A Washington lawyer has been charged by the U.S. Securities and Exchange Commission with participating in a scheme to bilk would-be investors, then spending their money on items such as Jimmy Choo shoes and a trip to the Bahamas.
Baylor & Jackson name partner Brynee Baylor, 37, and Pennsylvania resident Frank Pavlico III, a convicted felon, are charged with defrauding at least 13 investors out of more than $2 million since August 2010.
According to the SEC, the pair offered investors ”risk-free returns of up to 20 times the original investment within as few as 45 days through the purported ‘lease’ and ‘trading’ of foreign bank instruments in highly complex transactions.”
The SEC says these instruments were fictitious, and that Baylor created phony contracts and legal documents to mask the scheme. She also allegedly provided “attorney attestation” letters vouching for Pavlico (who was using the name Frank Lorenzo to conceal his 2008 money laundering conviction), and his company, The Milan Group.
“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 Cohen, associate director of the SEC’s Division of Enforcement, in a news release. “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 declined comment.
The SEC’s complaint was filed on Nov. 30 in federal court in Washington and unsealed by the court late yesterday. Judge Rosemary Collyer granted the SEC’s request for a temporary restraining order, asset freezes and other emergency relief. The FBI arrested Pavlico on Nov. 29 and charged him with wire fraud.
According to Martindale.com, both Baylor and name partner Dawn Jackson earned their law degrees from Howard University and were admitted to the bar in 2000. Jackson is named as a relief defendant for the purpose of recovering funds paid to Baylor & Jackson.
The SEC action is not Baylor’s only legal trouble - she and Pavlico also face two fraud suits in the Northern District of California.
Baylor was sued for malpractice in 2009 in the Circuit Court for Baltimore City, according to court papers filed by Minnesota Lawyers Mutual Insurance Co., which provided Baylor’s malpractice insurance.
According to Minnesota Lawyers, which argues it had no obligation to defend or indemnify her, Baylor’s client was on the hook for $2.6 million because she attached an unexecuted and unsigned affidavit to a response to a motion for summary judgment. Baylor & Jackson settled with the client for $850,000 in 2010.