Two accused of fraud in US arrested in Sri Lanka

John and Marian Morgan who fled the US in July to avoid federal contempt charges in connection with a get-rich-quick banking scheme - have been arrested in Sri Lanka.

Marian Morgan of Sarasota, US is said to have sent reassuring e-mails to investors.

The couple were picked up on separate charges of running a fraudulent banking scheme, charges originating in Sri Lanka. Two weeks before a contempt-of-court hearing that was scheduled for July 16, the Morgans used their valid US passports to fly from Miami to Switzerland, said Ron Lindbak, a spokesman for the US Marshals Service in Tampa.

The Marshals Service learned of that flight only after US 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 US.

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

The Morgans' presence in Sri Lanka surprised both Atkinson and the Marshals Service. "Last we heard they were in Switzerland," she said.

The government alleges that from April 2006 until recently, the defendants defrauded investors by offering and selling investments in a fictitious bank-to-bank trading program.

Investors were lured by the promise of monthly returns ranging from 14 percent to 70 percent.

Before their alleged Ponxi scheme fell apart, the couple were active on the Sarasota social scene.

They bought and occupied two consecutive bayfront homes in Sarasota and still own both of them, one in their own name and the other through a land trust.

Sarasota Herald - Tribune.