WASHINGTON--The Securities and Exchange Commission said yesterday that it has charged Jay Deutchman with running an alleged Ponzi scheme involving municipal unit trusts that extracted more than $3.5 million from investors.

Deutchman, who was based in Mahopac, N.Y., offered the securities through a corporation called Cencom Systems Inc. The SEC said Deutchman's whereabouts are unknown and he has apparently absconded with the investors' money.

The commission's civil complaint charges that beginning in at least 1986 and continuing through at least 1993 Deutchman "offered and sold more than $3.5 million in nonexempt, unregistered securities to more than 20 victims in a classic Ponzi scheme."

The SEC has accused Deutchman of violating Sections 5 and 17 of the Securities Act of 1933, Sections 10(b) and 15(a)(1) of the Securities and Exchange Act of 1934, and the 1934 act's Rule 10b-5.

Deutchman allegedly induced investors to place their money in "Muni Unit Trusts," that purported to be interests in pools of municipal bonds bought and sold by Deutchman, according to the complaint, filed in the U.S. District Court for the Southern District of New York.

"In fact, Deutchman did not invest in municipal bonds for the victims' benefit," the complaint alleges. "Instead, Deutchman misappropriated his victims' money for his personal use and to perpetuate his scheme by lulling the victims with periodic interest payments."

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