ATLANTA (CN) - A personal trainer and her accomplice defrauded nine investors of $2.9 million in a "prime bank" scheme, the SEC says. Patricia Gruber and Kadar Josey told suckers that for a mere $200,000 or so, they "would obtain the right to draw upon bank-issued guarantees worth millions of dollars without incurring a corresponding obligation to repay the withdrawn funds," the SEC says.
The SEC sued Gruber, 58, of Dunwoody, and Josey, 36, of Tucker, and their companies, Elite Resources and Elite3 Holding Corp., in Federal Court.
"In at least one case, defendants represented that the investor would receive a 40,000 percent return on the investment," according to the complaint.
Suckers could "participate" by paying a fee ranging from $200,000 to $350,000, the SEC says. In exchange, they would get a "guarantee" with a supposed face value of $100 million to $150 million.
The defendants were to get 6 percent of the face value of the guarantee for arranging the deals.
In their 2-page "lease agreement," investors were told their money would be used to buy a bank guarantee and would be held in escrow until the guarantee was issued.
But - imagine this: "No bank guarantees were obtained and investor funds were misappropriated. ... In fact, the only bank guarantee provided to an investor by defendants, purportedly issued by Barclays Bank PLC, was fictitious."
The SEC seeks an accounting, disgorgement, restraining orders and injunctions.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.
