Pomona man accused of running Ponzi scheme has companies shuttered

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A Los Angeles federal judge barred Ben-Wal Leasing Co. and Ben-Wal Management Inc., and the owner of the two companies, from doing business in response to a complaint alleging investor fraud filed by the Securities and Exchange Commission.

The civil complaint said the two firms, based in Pomona and run by Jerry E. Benson, ran a Ponzi scheme that took nearly $6 million from about 125 investors, many of them elderly, from mobile home parks throughout California.

The court ordered a halt Wednesday to the alleged fraud and also froze the assets of Benson and his Ben-Wal companies. “Mr. Jerry Benson has and will continue to cooperate with the SEC’s efforts to recover investor funds,” Benson’s lawyer, J. Brian Watkins, said in a statement.

“Though cooperating with the SEC, Mr. Benson disputes any allegations of fraudulent conduct and notes that the continuing shift from print to electronic media combined with the economic downturn resulted in a failure of the business,” Watkins said.

In the complaint, the SEC said that since about 1990 Benson had been offering and selling investments in Ben-Wal Leasing through promissory notes. Investors were lured with guarantees of 12% annual returns, and Benson told potential investors that others had earned returns as high as 18%, the commission said.

Ben-Wal Leasing raised at least $5.7 million from about 125 investors from 2004 to April of this year, court documents said. Mobile home parks across the state were specifically targeted with circulated advertisements, the complaint said.

Investors were falsely told that financiers had never lost money through Benson and that their money would be used to buy printing equipment that would be leased out with the lease payments producing the promised 12% returns, the SEC said.

Instead, much of the funds were transferred to a company owned and operated by Benson’s son, Scott W. Benson, known as CTR Web Printing Inc., court documents said.

CTR Printing also was the only company leasing printing equipment from Benson, though CTR failed to make regular lease payments to Ben-Wal Leasing, the complaint said.

New investor funds were used to make principal and interest payments to previous Ben-Wal Leasing investors, the SEC said.

In May 2009, Benson and Ben-Wal Leasing received a desist-and-refrain order issued by the California Department of Corporations, which demanded the man and his business stop offering or selling securities in California in violation of state law.

The SEC’s complaint said that Ben-Wal Leasing stopped making interest payments to investors in June 2009, but then started up a new company, Ben-Wal Management Inc. to continue selling notes.

When Benson stopped paying investors, he told them it was because of an audit; later investors were told they weren’t getting paid because the SEC wasn’t approving his payments, but that he was working with the commission to “expand business,” the complaint said.

The court order also froze the assets of CTR Printing and appointed a temporary receiver over the two Ben-Wal companies and CTR. Investors are asked to contact the SEC’s Los Angeles Regional Office by telephone at (323) 965-4574 or by e-mail at ben-wal@sec.gov if they have questions about the commission’s actions or future court hearings.

-- Nathan Olivarez-Giles