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Sarasota Thursday, Jul. 16, 2009 12 years ago

Judge orders Morgans' arrest

by: Robin Roy City Editor

The clock read 10:05 a.m., and Judge Richard Lazzara issued one last call for John and Marian Morgan.

“Will you go sound the halls?” Lazzara asked a Tampa federal court employee.

But the Sarasota couple accused of operating a Ponzi scheme that has cheated investors out of at least $14 million were not in the hallway — or the Tampa federal courthouse.

“Well, Mr. and Mrs. Morgan,” Lazzara sighed. “Madame clerk issue a warrant for the arrest of Mr. and Mrs. Morgan. They have to understand this is serious business.”

A man watching the proceedings in the back of the courtroom, who said he was a victim of the alleged investment fraud but wanted to remain anonymous, said he was pleased with the judge’s order.

“I love it,” he said. “Life is good.”

John and Marian Morgan were ordered to appear before Lazzara July 16 to explain why they should not be held in contempt of court. In a June 25 court hearing before Lazzara, the couple agreed to stop work on the investments operated by their company, Morgan European Holdings (MEH), which has offices in Sarasota and Denmark. They also agreed to a freeze of all assets related to those investments.

But in an e-mail to investors sent just after that June court hearing, Marian Morgan said they were still operating their business.

“We high-tailed it out of Tampa and flew back overnight to Europe, so that we could focus on getting the Morgan European Holdings stuff done, once and for all, and not have it hanging over our heads,” she wrote.
“They cannot serve us (legal papers) in Europe. Please don’t be worried about your funds. They are completely out of the USA jurisdiction.”

The SEC, which is suing the Morgans over the alleged Ponzi scheme, said that e-mail was evidence the Sarasota couple was violating the judge’s order.

SEC attorneys told the judge they have not confirmed that the Morgans are actually in Europe, but do believe they are in Denmark. Lazzara said if they are overseas, they would be arrested at the airport upon their return.

After the hearing, Polly Atkinson, the SEC’s lead attorney, said that the Morgans failure to appear would be used as another piece of evidence against them. If the Morgans are arrested, Atkinson believes they would not be offered bail.

“This is federal court,” she said. “You’re supposed to do what (the judge) says. It’s rare that defendants don’t show up.”

Atkinson estimates she’s tried a dozen Ponzi cases in her 14-year career at the SEC. And, while she says that most of them are similar, she said there is something different about the Morgan case. For example, the e-mails sent to investors in which the Morgans admit they are violating court orders and their failure to appear in court on contempt charges.

“Their behavior is perplexing,” she said.

Contact Robin Roy at [email protected]


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