The U.S. Securities and Exchange Commission today filed an emergency action in an alleged prime bank scheme that targeted investors in the Unites States and Canada.

The SEC reports that it filed an emergency action against International Fiduciary Corp. SA, a Virginia-based company, and three individuals, a Virginia man, and two Canadians. The commission alleged that the defendants defrauded over 180 investors in a fraudulent “prime bank” scheme that appears to have raised at least US$18.2 million to date.

The complaint alleges that defendants solicited investors in the Pacific Northwest and BC, including Abbotsford. According to the SEC’s pleadings, investors were requested to, and did, send their investments to a bank in Arlington, Virginia.

The SEC requested permanent injunctions against future violations, disgorgement, prejudgment interest, and civil penalties against all defendants. None of the allegations have been proven.

In response to the SEC’s request for emergency relief, the court entered an order that, among other things, temporarily restrains defendants; freezes investors’ funds wherever they are located and all assets of the defendants; prohibits the defendants from accepting or depositing additional funds from actual or potential investors; requires an immediate accounting; prevents document alteration or destruction; expedites discovery; and requires defendants to repatriate all investor funds into the U.S.

The SEC notes that the B.C. Securities Commission issued a Temporary Order and Notice of Hearing ordering the defendants to cease trading the IFC investments to residents of B.C. back on Nov. 1.

Ethiopis Tafara, the director of the SEC’s Office of International Affairs, said, “The SEC’s investigation of this case was significantly advanced through the assistance of the British Columbia Securities Commission, and our cooperative efforts have resulted in swift legal action to bring down this international prime bank fraud.”

Linda Thomsen, director of the SEC’s Enforcement Division, said, “The SEC will work quickly to stop U.S. issuers who illegally offer or sell purported prime bank instruments, whether their victims reside in the U.S. or abroad.”