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On June 4, 2019, the Securities and Exchange Commission charged Peter Baker, of Lawrenceville, Georgia, and Elizabeth Oharriz, of Miami Shores, Florida, and their companies with orchestrating a prime bank investment scheme and stealing over $2.2 million from investors.

The SEC’s complaint alleges that, from 2013 through 2017, Baker and Oharriz engaged in a scheme to sell fictitious prime bank instruments that raised over $2.3 million from unwitting investors. According to the SEC’s complaint, Baker and Oharriz allegedly falsely told investors that their funds would be used to obtain instruments issued by well-known commercial banks and promised investors astronomical profits. The SEC further alleges that Baker and Oharriz falsely promised investors that they would return any advance payments the investors made if Baker and Oharriz could not secure these instruments. Contrary to their representations, however, Baker and Oharriz allegedly misappropriated substantially all of the funds invested, using them for their own personal expenses or transferring them to third parties. As alleged in the SEC’s complaint, to prevent investors from uncovering their fraud, Baker and Oharriz gave investors fabricated bank instruments and other supporting documents.

The SEC’s complaint charges Baker, Oharriz, and their companies, Prestige Global Trading, Ltd., Diversified Initiatives Consulting & Logistics, Inc., and Sienna Business Group, Inc., with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder and Baker and Oharriz with also violating the broker-dealer registration provisions of Section 15(a) of the Exchange Act. The SEC seeks permanent injunctions, disgorgement plus prejudgment interest, and civil penalties. Oharriz, Sienna, and Diversified have agreed to a bifurcated settlement where they will be permanently enjoined from violations of the charged provisions. Monetary relief will be determined by the court upon motion of the SEC. The settlement is subject to court approval.

The SEC’s investigation is led by Christina McGill and Matthew B. Reisig, with assistance from Richard G. Lill, and is supervised by Timothy England and Melissa Hodgman. The litigation will be led by Melissa Armstrong.

For more information regarding the dangers of prime bank schemes and tips on how to avoid them, see the “Investor Alert: ‘Prime Bank’ Investments Are Scams.”