The Securities and Exchange Commission on Wednesday said it froze the assets of a $345 million investment fund, alleging that it was a Ponzi scheme that used money from hundreds of investors across the United States to fund lavish lifestyles.

An SEC complaint unsealed Tuesday, Sept. 18, alleged that the three — Kevin B. Merrill, Jay B. Ledford and Cameron Jezierski — attracted investors to their scheme by promising profits from buying and selling consumer debt portfolios, starting in January 2013.

But in fact, they used a "web of lies, fabricated documents, and forged signatures in an elaborate scheme to entice investors and perpetuate the fraud," the SEC said in a press release. Rather than buying and servicing debt portfolios as promised, the three used funds from new investors to make payments to earlier investors.

The SEC also alleged that Merrill and Ledford stole at least $85 million of the investor funds to maintain lavish lifestyles, spending millions of dollars on luxury items, including $10.2 million on at least 25 high-end cars, $330,000 for a 7-carat diamond ring, $168,000 for a 23-carat diamond bracelet, millions of dollars on luxury homes, and $100,000 to a private fitness club.

"We allege that the defendants engaged in a brazen fraud, deceiving investors to perpetuate their wrongdoing and line their pockets with ill-gotten gains," said Kelly L. Gibson, associate regional director of the SEC's Philadelphia regional office, which filed the complaint.

"Investors should be warned that low-risk, high-return investments that never lose should be a red flag," she added.

In a parallel case, the U.S. Attorney's Office for the District of Maryland also announced criminal charges against Merrill, 53, of Towson, Md.; Ledford, 54, of Westlake, Tex., and Las Vegas, Nev.; and Jezierski, 28, of Fort Worth, Texas.

The SEC's complaint, filed on Sept. 13 in federal district court in Maryland, charges Merrill, Ledford, and Jezierski, along with their investment entities, Global Credit Recovery LLC, Delmarva Capital LLC, Rhino Capital Holdings LLC, Rhino Capital Group LLC, DeVille Asset Management LTD, and Riverwalk Financial Corp., with violations of federal securities laws.

The SEC won an asset freeze, temporary restraining order, and the appointment of a receiver. The SEC's ongoing investigation is being conducted by Norman P. Ostrove, Dustin E. Ruta, and Scott A. Thompson in the Philadelphia Regional Office and supervised by Gibson.

If you believe you may have been a victim, or have information concerning these charges, email the SEC office at Philadelphia@sec.gov or call 215-597-3100. In addition, victims can complete a questionnaire at www.fbi.gov/MerrillLedford or email Merrillledford@fbi.gov.