Ordering for an emergency asset freeze against the accused, the US market watchdog said that the bank’s schemes enticed investors to participate in a sham international investing opportunity with phony promises of exclusivity and enormous profits.
The SEC claimed that attorney Bernard Butts, Jr. has worked as an escrow agent to allow Fotios Geivelis, Jr. and his purported financial services firm Worldwide Funding III Limited to defraud nearly 45 investors out of more than $3.5m, who invested in the airy trading program.
Both accused, Geivelis and Butts, assured investors that their funds would remain with Butts in an escrow account until Worldwide Funding purchases the bank instruments necessary to generate the promised returns.
Butts used the investor funds for personal benefits, as well as gave to sales agents, and Geivelis, who has been spending the money on such personal expenses as travel and gambling.
As per the complaint filed in the federal court in Miami, the SEC has also sued three sales agents, including Douglas Anisky, James Baggs, and Sidney Banner, and his company Express Commercial Capital, who received monetary benefits from Geivelis and Butts.
SEC Denver regional office acting co-director Julie Lutz said that Geivelis attempted to add a twist of legitimacy to a classic prime bank scheme by using a long-time attorney as an escrow agent to give investors the false impression that their money was secure.
"Meanwhile, Geivelis and Butts have misused investor funds and made lulling statements to investors that portray the sham trading program as successful and payments to investors as imminent," Lutz added.
The SEC’s complaint sues all defendants with breach of the antifraud and securities registration provisions of the federal securities laws as well as violations of the broker-dealer registration provisions.
