Adviser’s Widow to Pay More Than $3.8M for Husband’s Ponzi Scheme
The U.S. Securities and Exchange Commission has announced a final judgment in a case against the estate of Stephen Romney Swensen, a former investment adviser who ran a decade-long fraudulent investment scheme. The judgment requires Swensen’s widow, Wendy Swensen, to disgorge nearly $3.84 million in funds she received as a result of the scheme.
The SEC’s initial complaint, filed in October 2022, detailed how Stephen Swensen, who died on June 6, 2022, defrauded over 50 investors of more than $29 million between 2011 and 2022. Swensen, through his company, Crew Capital Group, LLC, falsely promised investors a minimum annual return of 5% and up to 10% based on the performance of the S&P 500. According to the complaint, he told investors that Crew Capital was a safe, actively managed fund that invested in bank loans and options.
According to the complaint, these claims were completely false. Swensen created an elaborate facade to convince his victims of the fund’s legitimacy. This included doctoring actual documents from a reputable company, Pacific Investment Management Company LLC, or PIMCO, to make it appear that Crew Capital was a co-managed fund with over $300 million in assets.
Additionally, Swensen paid for virtual office and mail forwarding services to create fake mailing addresses in major cities like Boston, New York City, and San Francisco; created a fake website where investors could view, unbeknownst to them, fictitious account balances and earnings; and used a privacy package, i.e., paid extra to a business entity creation service to keep his name off public documents filed with the state of Nevada, hiding his ownership of Crew Capital.
The SEC’s investigation revealed that Crew Capital did not invest any money in securities. Instead, Swensen pooled investor funds and used the money to make Ponzi-like payments to other investors and to fund a lavish lifestyle for himself and his family. The complaint alleges he used the misappropriated funds to pay for real estate, vehicles, private aircraft, and other living expenses for his family and at least two mistresses.
The SEC’s complaint charged Swensen’s estate and Crew Capital with violating antifraud provisions of the federal securities laws. The final judgment orders Wendy Swensen to pay $3,626,138 in disgorged investor funds, along with an additional $212,871 in prejudgment and earned interest.
The total amount of $3,839,009 will be returned to the victims through a court-appointed receiver. The SEC did not allege any wrongdoing by Ms. Swensen in the scheme.
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