The Securities and Exchange Commission has charged an attorney in Florida and two other individuals for their role in a $27.5 million investment scheme.

The scheme had the hallmark of a Ponzi scheme, with investors led to believe they were buying “pre-sold” commodity contracts with a set profit, when actually “returns” were largely taken out of other investors’ capital, the Commission alleges.

The SEC stopped the scheme last year, obtaining an asset freeze and court-appointed receiver over the two companies involved, Commodities Online and Commodities Online Management. The charges announced yesterday are against the founder and former president of the company, James Howard III; its vice president, Louis Gallo III; and Michael Casey, outside counsel and later president of the firm.

The US Attorney’s Office for the Southern District of Florida announced criminal charges against the trio yesterday.

According to a complaint filed in federal court in Miami, Gallo and Howard distributed millions of dollars in investor funds to sham companies, through which they stole the funds for their own use.

Howard also neglected to tell investors in the scheme that he is a convicted felon, the SEC said. He stepped down in 2010 after he was arrested for an unrelated investment fraud, at which point Casey took over the role and misled investors about Howard’s continued control.

“Gallo ran an in-house ‘boiler room’ of telephone sales agents and a network of approximately 20 regional and international sales offices,” the authorities allege. “He failed to disclose to investors that he previously pled guilty to federal bank fraud and other felonies and was serving a term of supervised release while employed at Commodities Online.”

The SEC is seeking disgorgement of ill-gotten gains plus prejudgment interest, financial penalties, and permanent injunctions against Howard, Gallo and Casey. Its complaint names several relief defendants, in an attempt to recover investor money diverted to those entities in the scheme: Sutton Capital, J&W Trading, American Financial Solutions, and Minjo Corporation.