegedly “failing to disclose an outside business activity.”
“This went on for 11 years. To be able to run a Ponzi scheme of this magnitude for 11 years, while supposedly being supervised by brokerage firms, and WNA is just astonishing,” Kane said. “Someone clearly took their eye off of the supervision ball. They have an obligation to supervise and they clearly failed.”
InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
© Entire contents copyright 2023 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.
The post Florida man fighting to get back $850K invested with Madoff-style advisor appeared first on Insurance News | InsuranceNewsNet.