URGENT >> BULLETIN >> MOVING: SEC Says D.C. Attorney Brynee K. Baylor Was Running Prime-Bank Swindle With Frank L. Pavlico III, A Felon On Probation In Case Involving ‘Drug Trafficking’ Proceeds
UPDATED 10:04 A.M. ET (DEC. 8, U.S.A.) Frank L. Pavlico III — convicted in 2007 of felony conspiracy to conduct financial transactions involving the proceeds of drug trafficking and released in 2008 after serving his 10-month prison term — has been arrested for wire fraud by the FBI in an alleged prime-bank swindle that occurred while Pavlico was on probation, the SEC said.
Charged civilly with securities fraud is Brynee K. Baylor, an attorney in the District of Columbia, Maryland and New Jersey. The SEC said Baylor helped Pavlico pull off the swindle, which allegedly gathered about $2.1 million and affected at least 13 investors.
U.S. District Judge Rosemary Collyer of the District of Columbia approved an emergency asset freeze, the SEC said.
“Pavlico and Baylor produced paperwork dotted with legal-sounding gibberish designed to deceive investors into believing this is a highly-sophisticated investment opportunity,” said Stephen L. Cohen, associate director of the SEC’s Division of Enforcement. “This case is particularly egregious because attorneys hold a special position of trust, and Baylor and her law firm cloaked the Milan investment in the guise of licensed legal services to deceive investors and steal their money.”
Baylor, 37, of Silver Spring, Md., is co-founder and managing partner of Baylor & Jackson PLLC in the District of Columbia, according to the SEC. The agency said she and the law firm “acted as ‘counsel’ for Pavlico’s company The Milan Group, vouching for Pavlico and acting as an escrow agent that in reality was merely receiving and diverting the majority of investor funds.”
The Milan Group, which also was known as The Milan Trading Group Inc., operated from Pavlico’s home in Clarks Summit, Pa., the SEC said. Pavlico is 41, the SEC said.
The scheme operated in a shroud of mystery, with inexperienced investors being told about a purported “private trading platform” and that “confidentiality and secrecy requirements prevented the defendants from providing details of the investments,” the SEC charged.
Baylor “deceive[ed] investors into believing that the Milan investment was legitimate and that investors’ funds would be safe,” the SEC charged, adding that she provided notarized “Attorney Attestation” letters to some investors.
Moreover, the SEC charged, Baylor “told investors that she had personally witnessed millions of dollars paid to investors through B&J’s trust account, consistent with Pavlico’s representations.”
Pavlico “deceived investors by using the name ‘Frank Lorenzo’ and by failing to disclose that he pled guilty to a felony, served 10 months in prison, and was on supervised release at the time he was soliciting their investments,” the SEC charged.
Investors were duped by high-sounding terms such as “standby letters of credit” and “bank guarantees,” the SEC said. Meanwhile, “Pavlico and Baylor also provided investors with bogus excuses attempting to explain the delay in providing the promised returns including, among other things, feigned illnesses, false representations that the European bankers supposedly involved in the transaction were on extended vacation, or that there were unspecified problems with processing the transactions through ‘Euroclear,’ a supposed necessary step in the transaction,” the SEC charged.
The scheme began in August 2010 or earlier, the SEC charged. Prison records show Pavlico was released in November 2008. His probation ran through Nov. 5, 2011, according to records.
“Pavlico offered returns of up to twenty times the original investment within forty-five days,” the SEC charged. “Investors were told that the investment involved no risk and that their principal would be returned if a successful bank instrument transaction was not completed.”
Fake “screen shots” also were used to dupe investors, the SEC charged.
Collyer also is presiding over the AdSurfDaily Ponzi case in the District of Columbia. The FBI alleged last month that Collyer was targeted with false liens by Kenneth Wayne Leaming, 55, of Spanaway, Wash.
Read the SEC complaint against Pavlico and Baylor.