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SEC: Deceased Advisors’ Ponzi Scheme Continues To Cheat Investors


The estate of a recently-deceased registered investment advisor continues to benefit from a Ponzi scheme the advisor allegedly ran on more than 50 investors that raised $29.3 million, according to newly-filed charges from the Securities and Exchange Commission.

The commission filed its complaint in Utah federal court against the estate of Stephen Romney Swensen, who died in June at the age of 50. During the time period in question, Swensen worked for a variety of firms, including J.W. Cole Financial, Allgeis Investment Services and Summit Brokerage Services, according to his BrokerCheck profile

The scheme purportedly began in 2011, when Swensen began soliciting clients to invest in Crew Capital, promising guaranteed 5% annual returns that could reach as high as 10%. But Swensen allegedly failed to reveal he owned and controlled Crew Capital, and went to great lengths to convince clients it was legitimate. 

Swensen allegedly paid a company to maintain Crew Capital’s legal status as a Nevada LLC, paying extra for their “privacy package” so his name wouldn’t show up on any official documents. He also used mail forwarding services to give the impression Crew Capital had offices throughout the country, according to the commission.

To keep up the alleged fraud, Swensen gave some clients false documents about Crew Capital, describing it as an “actively managed portfolio,” and that Pacific Investment Management Company (PIMCO) was a “subadvisor” to Crew Capital. But there was no relationship between the two entities; in some cases, Swensen purportedly doctored actual PIMCO documentation to add the Crew Capital logo, including an annual report on the fictitious “Crew Capital Group/PIMCO Funds.”

Throughout this time, Swensen controlled a Wells Fargo bank account in Crew Capital’s name, pooling investors’ funds into the account. He directed clients to write personal checks to Crew Capital, obtain cashier’s checks or wire money directly, and also had several clients open self-directed IRA accounts at the Bank of Utah. Then, he had those clients sign letters giving Swensen the authority to direct where those funds went (at which point Swensen would wire the funds to Crew Capital’s account, according to the SEC). 

After pooling the funds into the Wells Fargo account, he used the money as if it were his “personal account,” the SEC commission. In addition to making Ponzi-type payments to previous investors, he used the money to pay for his family’s living expenses, to buy and maintain several airplanes, to buy homes and vehicles and for expenses for two mistresses. And the results of the scheme didn’t end with Swensen’s death, according to the complaint.

“Although Swensen is now deceased, Crew Capital continues to violate the federal securities laws by disseminating false and misleading statements to investors,” the complaint read. “Swensen created a website for Crew Capital that is still operating and displaying fictitious information to investors about the investors’ purported ‘accounts’ with Crew Capital. 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.”

The SEC’s looking for a permanent injunction against Crew Capital, as well as disgorgement from the company and Swensen’s estate “so that funds can be returned to investors who were victims of the fraud,” according to the complaint.

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