* Charges unsealed on Wednesday
* Deception alleged over SK's track record, investments
By Jonathan Stempel
NEW YORK, July 30 (Reuters) - Two principals of now-defunct SK Madison Commodities LLC have been criminally charged with fraudulently soliciting more than $1.3 million from investors for their Manhattan-based commodities pool, and pocketing $700,000 for themselves.
Former President Michael James Seward, 35, of Largo, Florida, was charged with commodities fraud, securities fraud, wire fraud and conspiracy. His business partner Yan Kaziyev, 36, of Jamaica, New York, pleaded guilty last month to the same charges and agreed to cooperate with prosecutors.
The charges, which had been previously sealed, were announced on Wednesday by U.S. Attorney Preet Bharara in Manhattan.
Seward is detained in Florida on unrelated state felony charges, Bharara said. A lawyer for Seward could not immediately be located. A federal public defender representing Kaziyev did not immediately respond to a request for comment.
Prosecutors said that from July 2011 to May 2013, the defendants lured investors by inflating their pool's profits and lying about how money would be used, including for a nonexistent investment in an Internet social media company.
When regulators in 2013 began questioning the defendants' withdrawals from SK Madison's accounts, Seward and Kaziyev said the sums reflected "commissions" earned from trades, when in fact the were not, prosecutors said.
"Under the guise of a profitable commodity trading pool and an investment in a social media company, the defendants failed to do anything except steal from those who trusted them," George Venizelos, assistant director in charge of the FBI's New York office, said in a statement.
The U.S. Commodity Futures Trading Commission last month won a default judgment directing SK, Seward and Kaziyev to pay a $2.49 million civil fine and $1.04 million in restitution. More than $500,000 of funds in the pool had been previously frozen.
Each securities fraud and wire fraud charge carries a maximum prison term of 20 years.
The case is U.S. v. Seward, U.S. District Court, Southern District of New York, No. 14-cr-00482. (Reporting by Jonathan Stempel in New York; Editing by Dan Grebler)