On September 9, 2013, the SEC announced that they had charged a Miami-based attorney and other perpetrators of a prime bank investment scheme that promised exorbitant returns from a purported international trading program.

Prime bank schemes lured investors to participate in a sham international investing opportunity with phony promises of exclusivity and enormous profits.  The SEC alleged that attorney Bernard H. Butts, Jr. acted as an escrow agent to enable Fotios Geivelis, Jr. and his purported financial services firm Worldwide Funding III Limited, to defraud approximately 45 investors out of more than $3.5 million they invested in a trading program that did not actually exist.  Geivelis, who lives in Tampa and used the alias “Frank Anastasio” with investors, touted returns of 6.6 million Euros (approximately $8.7 million converted to U.S. dollars)  within 15 to 45 business days on an initial investment of $60,000 to $90,000 in U.S. dollars.  Geivelis and Butts allegedly assured investors that their funds would remain with Butts in an escrow account until Worldwide Funding acquired the bank instruments necessary to generate the promised returns.  Butts instead had been doling out investor funds almost as soon as they were received to enrich himself, sales agents, and Geivelis, who had been spending the money on such personal expenses as travel and gambling.

The SEC’s complaint, filed under seal on August 29 in federal court in Miami, also charged three sales agents who Geivelis and Butts paid to sell interests in the scheme: Douglas J. Anisky of Delray Beach, Florida, James Baggs of Lake Forest, California, and Sidney Banner of Delray Beach, Florida.  The court granted the SEC’s request for an asset freeze on August 30, and the case was unsealed late Friday, September 6th.

According to the SEC’s complaint, investors were lured through the Internet, telephone, and personal contact with promises of extraordinary profits.  Investors were told their $60,000 to $90,000 investment would pay for bank charges to lease a standby letter of credit (SBLC) in the amount of 10 million Euros from a banking group in Europe.  The SBLCs were to be used to acquire loans, and the funds from the loans were to be placed in a securities trading program.  Investors were promised that after their initial profit of at least 6.6 million Euro within 15 to 45 business days, the securities trading program would generate a weekly return of approximately 14 percent for 40 to 42 weeks.

The SEC alleged that investors were falsely promised that their money was being deposited into Butts’ attorney trust account, and Butts would not release the funds until he received proof from the receiving bank that a $10 million Euro SBLC had been deposited into the securities trading program to generate profits for investors.  Contrary to these representations by Butts, Geivelis, and the sales agents, no SBLC acquisitions ever occurred, no loans were obtained, and no promised returns were earned in a trading program or paid to investors. Investors were not told that instead of using the funds to obtain SBLCs, Butts and Geivelis each took approximately 45 percent and paid approximately 10 percent to the sales agents.

The SEC’s complaint charged all defendants with violations of the antifraud and securities registration provisions of the federal securities laws.  The complaint also charged Butts, Geivelis, Anisky, Banner, Express Commercial Capital, and Baggs with violations of the broker-dealer registration provisions of the federal securities laws.  The SEC is seeking disgorgement of ill-gotten gains, financial penalties, and permanent injunctions.  The SEC’s complaint named several relief defendants: Butts’ law firm, his wife Margaret A. Hering, and Butts Holding Corporation as well as two other companies with ties to Geivelis (Global Worldwide Funding Ventures) and Anisky (PW Consulting Group).  The complaint named relief defendants for the purposes of recovering any ill-gotten assets from the fraud that may be in their possession.