SEC says Kaysville man, now deceased, defrauded investors of $29M

KAYSVILLE — The U.S. Securities and Exchange Commission is trying to retrieve $29 million from the estate of a deceased Kaysville man who allegedly swindled more than 50 people of their life savings in a 12-year investment scam.

From July 2011 until his death on June 6, 2022, Stephen Romney Swensen, 50, induced people to invest through his company, Crew Capital Group, promising a guaranteed minimum of 5% annual growth, according to an October SEC filing in U.S. District Court in Salt Lake City. The SEC said Swensen told customers he invested in various securities and that Crew Capital "was one of the safest places to invest their money."

Instead, according to the SEC, Swensen, "in a Ponzi-like fashion," made periodic payments of fictitious earnings to some investors "and used the bulk of the money for personal expenses, including the living expenses of his family and his mistresses," and luxuries including private planes and cars.

The SEC case names the Swensen estate and Crew Capital Group as primary defendants. It also names relief defendants — those the agency alleges received some of the ill-gotten gains — including three other businesses and his widow, Wendy Swensen.

An attorney for the defendants filed an answer to the case on Wednesday, denying all allegations of fraud and asserting that all the defendants acted in good faith. The Crew Capital website has been taken down and no ongoing issue therefore exists, the filing said.

Efforts to contact Thomas A. Brady, the defendants' attorney, were not immediately successful.

The SEC filing said the agency intends to recover investors' money from the relief defendants so the funds can be returned to the fraud victims.

Swensen provided some investors with fake documents designed to assure the investors of the legitimacy of the scheme, and he directed users to a professionally designed Crew Capital website, the SEC said. Crew Capital had no known employees other than Swensen, the filing said.

The SEC said in a news release that the case was investigated by the agency's Salt Lake City office.

Meanwhile, in 2nd District Court in Farmington, several investors have filed claims in the probate case involving Swensen's estate.

A Cache County man said he invested $250,000 with Stephen Swensen on May 8, less than a month before Swensen's death. In April and May, "the walls began to close in around" the scheme as investors became suspicious and Swensen came to suspect he was being investigated, according to the claim.

"He dug deeper into his family's relationships to find new investment, new money," the claim said.

The investor's claim alleged that Swensen pitched his scheme to contacts and friends of his reputable father, Phil Swenson, who was a senior faculty member of the Utah State University Huntsman School of Business. "Upon the coattails of his father's repute, (Stephen Swensen) lured investors, primarily retirees, to transfer their life savings and entire retirement accounts to Crew Capital, the claim said.

A Logan woman filed a claim alleging that she lost $281,000 to the scam and a Salt Lake City couple reported losing $458,000.

The SEC and other agencies say Utah is fertile ground for affinity fraud — investment scams in which perpetrators leverage social and religious relationships — because too many people are too trusting. Kaysville has been the home of several other high-profile Ponzi schemes in recent years.