Guy Andrew Williams, 42, and Brent F. Williams, 66, both of Mesa, Arizona, were convicted by a federal jury in Phoenix on June 28, 2013, of 38 counts of conspiracy, wire fraud, mail fraud, and money laundering. The two-week trial was conducted by U.S. District Judge Jack Zouhary, a visiting judge from the Northern District of Ohio. . .. . .According to the evidence at trial, Guy Andrew Williams and his father, Brent F. Williams, served as the managing director and chief financial officer, respectively, of a group of Mesa, Arizona-based investment funds known as the "Mathon" entities. The evidence at trial showed that the Mathon entities collected more than $100 million in funds from investors from February 2002 until April 2005.The evidence at trial further showed that Mathon's investors, the majority of whom were members of the Church of Jesus Christ of Latter-Day Saints and hailed from Arizona, Utah, and Nevada, were generally told that their money would be used to make short-term loans to third-party borrowers at a high interest rate and that Mathon had an extensive track record of making such loans. In fact, the evidence at trial showed that the defendants and their business partners ran Mathon as a Ponzi scheme-that is, by using the overwhelming majority of incoming money from new investors to pay back initial investors. Finally, the evidence at trial showed that the defendants and their business partners paid themselves extravagant salaries and bonuses exceeding $10 million and also used their investors' money to make millions of dollars of "loans" to companies they secretly controlled. . .
On Sept. 30, 2013, three defendants - Duane Hamblin Slade, 42, of Austin, Tex.; Guy Andrew Williams, 42, of Mesa, Ariz.; and Brent F. Williams, 66, of Mesa, Ariz. - were sentenced to lengthy prison terms by U.S. District Judge Jack Zouhary, a visiting judge from the Northern District of Ohio, for their roles in operating a $166 million Ponzi scheme that targeted members of their church. Slade was sentenced to 180 months (15 years), Guy Williams was sentenced to 150 months (12.5 years), and Brent Williams was sentenced to 90 months (7.5 years). In addition, Slade was also sentenced to a concurrent 15-year sentence for his participation in a separate fraud scheme, initiated after the cessation of the previous scheme, in which he solicited more money from fellow church members under false pretenses.. . .Slade was convicted of both offenses via guilty plea in June 2013, and the Williamses were convicted following a two-week trial in June 2013. According to the evidence at trial, the defendants served as founders and/or officers of a group of Mesa, Arizona-based investment funds known as the "Mathon" entities, which collected more than $166 million in funds from investors from February 2002 until April 2005. The evidence at trial further showed that Mathon's investors, the majority of whom were members of the Church of Jesus Christ of Latter-Day Saints and hailed from Arizona, Utah, and Nevada, were generally told that their money would be used to make short-term loans to third-party borrowers at a high interest rate and that Mathon had an extensive track record of making such loans. In fact, the defendants and their business partners ran Mathon as a Ponzi scheme - that is, by using the overwhelming majority of incoming money from new investors to pay back initial investors. The defendants and their business partners paid themselves extravagant salaries and bonuses exceeding $10 million and also used their investors' money to make millions of dollars of "loans" to companies they secretly controlled.
Pages 2 - 3 of the OIPA. RESPONDENT1. From at least 2003 to 2005, Respondent was the Chief Operating Officer of Mathon Management Company, LLC, a company that was registered with the Commission as an investment adviser from March 2, 2004 to February 2011. Respondent is 66 years old and is currently incarcerated at the Federal Correctional Institution at La Tuna in Anthony, Texas.B. ENTRY OF RESPONDENT'S CRIMINAL CONVICTION2. On June 28, 2013, Respondent was found guilty, after a jury trial, of conspiracy to commit mail and wire fraud, mail fraud, wire fraud, and transactional money laundering, all in violation of Title 18 United States Code, Sections 1349, 1341, 1343, and 1957(a) before the United States District Court for the District of Arizona. United States v. Brent F. Williams, Case No. CR 09-01492-003-PHX-ROS. On September 30, 2013, he was sentenced to a prison term of ninety (90) months, followed by three years of supervised release.3. The counts of the criminal indictment to which Respondent was found guilty alleged, inter alia, that from 2002 to 2005, Respondent and others operating through Mathon related entities, falsely promised investors that Mathon could earn high-yield rates of return for investors by making short-term, high-interest hard money loans to borrowers, and using repayment of principal and interest on those loans to pay investor returns, when the Respondent knew that the loans were in default or non-performing. The Respondent concealed from the investors that the loans were in default, non-performing and/or otherwise incapable of generating high rates of returns on the purported "investments" as the Respondent represented. The Respondent also repaid earlier investors with funds from later investors and unlawfully enriched himself through excessive origination fees, management fees, and other means. Specifically, the Respondent took $623,888 from victim investors as purported compensation and other financial remuneration.
To allow time for Williams's Answer,2 consistent with 17 C.F.R. § 201.161, the hearing will be postponed sine die, and a prehearing conference will be held by telephone during the week of March 30, 2015, if the proceeding has not been resolved by then. The Division will arrange with officials at the prison where Williams is incarcerated for a date and time when he can be made available.
In his Answer to the OIP Williams denies misconduct and notes the pendency of his appeal. However, it is well established that the Commission does not permit criminal convictions to be collaterally attacked in its administrative proceedings. See Ira William Scott, Advisers Act Release No. 1752, 1998 SEC LEXIS 1957, at *8-9 (Sept. 15, 1998); William F. Lincoln, Securities Exchange Act of 1934 (Exchange Act) Release No. 39629, 1998 SEC LEXIS 193, at *7-8 (Feb. 12, 1998). Nor does the pendency of an appeal preclude the Commission from action based on a conviction. See Joseph P. Galluzzi, Exchange Act Release No. 46405, 2002 SEC LEXIS 3423, at *11 n.21 (Aug. 23, 2002); Charles Phillip Elliott, Exchange Act Release No. 31202, 1992 SEC LEXIS 2334, at *11 (Sept. 17, 1992). If Williams is successful in overturning his conviction, he can request the Commission to vacate any sanctions ordered in this proceeding (or to dismiss the proceeding, if it is still pending).A prehearing conference will be held by telephone on Tuesday, March 31, 2015, at 3:30 p.m. EDT. . .
[A] prehearing conference was held yesterday. Spencer E. Bendell and Melissia Buckhalter-Honore appeared on behalf of the Division of Enforcement (Division), and Williams appeared pro se.Williams has filed his Answer to the OIP. The Division will forward its investigative file to the facility at which he is incarcerated by April 14, 2015. 1 The Division was granted leave to file a motion for summary disposition pursuant to 17 C.F.R. § 201.250, which will be due by April 28, 2015. Williams may file an opposition by June 30, 2015, and the Division, a reply, by July 10, 2015.
UNITED STATES OF AMERICABefore theSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549ADMINISTRATIVE PROCEEDINGS RULINGS Release No. 2533/April 13, 2015ADMINISTRATIVE PROCEEDING File No. 3-16337In the Matter of BRENT F. WILLIAMSORDERThe Securities and Exchange Commission instituted this proceeding on January 13, 2015, pursuant to Section 203(f) of the Investment Advisers Act of 1940. The proceeding is a follow-on proceeding based on United States v. Williams, No. 2:09-cr-01492 (D. Ariz. June 28, 2013), appeal docketed, No. 13-10529 (9th Cir. Oct. 11, 2013), in which Respondent Brent F. Williams (Williams) was convicted of mail fraud, wire fraud, conspiracy to commit mail and wire fraud, and money laundering, in violation of 18 U.S.C. §§ 1341, 1343, 1349, and 1957(a).At the March 31, 2015, prehearing conference the Division of Enforcement (Division) was granted leave to file a motion for summary disposition pursuant to 17 C.F.R. § 201.250, and a schedule was set. Brent F. Williams, Admin. Proc. Rulings Release No. 2480, 2015 SEC LEXIS 1183 (A.L.J. Apr. 1, 2015). The Division was to forward its investigative file to the facility at which Williams is incarcerated by April 14, 2015. 1 The Division has requested a two-week extension of this date, stating that the Bureau of Prisons requires that the documents must be produced in paper form via U.S. Mail and that the conversion of the file into paper form (approximately 43,000 printed pages) will not be completed by April 14, 2015. Accordingly, consistent with 17 C.F.R. § 201.161, the due date for the production of the investigative file will be extended to April 28, 2015, and the due dates for Williams's opposition and the Division's reply will be extended by two weeks to July 14, 2015, and July 24, 2015, respectively.2IT IS SO ORDERED./S/ Carol Fox Foelak Carol Fox Foelak Administrative Law Judge1 See Byron S. Rainner, Exchange Act Release No. 59040, 2008 SEC LEXIS 2840, at *7 (Dec. 2, 2008); Josť P. Zollino, Exchange Act Release No. 51632, 2005 SEC LEXIS 987, at *10 (Apr. 29, 2005).2 The Division did not request an extension of the April 28, 2015, due date for its motion for summary disposition.