SALT LAKE CITY (CN) – The SEC on Monday got an emergency order freezing the assets of National Note of Utah, whose operator Wayne LaMar Palmer allegedly bilked hundreds of investors of $100 million.
Palmer and his business both operate out of West Jordan, Utah, the SEC said in its federal complaint.
“Since at least 2004, Palmer has raised more than $100 million from over 600 investors in National Note,” the SEC said in its 16-page complaint.
“Palmer represents to investors in National Note that it purchases and sells collateralized loans such as mortgages, trust deed notes, options, leases and purchase contracts; underwrites and funds collateralized commercial and residential loans; and purchases, manages, and sells real property. Palmer tells investors that his and National Note’s expertise in this area allows it to generate returns of 15 to 20 percent annually, and that for this reason it is able to guarantee its investors a 12 percent return.
“Palmer also represents to investors that the 12 percent return will be derived from the real estate projects in which National Note invests, and that National Note has ‘a perfect record’ in that it has never missed a payment of principal or interest to an investor.
“Palmer omits to disclose to investors, however, that National Note is conducting all its business with related entities; that National Note itself is insolvent and unable to make investor interest payments according to their terms; and that investor returns are being paid from the funds of new investors.
“Because investors are being repaid from new investor funds, Palmer’s operation is a classic Ponzi scheme.”
Palmer, 57, is the sole owner and manager of National Note, the SEC says. It seeks disgorgement, penalties and appointment of a receiver.