Two people have been charged by the Securities and Exchange Commission with bilking investors out of $2.2 million by selling fictitious “prime bank instruments,” the SEC announced Tuesday.

The SEC warned that “all prime bank investment programs,” which frequently promise quick and exorbitant returns, are fictitious and should be avoided by investors.

Peter Baker of Lawrenceville, Ga., and Elizabeth Oharriz of Miami Shores, Fla., and their companies, Prestige Global Trading, Diversified Initiatives Consulting & Logistics, and Sienna Business Group, have been charged with defrauding investors out of $2.2 million that was supposed to be invested in “prime banks.” Instead the money was used by them for personal expenses and for payments to third parties, the complaint said.

The scheme allegedly was carried out between 2013 and 2017, during which time Baker and Oharriz falsely told investors that their money would be used to obtain instruments issued by well-known commercial banks and promised investors astronomical profits. The SEC did not say what kind of returns were promised to investors.

The two promised investors that they would return any advance payments the investors made if Baker and Oharriz could not secure the instruments. The complaint said that to prevent investors from uncovering their fraud, Baker and Oharriz gave investors fabricated bank instruments and other supporting documents.

The SEC is asking for permanent injunctions, disgorgement plus prejudgment interest and civil penalties against the people and companies. Oharriz, Sienna and Diversified Initiatives have agreed to a partial settlement in which they will be permanently enjoined from future violations of fraud laws. Monetary relief will be determined by the court.

The SEC warned investors that promoters of prime bank programs often claim that investors’ funds will be used to buy and trade supposed prime bank instruments, and that investors will receive guaranteed, high investment returns with little or no risk. 

“Promoters try to make the schemes sound legitimate by using complex, sophisticated, and official-sounding terms, [such as] debenture, standby letter of credit, bank guarantee, prime world bank financial instrument, private funding project, offshore trade or trading program, trading platform, trading facility, trade slot, high-yield trading or roll program and guaranteed bank note,” the warning said.

“If someone approaches you about investing in a prime bank program, prime world bank financial instrument, or similar high-yield security, it is a scam. These investments do not exist.  Promoters may tell investors that they will receive a return of their principal after a few days or weeks and continue to receive their guaranteed return,” the SEC said.