The Securities And Exchange Commission (SEC) on Monday charged United American Ventures LLC (UAV) and Integra Investment Group and the two firms' officers with selling about $10 million in fake convertible bonds.

The bonds were sold to 100 investors, but the officers used their money to pay each other exorbitant salaries, SEC officials said.

The SEC's complaint, filed in federal court in Albuquerque, N.M., alleges the sales took place between July 2007 and November 2009. Names in the suit were Irvine, Calif.-based UAV and its principals Philip Lee David Jack Thomas, Eric J. Hollowell, Matthew A. Dies, and Albuquerque.-based Integra and its principal, Anthony J. Oliva.

Without admitting or denying the allegations in the SEC complaint, the defendants each consented to final judgments permanently enjoining them from violations, according to the SEC. Integra, which was owned and controlled by Oliva, used a Web site and investment seminars to solicit investors for UAV.

The SEC's complaint alleges that the defendants misrepresented and concealed numerous material facts from investors, assuring investors that UAV had a strong track record of profiting from medical-related investments and that investors would earn a guaranteed 25 percent annual return on UAV's bonds.

In reality, UAV had no such record or experience, and never earned a return from any investment, but instead used nearly all the investors' money to pay exorbitant salaries and benefits to Thomas and Hollowell. The money was also used to pay referral fees to Integra and Oliva, and for Ponzi-type interest payments to investors.

The SEC also claims that the defendants misrepresented Thomas' venture capital experience and educational background, and failed to inform investors that Thomas was previously barred by a California court from being involved in any securities offering.

The SEC complaint also seeks disgorgement of any ill gotten gains, prejudgment interest, and civil penalties from all of the defendants, as well as another entity controlled by Thomas, All American Capital Corporation.

-Jim McConville