Tuesday, December 6, 2011
The SEC today filed charges and obtained an emergency court order to halt a prime bank scheme in which the perpetrators allegedly stole investor funds to purchase luxury cars, take a trip to the Bahamas, and pay the bills of a Washington D.C. law firm. According to the SEC, Frank L. Pavlico III and Washington D.C. attorney Brynee K. Baylor offered investors risk-free returns of up to 20 times the original investment within as few as 45 days through the purported “lease” and “trading” of foreign bank instruments in highly complex transactions involving unidentified parties and secretive “trading platforms.” However, the bank instruments and trading programs were entirely fictitious. Pavlico and Baylor provided investors with phony contracts and legal documents, digitally-created computer screen shots, and copies of fictitious foreign bank instruments as purported proof of the ongoing success of the transactions. Baylor and her law firm Baylor & Jackson P.L.L.C. acted as “counsel” for Pavlico’s company The Milan Group, vouching for Pavlico and acting as an escrow agent that in reality was merely receiving and diverting the majority of investor funds.
According to the SEC’s complaint filed on November 30 in federal court in Washington D.C. and unsealed by the court late yesterday, Pavlico and Baylor defrauded at least 13 investors out of more than $2 million since August 2010.
The Judge granted the SEC’s request for a temporary restraining order, asset freezes, and other emergency relief to prevent Pavlico, Milan, Baylor, and Baylor & Jackson from further engaging in the investment program. The SEC seeks permanent injunctive relief and financial penalties against Pavlico, Milan, Baylor, and Baylor & Jackson as well as disgorgement from them and the relief defendants of all ill-gotten gains.
Separately, the Federal Bureau of Investigation arrested Pavlico on Nov. 29, 2011, charging him with wire fraud.