The US Securities and Exchange Commission (SEC) has charged Florida-based Titanium Capital LLC and its founder Henry Abdo with operating a Ponzi scheme that raised at least $5.3m from more than 160 retail investors in the US and other parts of the world. The SEC also charged Titanium representative Carol Ann Barsh for her role soliciting investors.

According to the SEC's complaint, since 2014, Abdo and Titanium falsely claimed that Titanium invested investor funds in a "Multi Currency Investment Fund" backed by a proprietary currency exchange and that the investment had never had a monthly loss and generated large returns for investors, including up to 102 percent compounded interest for a five-year investment. In recruiting investors, Titanium and Abdo allegedly claimed that Titanium was registered with and closely examined by the SEC.

However, according to the SEC's complaint, neither Titanium nor the offer or sale of its securities is registered with the SEC, and there is no evidence that a proprietary currency exchange exists.

According to the complaint, Abdo and Titanium used virtually all investor funds to make Ponzi-style payments to earlier investors, pay related parties, and divert funds for Abdo's personal use on items such as jewelry and casino visits. The SEC also alleges that Barsh promoted and sold Titanium's securities to investors without proper registration or pursuant to an exemption from registration.

"As alleged in our complaint, Abdo and Titanium falsely told investors that Titanium was registered with and closely examined by the SEC. Abdo and Titanium allegedly used these and other fraudulent means to provide false comfort to investors while Abdo used investor funds for his globetrotting and personal enjoyment," said Carolyn M. Welshhans, associate director in the SEC's Division of Enforcement. "Today's action unveils Abdo's and Titanium's alleged duplicity and seeks to hold them accountable for deceiving investors."

The SEC's complaint, filed in US District Court for the Southern District of Florida, charges Titanium and Abdo with violating the antifraud provisions and, along with Barsh, the registration provisions of the federal securities laws. The complaint seeks injunctive relief, disgorgement, and civil penalties against Titanium, Abdo, and Barsh and a permanent bar against participating in future securities offerings and an officer and director bar against Abdo.

The complaint also names as relief defendants, and seeks disgorgement from, Abdo's relative, Elias Halim Abdo, and Abdo's wife, Ganna Migulina.

In a parallel action, the US Attorney's Office for the Southern District of Florida on 14 December announced criminal charges against Abdo.