MANHATTAN (CN) – The SEC on Tuesday got an emergency court order to stop a prime bank scheme whose operators allegedly stole $2 million to buy luxury cars, go to the Bahamas and pay the bills of a Washington, D.C. law firm.
The SEC claims Frank L. Pavlico III aka Frank Lorenzo, of Clarks Summit, Pa., and Washington D.C. attorney Brynee K. Baylor offered investors “risk-free” returns of up to 20 times their investment within as few as 45 days, through the “lease” and “trading” of foreign bank instruments in complex transactions involving unidentified parties and secretive “trading platforms.”
But the bank instruments and trading programs were “entirely fictitious,” the SEC said in a statement.
It claims that Pavlico and Baylor provided investors with phony contracts and legal documents, digitally created computer screen shots, and copies of fictitious foreign bank instruments. Baylor and her law firm Baylor & Jackson PLLC acted as “counsel” for Pavlico’s company The Milan Group, vouching for Pavlico and acting as an escrow agent, but reality merely receiving and diverting most of the money, the SEC said.
The SEC says the defendants defrauded at least 13 investors of more than $2 million since August 2010. It seeks disgorgement and penalties.
The FBI arrested Pavlico on Nov. 29 and charged him with wire fraud, the SEC said.