The scheme involved the sale of phony promissory notes to investors, including many who were retired or unsophisticated. Fixed income and other side investments were also utilized. The SEC alleges Venetis told some investors the promissory notes were guaranteed by the Federal Deposit Insurance Corporation and would earn interest of approximately 6 percent to 11 percent per year that would be tax-free because of a loophole in the tax code. She also told investors that she would use their money to fund loans to doctors that would be backed by Medicare reimbursements.

Instead, she looted the funds to pay business and personal debts and funneled cash to her relatives and that the funds were not invested and Venetis fabricated the names and signatures of doctors or forged signatures of people she said were loan recipients.

The SEC also named Jennifer Venetis, her daughter, Kevin Persley, her brother, and Venetis LLC, and entity owned and controlled by Sandra Venetis, as relief defendants.

Venetis and the entities agreed to settle charges. The terms include a court order enjoining them from further violations of the securities laws, payment of disgorgement of ill-gotten gain along with prejudgment interest and financial penalties. An accounting of funds and their uses will be made and an independent monitor appointed. The amount of monetary relief will be determined later.

Venetis and Systematic Financial Associates Inc. will also be barred from associating with any investment adviser or broker or dealer, and the firm's registration was revoked.