SEC v. KAMAL ZUHDI ABDALLAH; ADMINISTRATIVE OUTSOURCE SERVICES, INC.; ZEINA ABDALLAH; and SERIAGA INVESTMENTS, INC., No. 1:17-cv-03117, Southern District of New York (Apr. 28, 2017) — Complaint

Andrew M. Calamari
Sanjay Wadhwa
Gerald Gross
Paul G. Gizzi
Karen M. Lee
Attorneys for the Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
200 Vesey
Stree4 Suite 400
New
York, New York 10281-1022
(212) 336-0077 (Gizzi)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
KAMAL ZUHDI ABDALLAH, alk/a
KAMAL SULLEMAN,
Defendant,
and
ADMINISTRATIVE OUTSOURCE
SERVICES, INC., ZEINA ABDALLAH,
and SERIAGA INVESTMENTS, INC.,
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Relief Defendants. )
COMPLAINT
ECFCASE
Plaintiff Securities and Exchange Commission (the "Commission") alleges the following
against defendant Kamal Zuhdi Abdallah, alk/a Kamal
Sulleman ("Abdallah") ("Defendant"),
and relief defendants Administrative Outsource Services, Inc. ("AOS"), Zeina
Abdallah and

Seriaga Investments, Inc. ("Seriaga") (collectively, the '"Relief Defendants"):
SUMMARY
OF ALLEGATIONS
I. Since August 20
16, Abdallah, a recidivist securities law violator, has defrauded
two elderly investors
of at least $260,000 through the offer and sale of securities. While serving
the supervised release portion
of his criminal sentence in United States v. Abdallah, 09-cr-717
(E.D.N.Y.)
('"United States v. Abdallah"), Abdallah used a fictitious name to hide his criminal
past from one
of his victims, and when soliciting investments, Abdallah lied to his victims
regarding the nature and use
of investment proceeds.
2. Abdallah's first investor ("Investor A") invested $250,000 with Abdallah by
.
transferring (i) $50,000 to Seriaga, a company controlled by Abdallah's 21-year old daughter,
Zeina Abdallah, and (ii) $200,000
to AOS, a company whose bank account is controlled by
Abdallah. Rather than usc the investor funds
to invest in currency trading as he had promised,
Abdallah, instead, made cash withdrawals and otherwise used the investor funds to pay for his
and his family's personal expenses. For example, within days
of receiving the $200,000 from
Investor
A, Abdallah withdrew $189,500, consisting of: a wire transfer of$175,000 to Zeina
Abdallah's personal bank account; a $10,000 check
to Zeina Abdallah; and a $4,500 withdrawal
by Abdallah.
3. Abdallah's second investor ('"Investor B") wrote a $10,000 check to Seriaga on
August
19, 2016, and the day after this check was deposited, Abdallah caused $9,990 to be
transferred
to himself.
4. By this action, the Commission seeks
as to Abdallah, among other things: (i)
permanent injunctive relief, including a specific conduct-based injunction prohibiting Abdallah
from soliciting transactions
in any security; (ii) disgorgement of ill-gotten gains plus
2

prejudgment interest thereon; and (iii) civil monetary penalties. The Commission also seeks as
to the Relief Defendants disgorgement of ill-gotten gains plus prejudgment interest thereon.
VIOLATIONS
5. By virtue of the conduct alleged herein: (a) Defendant, directly or indirectly,
singly or
in concert, has engaged and is  engaging in transactions, acts, practices and courses of
business that constitute violations of Section l7(a) of the Securities Act of 1933 ("'Securities
Act") [15 U.S.C.
§ 77q(a)], and Section lO(b) ofthe Securities Exchange Act of 1934
("Exchange Act") [15 U.S.C.
§ 78j(b)] and Rule lOb-5 thereunder [17 C.F.R. § 240.l0b-5]; and
(b) Relief Defendants received ill-gotten gains under circumstances in which it  is not just,
equitable
or conscionable for them to retain the illegal proceeds.
6. Unless the Defendant is permanently restrained and enjoined, he will again
engage in the transactions,
acts, practices, and courses
of business set forth in this complaint and
in transactions, acts, practices, and courses
of business of similar type and object.
NATURE
OF THE PROCEEDINGS AND RELIEF SOUGHT
7. The Commission brings this action pursuant to authority conferred by Section
20(b)
ofthe Securities Act [15 U.S.C. § 77t(b)], and Section 2l(d)(l) ofthe Exchange Act [15
U.S.C.
§ 78u(d)(l)], seeking to permanently enjoin the Defendant from engaging in the
transactions acts, practices, and courses
of business alleged herein.
8. The Commission seeks a final judgment ordering a conduct-based injunction,
permanently enjoining Defendant from violations
ofthe securities laws provisions that
Defendant violated as alleged in this complaint, ordering Defendant and Relief Defendants to
disgorge their ill-gotten gains and to pay prejudgment interest thereon, and imposing civil money
penalties against Defendant pursuant
to Section 20(d) of the Securities Act (15 U.S.C. § 77t(d)],
3

and Section 21(d)(3) ofthe Exchange Act [15 U.S.C. § 78u(d)(3)].
JURISDICTION AND VENUE
9. This Court has jurisdiction over this action pursuant to 28 U .S.C. § 1331, Sections
20(b), 20(d) and 22(a)
of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), 77v(a)], and Sections
2l{d),
2l(e), and 27 ofthe Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
to. Venue is proper in this district pursuant to 28 U.S.C. § 139I(b)(2), Section 22(a)
of the Securities Act [15 U.S.C. § 77v(a)], and Section 27 of the Exchange Act [15 U.S.C. §
78aa]. Certain of the events constituting or giving rise to the alleged violations occurred in the
Southern District
ofNew York. For instance, investor funds were wired to financial accounts
located in this District.
11.
In connection with the conduct alleged in this complaint, the Defendant, directly
or indirectly, has made use
ofthe means or instruments of transportation or communication in,
and the means or instrumentalities of, interstate commerce, or
of the mails, or of the facilities of
a national securities exchange.
DEFENDANT
12. Abdallah, age 52, is a recidivist securities law violator. From March 2005 to
November
2008, Abdallah served as CEO and President
of Universal Property Development and
Acquisition Corporation ("UPDV"), a publicly traded company. Between October 2008 and July
2009, Abdallah and a former registered representative participated in a fraudulent scheme to
manipulate the price
ofUPDV stock. On August 7, 2009, Abdallah was arrested and charged
with securities and wire fraud
in United States v. Abdallah. After his conviction, on January 6,
2012, Abdallah was sentenced
to 42 months in prison, followed by three years of supervised
release, and ordered to pay criminal restitution of$224,072.18. On August
13, 2009, the
4

Commission filed an amended complaint in SEC v. Seiden, et a/., 09-cv-3116 (KAM)
(E.D.N.Y.), adding Abdallah as a defendant and alleging violations
of the anti-fraud provisions.
On March 30, 2012, the court entered a final judgment on consent against Abdallah, which
imposed an injunction prohibiting further violations
of the anti-fraud provisions, a penny stock
bar, an officer and director bar, and ordered disgorgement
of approximately $195,000, deemed
satisfied
by the criminal restitution order. On January 25, 2017, Abdallah filed a petition for
Chapter 7 bankruptcy
in the United States Bankruptcy Court for the Western District of Texas.
In re Kamal Zuhdi Abdallah, 17-50173 (Bankr. W.O. Tex.). In his bankruptcy petition, Abdallah
did not disclose any income from his current fraud or any ownership interest in AOS
or Seriaga.
His petition also did not disclose the two fraud victims as his creditors.
RELIEF DEFENDANTS
13. AOS, a Florida corporation located in Wellington, Florida, was organized in
2007. According
to AOS's bank account documents, AOS provides waste management and
remediation services.
14. Seriaga is  a Texas corporation organized in 2014 and located in Abdallah and
Zeina Abdallah's San Antonio residence. At all relevant times, Zeina Abdallah controlled
Seriaga's bank account, and she was listed
as Seriaga's Vice-President on Seriaga's bank
account opening documents. Seriaga is not registered with the Commission
or any State.
15. Zeina Abdallah, age 21 and Abdallah's daughter, is  a resident of San Antonio,
Texas.
She resides
in Abdallah's home. In Abdallah's bankruptcy petition, Zeina Abdallah is
listed as one
of Abdallah's dependents. Abdallah's bankruptcy petition disclosed that Zeina
Abdallah paid $5,000 for Abdallah's bankruptcy attorney.
5

THE DEFENDANT'S FRAUD
A. Investor A
16. In 2016, while serving the supervised release portion of his criminal sentence in
United States v. Abdallah, Abdallah met Investor A, a 74-year old woman who has limited
investment experience. At all relevant times, Abdallah falsely represented himselfto her as
"Kamal Sulleman," using this fictitious name to hide his criminal past. Thereafter, he sold her
$250,000 worth
of securities. Abdallah asked that Investor A invest her money with him trading
foreign currencies. Abdallah told investor A that Seriaga was his currency trading business and
he had traded currencies since he was
16 years old. Abdallah also promised Investor A a
guaranteed return
of the principal amount ofher investment and that they would split the trading
profits.
17. On August 15, 20 16, Abdallah, posing as the fictitious Kamal Sulleman,
accompanied Investor A to the San Antonio branch office
of her broker-dealer ('"Institution A")
and talked
to her brokerage account representative about liquidating mutual funds to finance a
$50,000 investment. Abdallah introduced himself as Kamal Sulleman
to the Institution A
representative and provided a business card, which listed his name as Kamal Sulleman and
identified his association with Seriaga. The term "FOREX" appeared prominently on the front
and back
of the business card, along with several symbols representing foreign currencies.
18. After the meeting, Abdallah instructed Investor A to provide him with a cashier's
check payable
to Seriaga, a company controlled by Abdallah's daughter, Zeina Abdallah,
representing Investor
A's $50,000 investment.
19. On August 19, 2016, Investor A gave Abdallah the $50,000 cashier's check
payable to Seriaga.
6

20. By November 2016, Abdallah solicited Investor A to invest another $200,000 to
trade currencies and promised her a high rate
of return. Investor A then attempted to transfer
$200,000 from her brokerage account
to her checking account, but the transfer was delayed by
Institution A.
21. On November 10, 2016, Abdallah, again posing as the fictitious Kamal Sulleman,
accompanied Investor A
to Institution A and talked with five Institution A staff members.
22. Abdallah identified himself to the Institution A staff as Kamal Sulleman and said
that he was Investor
A's "money manager." When the Institution A staff asked Abdallah about
Seriaga, its lack
of registration, its currency trading operation, and how it could generate returns
sufficient to pay Investor A the 24% interest that he had promised, Abdallah acknowledged that
his investment system promised to pay Investor A a return
of 2% per month on her investment,
but he refused to provide further details, claiming that such information was proprietary.
23. On December I, 2016, Abdallah executed in favor
of Investor A a one-page
promissory note for
$250,000, paying interest
of $5,000 per month with a one-year term. The
note does not describe Abdallah's purported investment system to trade foreign currencies, nor
does
it describe that Investor A would share in the profits from Abdallah's trading.
24. Prior to executing the note, Abdallah told Investor A that he understood that this
promissory note did not accurately describe her investment, and that he did not want the
document
to accurately describe the investment because he was not licensed to accept
investments.
25. On December 2, 2016, Investor A wrote a $200,000 check from her checking
account
to AOS. This check was deposited into AOS's bank account that same day.
26. Three days later, on December 5, 2016, Abdallah caused AOS to send a $175,000
7

wire to Zeina Abdallah's personal bank account at Institution B. Also on December 5, 2016,
Abdallah wrote a $10,000 AOS check payable to Seriaga. On December 9, 2016, Abdallah
withdrew $4,500 from the AOS account.
27. Investor
A's $200,000 investment was not used to trade currencies or invest in
any other investment system.
28. Investor
A's earlier $50,000 investment was not used to trade currencies or
invested in any other investment system. Rather, the funds were withdrawn, for example, to pay
credit card bills and as cash withdrawals.
29. Between August 19,2016 and December
5, 2016, a total of$75,035.79 was
withdrawn, consisting of$27,961 in cash withdrawals, $16,234.79
in credit card payments,
$15,000 paid
to Zeina Abdallah, and $15,840 paid to Abdallah
30. One month later, when Abdallah filed for bankruptcy, he did not list as a debt the
$250,000 from Investor
A, nor did he list any debt obligation to her. In his bankruptcy petition,
he listed only $100 in gross income tbr 2016 and denied any interest in any business-related
property.
31.
Since December
2016, Abdallah verbally solicited Investor A for another
$200,000 investment with a promise that she would receive $10,000 per month and could receive
a return
of her principal with three days of notice.
32. Investor A asked that Abdallah return all
of her investment monies, but he has not
done so.
B. Investor B
33. In September 2016, the month after receiving Investor A's first investment,
Abdallah verbally solicited a $10,000 investment from Investor B, a 73-year old resident
of San
8

Antonio, Texas. Abdallah said that he profitably traded foreign currencies. Abdallah asked to
borrow
$1 0,000 at 18 percent interest from Investor B.
34. Investor B understood that, if Abdallah profited from trading foreign currencies,
then Investor B would receive a return
of principal with interest.
35. On September
19, 2016, Investor B invested $10,000 with Abdallah, and that
amount was deposited into
Seriaga's bank account that day.
36. Also on September 19, 2016, Abdallah executed in favor
of Investor B a one-page
promissory note for $10,000, at
18 percent annual interest, with principal and interest due
annually. The note does not describe Abdallah's purported plan to trade foreign currencies, nor
does it describe that repayment was based on the profitability
of Abdallah's trading.
37. The very next day, September 20, 2016, Abdallah caused $9,990 to
be transferred
to himself.
38. When Abdallah filed for bankruptcy, he did not list as a debt the $10,000
promissory note to Investor
B, nor did he list any debt obligation to Investor B.
FIRST CLAIM FOR RELIEF
Violations of Section 17(a) of the Securities Act
(Defendant)
39. The Commission realleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through 38
of this complaint.
40. From around August 2016 through the present, Defendant, directly
or indirectly,
singly or in concert, by use of the means or instruments of transportation or communication in
interstate commerce,
or of the mails, in the offer or sale of securities, has: (a) employed, and is
employing, devices, schemes and artifices to defraud; (b) obtained, and is obtaining, money
or
property by means of untrue statements of material fact, or has omitted, and is omitting, to state
9

material facts necessary in order to make statements made, in light of the circumstances under
which they were made, not misleading; and (c) engaged, and is engaging, in transactions,
practices and courses
of business which operate or would operate as a  fraud or deceit upon the
purchaser
of securities.
41. By reason
of foregoing, Defendant, directly or indirectly, singly or in concert, has
violated, is violating, and unless enjoined, will continue to violate
Section 17(a)
of the Securities
Act [15 U.S.C.
§ 77q(a)].
SECOND CLAIM FOR RELIEF
Violation of Section 1 O(b) of the Exchange Act and Rule 1 Ob-5
(Defendant)
42.
The Commission realleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through 38
of this complaint.
43. From around August
2016 through the present, Defendant, directly
or indirectly,
singly
or in concert, by use of the means or instrumentalities of interstate commerce, or of the
mails,
or of the facilities of a national securities exchange, in connection with the purchase or
sale of securities, has: (a) employed, and is employing, devices, schemes and artifices to defraud;
(b) made, and is  making, untrue statements
of material fact, or has omitted, and is omitting, to
state material facts necessary in order to make statements made, in light
of the circumstances
under which they were made, not misleading; and (c) engaged, and is engaging, in acts, practices
and courses
of business which operate or would have operated as a fraud or deceit upon any
person.
44. By reason
ofthe foregoing, Defendant, directly or indirectly, singly or in concert,
has violated, is  violating, and unless enjoined, will continue to violate, Section
1 O(b) of the
Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
10

THIRD CLAIM FOR RELIEF
(Relief Defendants)
45. The Commission realleges and incorporates by reference herein each and every
allegation contained in paragraphs I through 38
of this complaint.
46. Relief Defendants obtained substantial illicit profits as a result
of the fraudulent
conduct
of Defendant.
47. Relief Defendants were the recipients of such ill-gotten gains under circumstances
in which it is not just, equitable or conscionable for them to retain the illegal proceeds.
Consequently, Relief Defendants have been named for the amount
of such proceeds by which
they have been unjustly enriched as a result
of the fraudulent conduct described in this
complaint.
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court grant the following
relief:
I.
A Final Judgment permanently restraining and enjoining Abdallah, his agents, servants,
employees and attorneys and all persons
in active concert or participation with him, who receive
actual notice
of the injunction by personal service or otherwise, and each of them, from future
violations
of Section 17(a) of the Securities Act [ 15 U.S.C. § 77q(a)].
II.
A Final Judgment permanently restraining and enjoining Abdallah, his agents, servants,
employees and attorneys and all persons
in active concert or participation with him, who receive
actual notice
of the injunction by personal service or otherwise, and each of them, from future
violations
of Section IO(b) ofthe Exchange Act [15 U.S.C. § 78j(b)] and Rule lOb-5 thereunder
ll

[17 C.F.R. § 240.10b-5].
III.
A Final Judgment permanently restraining and enjoining Abdallah from soliciting
transactions in any security.
IV.
A Final Judgment ordering Defendant and Relief Defendants to disgorge their ill-gotten
gains, plus prejudgment interest, and such other and further amount as the Court may find
appropriate.
v.
A Final Judgment ordering Abdallah to pay civil money penalties pursuant to Section
20(d)
of the Securities Act [15 U.S.C. § 77t(d)] and Section 2l(d)(3) of the Exchange Act [15
U.S.C.
§ 78u(d)(3)].
12

VI.
Such other and further relief as this Court deems just and proper.
Dated: April~2017
New York, New York
13
Q£6<-.. -
Andrew M. Calamari
Sanjay Wadhwa
Gerald Gross
Paul
G. Gi7.zi
Ka
ren M. Lee
SEC
URITIES AND EXCHANGE
COMMISSI
ON
New York Regional Office
200 Vesey Street, Suite 400
New York, New York I 0281-1022
(212)
336-1 I 00
Attorneys
for the Plaintiff

Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 1 of 13 

Andrew M. Calamari 
Sanjay Wadhwa 
Gerald Gross 
Paul G. Gizzi 
Karen M. Lee 
Attorneys for the Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
200 Vesey Stree4 Suite 400 
New York, New York 10281-1022 
(212) 336-0077 (Gizzi) 

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

v. 

KAMAL ZUHDI ABDALLAH, alk/a 
KAMAL SULLEMAN, 

Defendant, 

and 

ADMINISTRATIVE OUTSOURCE 
SERVICES, INC., ZEINA ABDALLAH, 
and SERIAGA INVESTMENTS, INC., 

) 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 

Relief Defendants. ) 

COMPLAINT 

ECFCASE 

Plaintiff Securities and Exchange Commission (the "Commission") alleges the following 

against defendant Kamal Zuhdi Abdallah, alk/a Kamal Sulleman ("Abdallah") ("Defendant"), 

and relief defendants Administrative Outsource Services, Inc. ("AOS"), Zeina Abdallah and 



Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 2 of 13 

Seriaga Investments, Inc. ("Seriaga") (collectively, the '"Relief Defendants"): 

SUMMARY OF ALLEGATIONS 

I. Since August 20 16, Abdallah, a recidivist securities law violator, has defrauded 

two elderly investors of at least $260,000 through the offer and sale of securities. While serving 

the supervised release portion of his criminal sentence in United States v. Abdallah, 09-cr-717 

(E.D.N.Y.) ('"United States v. Abdallah"), Abdallah used a fictitious name to hide his criminal 

past from one of his victims, and when soliciting investments, Abdallah lied to his victims 

regarding the nature and use of investment proceeds. 

2. Abdallah's first investor ("Investor A") invested $250,000 with Abdallah by 

. 
transferring (i) $50,000 to Seriaga, a company controlled by Abdallah's 21-year old daughter, 

Zeina Abdallah, and (ii) $200,000 to AOS, a company whose bank account is controlled by 

Abdallah. Rather than usc the investor funds to invest in currency trading as he had promised, 

Abdallah, instead, made cash withdrawals and otherwise used the investor funds to pay for his 

and his family's personal expenses. For example, within days of receiving the $200,000 from 

Investor A, Abdallah withdrew $189,500, consisting of: a wire transfer of$175,000 to Zeina 

Abdallah's personal bank account; a $10,000 check to Zeina Abdallah; and a $4,500 withdrawal 

by Abdallah. 

3. Abdallah's second investor ('"Investor B") wrote a $10,000 check to Seriaga on 

August 19, 2016, and the day after this check was deposited, Abdallah caused $9,990 to be 

transferred to himself. 

4. By this action, the Commission seeks as to Abdallah, among other things: (i) 

permanent injunctive relief, including a specific conduct-based injunction prohibiting Abdallah 

from soliciting transactions in any security; (ii) disgorgement of ill-gotten gains plus 

2 



Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 3 of 13 

prejudgment interest thereon; and (iii) civil monetary penalties. The Commission also seeks as 

to the Relief Defendants disgorgement of ill-gotten gains plus prejudgment interest thereon. 

VIOLATIONS 

5. By virtue of the conduct alleged herein: (a) Defendant, directly or indirectly, 

singly or in concert, has engaged and is engaging in transactions, acts, practices and courses of 

business that constitute violations of Section l7(a) of the Securities Act of 1933 ("'Securities 

Act") [15 U.S.C. § 77q(a)], and Section lO(b) ofthe Securities Exchange Act of 1934 

("Exchange Act") [15 U.S.C. § 78j(b)] and Rule lOb-5 thereunder [17 C.F.R. § 240.l0b-5]; and 

(b) Relief Defendants received ill-gotten gains under circumstances in which it is not just, 

equitable or conscionable for them to retain the illegal proceeds. 

6. Unless the Defendant is permanently restrained and enjoined, he will again 

engage in the transactions, acts, practices, and courses of business set forth in this complaint and 

in transactions, acts, practices, and courses of business of similar type and object. 

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

7. The Commission brings this action pursuant to authority conferred by Section 

20(b) ofthe Securities Act [15 U.S.C. § 77t(b)], and Section 2l(d)(l) ofthe Exchange Act [15 

U.S.C. § 78u(d)(l)], seeking to permanently enjoin the Defendant from engaging in the 

transactions acts, practices, and courses of business alleged herein. 

8. The Commission seeks a final judgment ordering a conduct-based injunction, 

permanently enjoining Defendant from violations ofthe securities laws provisions that 

Defendant violated as alleged in this complaint, ordering Defendant and Relief Defendants to 

disgorge their ill-gotten gains and to pay prejudgment interest thereon, and imposing civil money 

penalties against Defendant pursuant to Section 20(d) of the Securities Act (15 U.S.C. § 77t(d)], 

3 



Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 4 of 13 

and Section 21(d)(3) ofthe Exchange Act [15 U.S.C. § 78u(d)(3)]. 

JURISDICTION AND VENUE 

9. This Court has jurisdiction over this action pursuant to 28 U .S.C. § 1331, Sections 

20(b), 20(d) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), 77v(a)], and Sections 

2l{d), 2l(e), and 27 ofthe Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

to. Venue is proper in this district pursuant to 28 U.S.C. § 139I(b)(2), Section 22(a) 

of the Securities Act [15 U.S.C. § 77v(a)], and Section 27 of the Exchange Act [15 U.S.C. § 

78aa]. Certain of the events constituting or giving rise to the alleged violations occurred in the 

Southern District ofNew York. For instance, investor funds were wired to financial accounts 

located in this District. 

11. In connection with the conduct alleged in this complaint, the Defendant, directly 

or indirectly, has made use ofthe means or instruments of transportation or communication in, 

and the means or instrumentalities of, interstate commerce, or of the mails, or of the facilities of 

a national securities exchange. 

DEFENDANT 

12. Abdallah, age 52, is a recidivist securities law violator. From March 2005 to 

November 2008, Abdallah served as CEO and President of Universal Property Development and 

Acquisition Corporation ("UPDV"), a publicly traded company. Between October 2008 and July 

2009, Abdallah and a former registered representative participated in a fraudulent scheme to 

manipulate the price ofUPDV stock. On August 7, 2009, Abdallah was arrested and charged 

with securities and wire fraud in United States v. Abdallah. After his conviction, on January 6, 

2012, Abdallah was sentenced to 42 months in prison, followed by three years of supervised 

release, and ordered to pay criminal restitution of$224,072.18. On August 13, 2009, the 

4 



Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 5 of 13 

Commission filed an amended complaint in SEC v. Seiden, et a/., 09-cv-3116 (KAM) 

(E.D.N.Y.), adding Abdallah as a defendant and alleging violations of the anti-fraud provisions. 

On March 30, 2012, the court entered a final judgment on consent against Abdallah, which 

imposed an injunction prohibiting further violations of the anti-fraud provisions, a penny stock 

bar, an officer and director bar, and ordered disgorgement of approximately $195,000, deemed 

satisfied by the criminal restitution order. On January 25, 2017, Abdallah filed a petition for 

Chapter 7 bankruptcy in the United States Bankruptcy Court for the Western District of Texas. 

In re Kamal Zuhdi Abdallah, 17-50173 (Bankr. W.O. Tex.). In his bankruptcy petition, Abdallah 

did not disclose any income from his current fraud or any ownership interest in AOS or Seriaga. 

His petition also did not disclose the two fraud victims as his creditors. 

RELIEF DEFENDANTS 

13. AOS, a Florida corporation located in Wellington, Florida, was organized in 

2007. According to AOS's bank account documents, AOS provides waste management and 

remediation services. 

14. Seriaga is a Texas corporation organized in 2014 and located in Abdallah and 

Zeina Abdallah's San Antonio residence. At all relevant times, Zeina Abdallah controlled 

Seriaga's bank account, and she was listed as Seriaga's Vice-President on Seriaga's bank 

account opening documents. Seriaga is not registered with the Commission or any State. 

15. Zeina Abdallah, age 21 and Abdallah's daughter, is a resident of San Antonio, 

Texas. She resides in Abdallah's home. In Abdallah's bankruptcy petition, Zeina Abdallah is 

listed as one of Abdallah's dependents. Abdallah's bankruptcy petition disclosed that Zeina 

Abdallah paid $5,000 for Abdallah's bankruptcy attorney. 

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Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 6 of 13 

THE DEFENDANT'S FRAUD 

A. Investor A 

16. In 2016, while serving the supervised release portion of his criminal sentence in 

United States v. Abdallah, Abdallah met Investor A, a 74-year old woman who has limited 

investment experience. At all relevant times, Abdallah falsely represented himselfto her as 

"Kamal Sulleman," using this fictitious name to hide his criminal past. Thereafter, he sold her 

$250,000 worth of securities. Abdallah asked that Investor A invest her money with him trading 

foreign currencies. Abdallah told investor A that Seriaga was his currency trading business and 

he had traded currencies since he was 16 years old. Abdallah also promised Investor A a 

guaranteed return of the principal amount ofher investment and that they would split the trading 

profits. 

17. On August 15, 20 16, Abdallah, posing as the fictitious Kamal Sulleman, 

accompanied Investor A to the San Antonio branch office of her broker-dealer ('"Institution A") 

and talked to her brokerage account representative about liquidating mutual funds to finance a 

$50,000 investment. Abdallah introduced himself as Kamal Sulleman to the Institution A 

representative and provided a business card, which listed his name as Kamal Sulleman and 

identified his association with Seriaga. The term "FOREX" appeared prominently on the front 

and back of the business card, along with several symbols representing foreign currencies. 

18. After the meeting, Abdallah instructed Investor A to provide him with a cashier's 

check payable to Seriaga, a company controlled by Abdallah's daughter, Zeina Abdallah, 

representing Investor A's $50,000 investment. 

19. On August 19, 2016, Investor A gave Abdallah the $50,000 cashier's check 

payable to Seriaga. 

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Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 7 of 13 

20. By November 2016, Abdallah solicited Investor A to invest another $200,000 to 

trade currencies and promised her a high rate of return. Investor A then attempted to transfer 

$200,000 from her brokerage account to her checking account, but the transfer was delayed by 

Institution A. 

21. On November 10, 2016, Abdallah, again posing as the fictitious Kamal Sulleman, 

accompanied Investor A to Institution A and talked with five Institution A staff members. 

22. Abdallah identified himself to the Institution A staff as Kamal Sulleman and said 

that he was Investor A's "money manager." When the Institution A staff asked Abdallah about 

Seriaga, its lack of registration, its currency trading operation, and how it could generate returns 

sufficient to pay Investor A the 24% interest that he had promised, Abdallah acknowledged that 

his investment system promised to pay Investor A a return of 2% per month on her investment, 

but he refused to provide further details, claiming that such information was proprietary. 

23. On December I, 2016, Abdallah executed in favor of Investor A a one-page 

promissory note for $250,000, paying interest of $5,000 per month with a one-year term. The 

note does not describe Abdallah's purported investment system to trade foreign currencies, nor 

does it describe that Investor A would share in the profits from Abdallah's trading. 

24. Prior to executing the note, Abdallah told Investor A that he understood that this 

promissory note did not accurately describe her investment, and that he did not want the 

document to accurately describe the investment because he was not licensed to accept 

investments. 

25. On December 2, 2016, Investor A wrote a $200,000 check from her checking 

account to AOS. This check was deposited into AOS's bank account that same day. 

26. Three days later, on December 5, 2016, Abdallah caused AOS to send a $175,000 

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Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 8 of 13 

wire to Zeina Abdallah's personal bank account at Institution B. Also on December 5, 2016, 

Abdallah wrote a $10,000 AOS check payable to Seriaga. On December 9, 2016, Abdallah 

withdrew $4,500 from the AOS account. 

27. Investor A's $200,000 investment was not used to trade currencies or invest in 

any other investment system. 

28. Investor A's earlier $50,000 investment was not used to trade currencies or 

invested in any other investment system. Rather, the funds were withdrawn, for example, to pay 

credit card bills and as cash withdrawals. 

29. Between August 19,2016 and December 5, 2016, a total of$75,035.79 was 

withdrawn, consisting of$27,961 in cash withdrawals, $16,234.79 in credit card payments, 

$15,000 paid to Zeina Abdallah, and $15,840 paid to Abdallah 

30. One month later, when Abdallah filed for bankruptcy, he did not list as a debt the 

$250,000 from Investor A, nor did he list any debt obligation to her. In his bankruptcy petition, 

he listed only $100 in gross income tbr 2016 and denied any interest in any business-related 

property. 

31. Since December 2016, Abdallah verbally solicited Investor A for another 

$200,000 investment with a promise that she would receive $10,000 per month and could receive 

a return of her principal with three days of notice. 

32. Investor A asked that Abdallah return all of her investment monies, but he has not 

done so. 

B. Investor B 

33. In September 2016, the month after receiving Investor A's first investment, 

Abdallah verbally solicited a $10,000 investment from Investor B, a 73-year old resident of San 

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Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 9 of 13 

Antonio, Texas. Abdallah said that he profitably traded foreign currencies. Abdallah asked to 

borrow $1 0,000 at 18 percent interest from Investor B. 

34. Investor B understood that, if Abdallah profited from trading foreign currencies, 

then Investor B would receive a return of principal with interest. 

35. On September 19, 2016, Investor B invested $10,000 with Abdallah, and that 

amount was deposited into Seriaga's bank account that day. 

36. Also on September 19, 2016, Abdallah executed in favor of Investor B a one-page 

promissory note for $10,000, at 18 percent annual interest, with principal and interest due 

annually. The note does not describe Abdallah's purported plan to trade foreign currencies, nor 

does it describe that repayment was based on the profitability of Abdallah's trading. 

37. The very next day, September 20, 2016, Abdallah caused $9,990 to be transferred 

to himself. 

38. When Abdallah filed for bankruptcy, he did not list as a debt the $10,000 

promissory note to Investor B, nor did he list any debt obligation to Investor B. 

FIRST CLAIM FOR RELIEF 
Violations of Section 17(a) of the Securities Act 

(Defendant) 

39. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 38 of this complaint. 

40. From around August 2016 through the present, Defendant, directly or indirectly, 

singly or in concert, by use of the means or instruments of transportation or communication in 

interstate commerce, or of the mails, in the offer or sale of securities, has: (a) employed, and is 

employing, devices, schemes and artifices to defraud; (b) obtained, and is obtaining, money or 

property by means of untrue statements of material fact, or has omitted, and is omitting, to state 

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Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 10 of 13 

material facts necessary in order to make statements made, in light of the circumstances under 

which they were made, not misleading; and (c) engaged, and is engaging, in transactions, 

practices and courses of business which operate or would operate as a fraud or deceit upon the 

purchaser of securities. 

41. By reason of foregoing, Defendant, directly or indirectly, singly or in concert, has 

violated, is violating, and unless enjoined, will continue to violate Section 17(a) of the Securities 

Act [15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Violation of Section 1 O(b) of the Exchange Act and Rule 1 Ob-5 

(Defendant) 

42. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 38 of this complaint. 

43. From around August 2016 through the present, Defendant, directly or indirectly, 

singly or in concert, by use of the means or instrumentalities of interstate commerce, or of the 

mails, or of the facilities of a national securities exchange, in connection with the purchase or 

sale of securities, has: (a) employed, and is employing, devices, schemes and artifices to defraud; 

(b) made, and is making, untrue statements of material fact, or has omitted, and is omitting, to 

state material facts necessary in order to make statements made, in light of the circumstances 

under which they were made, not misleading; and (c) engaged, and is engaging, in acts, practices 

and courses of business which operate or would have operated as a fraud or deceit upon any 

person. 

44. By reason ofthe foregoing, Defendant, directly or indirectly, singly or in concert, 

has violated, is violating, and unless enjoined, will continue to violate, Section 1 O(b) of the 

Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

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Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 11 of 13 

THIRD CLAIM FOR RELIEF 
(Relief Defendants) 

45. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs I through 38 of this complaint. 

46. Relief Defendants obtained substantial illicit profits as a result of the fraudulent 

conduct of Defendant. 

47. Relief Defendants were the recipients of such ill-gotten gains under circumstances 

in which it is not just, equitable or conscionable for them to retain the illegal proceeds. 

Consequently, Relief Defendants have been named for the amount of such proceeds by which 

they have been unjustly enriched as a result of the fraudulent conduct described in this 

complaint. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court grant the following 

relief: 

I. 

A Final Judgment permanently restraining and enjoining Abdallah, his agents, servants, 

employees and attorneys and all persons in active concert or participation with him, who receive 

actual notice of the injunction by personal service or otherwise, and each of them, from future 

violations of Section 17(a) of the Securities Act [ 15 U.S.C. § 77q(a)]. 

II. 

A Final Judgment permanently restraining and enjoining Abdallah, his agents, servants, 

employees and attorneys and all persons in active concert or participation with him, who receive 

actual notice of the injunction by personal service or otherwise, and each of them, from future 

violations of Section IO(b) ofthe Exchange Act [15 U.S.C. § 78j(b)] and Rule lOb-5 thereunder 

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Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 12 of 13 

[17 C.F.R. § 240.10b-5]. 

III. 

A Final Judgment permanently restraining and enjoining Abdallah from soliciting 

transactions in any security. 

IV. 

A Final Judgment ordering Defendant and Relief Defendants to disgorge their ill-gotten 

gains, plus prejudgment interest, and such other and further amount as the Court may find 

appropriate. 

v. 

A Final Judgment ordering Abdallah to pay civil money penalties pursuant to Section 

20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 2l(d)(3) of the Exchange Act [15 

U.S.C. § 78u(d)(3)]. 

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Case 1:17-cv-03117 Document 1 Filed 04/28/17 Page 13 of 13 

VI. 

Such other and further relief as this Court deems just and proper. 

Dated: April ~2017 
New York, New York 

13 

Q£6 <-.. -
Andrew M. Calamari 
Sanjay Wadhwa 
Gerald Gross 
Paul G. Gi7.zi 
Karen M. Lee 

SECURITIES AND EXCHANGE 
COMM ISS ION 

New York Regional Office 
200 Vesey Street, Suite 400 
New York, New York I 0281 -1022 
(212) 336-1 I 00 
Attorneys for the Plaintiff