SEC is investigating Omaha businessman Stephen Bowman

For three years, people who invested a total of $11 million with an Omaha man heard excuse after excuse about why they didn't have their money and the profits they expected.

They were told about complications from bank bailouts. Reports to the United Nations. European holidays. Patriot Act scrutiny.

Federal investigators say there's another reason they didn't get their money.

Fraud.

The U.S. Securities and Exchange Commission has accused Omaha businessman Stephen E. Bowman of helping orchestrate an international investment scam. Bowman, when approached at his west Omaha home, politely declined to comment.

But court records, interviews and public records reveal more about who Bowman is and why investors bought into what the SEC says was a financial hoax.

“I guarantee you, it's greed, all the way around,” said California investor John Cartwright, a criminal intelligence analyst who lost $10,000. “I'm totally guilty of it.”

Investors also say the scheme appealed to their giving nature, with a humanitarian foundation supposedly getting a portion of the profits.

Jackie Kreitzman, a speech-language pathologist in Southern California, planned to create her own foundation for health care reform and quit charging a tenant rent, thinking she was about to be a millionaire.

“It's not just about the money,” she said. “It was giving people hopes, dreams and possibilities.”

Colorado hog farmer John Long, who lost $352,000, is one of the people kicking himself in retrospect. “My biggest fear of the whole thing is the pigs might fire me for being so damn stupid,” he said with a hearty laugh.

But he said the idea of fabricating and sustaining a fraud for years is mind-boggling to most people. “That's just so contrary to the life we know,” he said. “Most of us are not prepared to deal with someone who has no conscience.”

In all, Bowman and a Texas man are accused of persuading more than 150 investors to send money in 2006 and 2007 for an investment program that the SEC says never existed. Business people, attorneys, doctors and others from 28 states sent $1,000 to $616,000 apiece, according to a list Bowman gave authorities.

The money, they were told, would be invested in a prime bank trading program that guaranteed the initial money plus, within 120 days, profits of up to 70 percent a month.

Even Charles Ponzi, the 1920s con man for whom such scams were named, didn't promise a profit that big.

The SEC and other federal agencies say prime bank and other high-yield investment programs are always a fraud.

Bowman, 61, and his Omaha company, Bowman Marketing Group, worked with Morgan European Holdings, a Danish company run by John S. and Marian I. Morgan of Sarasota, Fla. Their attorney could not be reached for comment.

Bowman and the Morgans are accused of sustaining the fraud, sending e-mails — some as recently as two weeks ago — promising investors their windfall was arriving in days.

Before sending money, Long spoke with previous investors and listened to investor conference calls for several months. He increased his investment after being paid on time from a 14 percent profit program. He said two other investors said they had done background checks on the principals and found nothing suspicious.

“When troubles start,” Long said, “you find out how little you did know.”

As a budding author in 1975, Bowman pitched a different kind of investment.

The Red Oak, Iowa, native sent letters to 500 people asking them to “invest” $35 toward publishing his fictionalized book about the 1912 Villisca, Iowa, ax murders. He has published two other books.

Bowman has run or created several marketing companies in Omaha in the past 30 years. Bowman Marketing Group advertises that it also develops business plans and raises capital for companies.

By the late 1990s, Bowman and his wife, Gail, lived in a chalet-style house in the Ponca Hills on Omaha's northern edge. Bowman amassed a book collection that included autographed first editions by Steinbeck and Hemingway. He had a silver Mini Cooper.

However, in 2001, he and his wife filed for bankruptcy and moved into an apartment.

Great Western Bank sued Bowman for $165,748 that remained unpaid on a $350,000 loan due in 2000. When Bowman arrived at his debtor's examination in 2003 to be questioned about his assets, he was wearing a $5,000 TAG Heuer watch.

Deputies later seized the watch, diamond jewelry, a purple beaver fur coat, the first-edition books and other possessions and sold them at a sheriff's auction, generating $22,721 toward the debt.

A few years later, after Bowman started with the supposed prime bank investment, his wife bought a $433,000 brick house in a wooded neighborhood near 114th and Pacific Streets. Bowman got a new Kia Spectra, and his wife a Nissan SUV.

While Bowman bought, investors waited to be paid.

Many put financial decisions on hold. Some pleaded for their money for emergencies.

A Texas woman said she had no insurance to cover medical tests and was going to lose her car. By e-mail, she begged Marian Morgan to say whether her money was gone.

“WOULD THAT NOT BE THE HUMANE THING TO DO?? THIS HAS DAMNED NEAR COST ME A NERVOUS BREAKDOWN AND I FOR ONE CAN NOT TAKE THIS EMOTIONAL ROLLER COASTER ANY LONGER.”

A few investors were repaid their initial money with no profit, but the SEC said those were Ponzi payments, coming from other investors' contributions rather than a successful investment program.

Eventually, some concluded they'd been had.

“It takes a giant step to admit how stupid you were,” Long said. “Half of them still believe they're going to get paid.”

Kreitzman got her $200,000 after getting an attorney. She later traveled to Copenhagen to confront the players.

She had considered Bowman a good friend. “They have shaken our foundation for trusting human beings,” she said. “It's despicable.”

Long now knows that the principals should have been registered with the SEC as broker-dealers to sell investments. An online check would have uncovered that information and raised a red flag, he said.

Several investors say they filed complaints with several agencies, with little results, until the SEC's Denver office got involved this spring.

While SEC investigators subpoenaed records, Bowman and Marian Morgan kept sending assurances to investors.

“We work hard every single day around some very extraneous circumstances but we will never give up,” Marian Morgan wrote April 27.

The Nebraska Department of Banking and Finance issued a cease-and-desist order in March, telling Bowman to stop selling securities because he was not a registered broker-dealer. As of Saturday, Bowman's Web site makes him appear open for business, touting, “At the end of the day, it boils down to the ability to get things done.”

When Bowman was asked under oath in May where the money was, he refused to answer based on his Fifth Amendment rights, according to the SEC complaint.

According to an SEC accountant's affidavit, Bowman appears to have spent $339,000 on gambling and withdrawn nearly $300,000 in cash.

The Morgans appear to have put some into their $2 million house and a $7 million house and lot in Sarasota and a Jaguar car, the accountant alleged.

An SEC attorney saw the Morgans' house for sale on a real estate Web site June 4. Within a week, he filed a civil action in U.S. District Court in Florida, accusing the Morgans and Bowman of defrauding investors and requesting an emergency court order.

During that week, Marian Morgan e-mailed investors: “Send us POSITIVE thoughts and wishes and karma and whatever else you can do. No negative, cynical thinking please !!! No 20 questions for me. I will be focused on getting re$ult$.”

She closed with: “Good things are happening and we will all have the rewards we so justly deserve.”

What she and her associates deserved, a Florida judge decided, was to have their assets frozen while the federal fraud investigation continues.