The Securities and Exchange Commission (SEC) has charged two executives of a Florida-based business development company and its public auditor with defrauding at least 60 investors out of an estimated $2.5 million that they had invested in an essentially fake company.

The SEC alleges that between 2005 and 2008, Daniel Imperato, owner and CEO of West Palm Beach, Fla.-based Imperiali Inc. orchestrated a scheme to defraud investors by making it appear that it was a thriving multinational corporation with several wholly owned businesses, when in fact it was nothing more than a shell corporation.

The SEC complaint alleges Imperiali raised approximately $2.5 million using offering materials that included numerous material misrepresentations and omissions, and that Imperato and former company CFO Charles Fiscina drafted, reviewed and certified at least 16 materially false and misleading registration statements, periodic reports and current reports with the SEC on behalf of Imperiali.

The SEC also claims that those filings overvalued Imperiali's virtually worthless assets at amounts ranging from $3.5 million to $269 million, and failed to disclose the issuance of millions of shares of restricted stock.

The SEC also alleges that Imperiali Inc. auditor Lawrence A. O'Donnell, of Aurora, Colo., failed to audit the company's financial statements in accordance with Public Company Accounting Oversight Board Standards, and issued audit reports on Imperiali's financial statements that he knew, or was reckless in not knowing, contained materially false and misleading information.

Without admitting or denying the SEC's allegations, Fiscina has consented to the entry of a final judgment that permanently enjoins him from future violations of the Securities Act, and bars him from acting as an officer or director of a public company.

The SEC seeks permanent injunctions and civil penalties from each defendant, forfeiture of illegal profits with prejudgment interest from Imperiali and Imperato, and to bar Imperato and Fiscina from ever serving as a director or officer of a publically held company.

Fiscina's final judgment does not impose a civil penalty against him based on his sworn inability to pay. The settlement is subject to court approval.