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Accused Ponzi duo from Sarasota arrested in Sri Lanka

SARASOTA — Sarasota's John and Marian Morgan, who fled the country in July to avoid federal contempt charges in connection with an alleged Ponzi scheme, have been arrested by authorities in Sri Lanka.

The couple were picked up on separate charges of running a fraudulent banking scheme. The charges originated in Sri Lanka.

The Sri Lankan government is reaching out to U.S. officials to figure out what to do next with the Morgans. The choices include extraditing them to the United States or prosecuting them first under Sri Lankan law.

Two weeks before a contempt-of-court hearing scheduled for July 16, the Morgans used their valid U.S. passports to fly from Miami to Switzerland, said Ron Lindbak, a spokesman for the U.S. Marshals Service in Tampa.

Marshals learned of that flight only after U.S. District Court Judge Richard Lazzara ordered the Morgans' arrest at the contempt hearing. The couple had been summoned to the hearing to explain why they had failed to comply with an order from Lazzara to give an accounting of the money involved in the scheme and to bring it back to the United States.

Two of the couple's alleged victims were delighted to hear about their arrest.

"When they bring them to court, I will come down there," said Jackie Allen of Moultrie, Ga., whose 84-year-old father, Jack Godbee, invested $150,000 with Stephen Bowman, an Omaha, Neb., man who is alleged to have pooled investors' money in the domestic portion of the scheme.

"I want to be sitting there — and them look me straight in the face — and tell them, you have basically killed my daddy and I want you to fry," Allen said.

Polly Atkinson, the lead U.S. Securities and Exchange Commission lawyer in the case, said she was informed Friday afternoon of the arrest by the Washington, D.C., office of the Marshals Service.

An SEC prosecutor has estimated that the couple took in at least $10 million from at least 100 investors.

But the SEC has leads into other investment groups that pooled other investors' funds on behalf of the Morgans, meaning there is a strong possibility that the losses could be even greater, Atkinson said.

Accused Ponzi duo from Sarasota arrested in Sri Lanka 08/16/09 [Last modified: Sunday, August 16, 2009 9:23pm]
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