TOP STORY, July: SEC: Morgans boast about fleeing to Europe

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ORIGINALLY PUBLISHED July 9, 2009

The Sarasota couple accused of running a $14 million Ponzi scheme has allegedly ignored a judge’s order to stop working its investments.

The evidence against them — an e-mail Marian Morgan sent to investors within the last week, in which she claims she and her husband, John, are still working with their company, Morgan European Holdings. The SEC claims in its court filing that in the e-mail, Marian Morgan “boasted” that the couple is out of reach of American authorities, as are the funds invested with them.

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

Judge Richard Lazzara has ordered the Morgans to return to his Tampa courtroom next week or a warrant for their immediate arrest will be issued. The court order said they will have to explain why they should not be held in contempt of court.

The SEC said the Morgans also failed to comply with a judge’s order to file accountings of investors’ funds and have not shifted assets held in offshore accounts to the United States.

The Morgans and two co-defendants in Nebraska and Texas are are accused of collecting millions from investors and using that money to pay mortgages, gambling debts and Ponzi payments to other investors. The SEC claims they never invested the approximate $14 million collected.

During a June 25 court hearing, the Morgans agreed to freeze all their assets until their trial.

Also during the hearing, Lazzara asked the SEC’s attorneys if all parties were served legal papers. The attorneys replied that the Morgans were served by e-mail, not in person. The judge accepted that. But Marian Morgan wrote a different description of the exchange in her e-mail.

“The judge got furious with the plaintiffs,” she wrote. “He asked them sarcastically if they ever intended to serve us in person. The embarrassed answer he got was ‘yes’ they planned to. The bottom line is that the judge told us we had plenty of time to retain a lawyer since we had not even been served yet.”

During the hearing, Lazzara reprimanded the Morgans for not having an attorney with them. He told them that they could represent themselves, but, by law, they could not represent their company. John Morgan said he needed another week or two to secure the services of Fort Lauderdale attorney William Nortman.
Lazzara granted him another two weeks.

The SEC also submitted a separate correspondence from Marian Morgan to their investors in its court filings.

“Some of you may recall that Eli (the Morgans’ Danish attorney) goes on an annual vacation every month of July with no answering service as back up in his office,” Marian Morgan wrote. “In the past that has been a source of frustration for us. Naturally, we wondered whether we would be left on a desert island again for one month? The answer, fortunately, is no. Eli is closing his office for July 2009. However, he is working side-by-side with us to get all wires sent. So please do not worry if you had sent an e-mail and received an out-of-office reply or if you called and got an outgoing answering machine message saying his offices are closed for the month of July. I am very joyful that wires will finally commence.”

BOX
In her own words

Hello everyone!

We are back in Europe to continue our mission with laser focus on having all MEH (Morgan European Holdings) wires go out yesterday! We had no choice but to fly to Tampa for the hearing on (June) 25th.

The press has their own twist on everything, so let me tell you what actually happened. We have not been able to retain a lawyer, as our intended lawyer, William Nortman from Akerman Senterfitt, who used to be a very big cheese with the SEC and is an awesome attorney, has asked us for an $80,000 retainer. We have not been able to provide that for him yet. So we represented ourselves.

We were told beforehand that it would be best to tell the court that we had no problem with them extending the asset freeze, as we do not have a lawyer to tell them why not, so we did just that. The judge then asked when we had been served this lawsuit. The SEC attorneys said they served all defendants on the 11th of June. We piped in that we were served via e-mail. The judge got furious with the plaintiffs. He asked them sarcastically if they ever intended to serve us in person. The embarrassed answer he got was “yes” they planned to!!! The bottom line is that the judge told us we had plenty of time to retain a lawyer since we had not even been served yet!!!!

It now ends up being a good thing that we had not retained a lawyer because they could have, and would have been able to serve him instead of us. All things do work out for good, don’t they???

Bottom line: We high-tailed it out of Tampa and flew back overnight to Europe so that we could focus on getting the MEH stuff done, once and for all, and not have it hanging over our heads. They cannot serve us in Europe. They do not have an attorney to serve in the USA. Please don’t be worried about your funds.
They are completely out of the USA jurisdiction, and we will have all funds wired before anyone can even begin to look at anything. We will not release the names of any MEH people ever.

I know it is easy for me to tell you to relax, but you need to. We must and will send your wires directly to you and not through a third party, like the SEC. Eli (the Morgans’ Danish attorney) has assured me that he will do whatever it takes to help each and every one of us. Thank you for all your prayers and support. We are exhausted and stressed out and can’t wait to get our work done and see you happy and relaxed.

Marian

UPDATE: The Morgans were arrested in August in Sri Lanka, where they waited until they were extradited back to the U.S. in December.

Contact Robin Roy at [email protected].