MINNEAPOLIS (CN) – The SEC on Monday obtained an emergency order to stop a Connecticut-based fund manager from diverting settlement money for victims of Thomas Petters’ Ponzi scam. The SEC claims Marlon Quan and his companies funneled $459 million into the scam, and took more than $90 million in fees.
“When Petters was unable to make payments on investments held by the funds that Quan managed, Quan and his firms concealed Petters’s defaults from investors by concocting sham round trip transactions with Petters,” the SEC said in announcing the emergency court order.
The SEC added: “In its emergency court action, the SEC alleges that Quan, despite a glaring conflict of interest, more recently negotiated an agreement to divert a settlement payment of approximately $14 million relating to a receivership and a bankruptcy of Petters’s entities. Although he purportedly negotiated on behalf of his U.S. fund investors, Quan’s U.S. victims would receive no money under this agreement.”
Petters ran a multiyear Ponzi scheme in which he claimed to sell electronics to big box retailers such as Wal-Mart and Costco.
In its recent complaint, the SEC sued Quan and his companies, Acorn Capital Group and Stewardship Investment Advisors. Named as relief defendants are Asset Based Resource Group and Quan’s wife, Florene Quan.