The U.S. Securities and Exchange Commission received an emergency court order to shut down an alleged Ponzi scheme targeting retirees in California and Illinois it says took in $20 million with only $900,000 currently in the possession of the alleged perpetrators.

In a 15-page complaint alleging violations of federal securities law, the SEC accuses USA Retirement Management Services (USARMS) and its managing partners, Francois E. Durmaz and Robert C. Pribilski, of mass-mailing promotional materials to prospective investors. The materials included an invitation to estate planning seminars held at country clubs and banquet halls, encouraging interested parties to contact them for a personal consultation.

During these follow-up meetings, the USARMS would gain retirees’ confidence and portray themselves as educated and experienced in foreign investments specifically tailored to the needs of seniors, the SEC said. Durmaz and Pribilski pitched what they represented as safe, guaranteed investments in “Turkish Eurobonds, offered through the purchase of USARMS promissory notes resulting in annual returns between 8% and 11%, according to the complaint.

The SEC said the alleged scheme raised at least $20 million from more than 120 investors, but never invested the money in the Eurobonds as promised. Instead, returns were paid to earlier investors with funds received from new investors meeting the definition of a Ponzi scheme.

The two are accused of misusing investor funds to finance their other businesses and for personal expenses including luxury automobiles, homes, vacations and web-based pornography, the SEC said. They also allegedly wired $7.2 million in investor funds into bank accounts belonging to three individuals living in Turkey and two companies named as relief defendants in the court order.

As of Dec. 31, 2009, the SEC said of the $20 million of USARMS promissory notes purchased by investors, only $900,000 remains in the financial accounts controlled by the defendants named in the court order.

Rosalind R. Tyson, director of the SEC’s Los Angeles Regional Office, said Durmaz and Pribilski used the estate planning seminars to “lure retirees into investing in a classic Ponzi scheme,” according to a statement.

USARMS and its securities are not registered with the SEC, according to the federal agency. The company has offices in Los Angeles and Irvine, Calif., and Oakbrook Terrace, Ill.

Durmaz, 39, who has homes in Los Angeles and Streamwood, Ill., and Pribilski, 51, of Lisle, Ill., are not registered with the SEC in any capacity and do not hold any securities licenses, according to the SEC.

The agency said Durmaz has not been associated with a registered entity since July 2002, when he was terminated from New York Life Securities Inc. for failing to timely repay a debt against his commission ledger and his apparent delinquency in paying two third-party suppliers for services rendered.  In 2009, he consented to a $250 fine by Illinois regulators for not responding to a letter requesting information about his sale of securities.