400 Bilked in Ponzi Scheme, SEC Contends
About 400 “naive” investors, most of them recruited by Clifford E. Lampman at Christian Bible study groups that he organized, turned over a total of about $10 million to his fraudulent “international” business based in Covina, federal securities regulators told a court here Friday.
Only $200 of the investors’ money has been found in seized bank accounts, they said.
U.S. District Judge A. Wallace Tashima appointed a temporary receiver to try and find more assets. He also granted a Securities and Exchange Commission motion for a preliminary injunction barring Lampman and an associate, Robert L. Matson, and several of their companies from making fraudulent misrepresentations to investors or selling unregistered securities.
The companies are Lampman International, Lampman & Associates, Medium Business Buyers Group and R. L. Matson Corp. The SEC said Matson’s attorney consented to entry of a preliminary injunction and made no appearance at court.
The SEC complaint alleged that Lampman promised investors 20% to 25% annual interest on their money, which he said would go into ventures in Mexico and South Korea. He also promised that 10% of all funds raised would go to a purported organization to “spread the gospel” in those two countries, the SEC said. However, no Lampman firms ever engaged in any such operations, according to the complaint.
Promissory Notes
Although “at one time” Lampman & Associates acted as an engineering consulting firm for California municipalities, the suit said, since at least 1980 its “principal business” has been the offer of unregistered securities in the form of promissory notes in California and other states.
The defendants’ actually were conducting a “Ponzi scheme,” the complaint said, since any return paid on investments “was taken directly from the principal invested by other persons.” Much of the money was misappropriated by defendants, it said.
SEC court papers said Lampman used a prepared list of answers to 20 questions to allay fears of potential investors. A former Lampman accountant, Barry P. Johnson of Aptos, Calif., said in an affidavit that he personally knew that many of Lampman’s oral and written statements to investors were false.
Attacked Credibility
Lampman’s attorney, Fred M. Cohen, attacked Johnson’s credibility and argued that there was “no basis” for the SEC suit, since some proceeds of the investments were said to be for “religious purposes” and therefore beyond the power of government. Tashima rejected that argument.
According to Johnson’s affidavit, he invested $25,000 with Lampman in 1982 after being introduced to him by his wife’s parents, who had invested $75,000. Lampman soon hired him to do financial work, the affidavit stated, and Johnson discovered in an audit that most of the $10 million from investors was commingled with general funds of the Lampman firms and the proceeds diverted to other uses.
