A New York hedge fund advisor used investors’ funds to pay for a luxury car, to settle a foreclosure on his home and other personal expenses, the SEC alleged in a civil suit filed today.

Vineet Kalucha, chief investment officer of Aphelion Fund Management, was charged with siphoning off some of the $1.5 million raised from investors in 2013 until March of 2014 for his personal expenses. The firm, Kalucha and George Palathinkal, the chief financial officer of the firm, are also accused of distributing falsified performance results to prospective investors and for overstating the firm’s assets.

(All charges against Palathinkal were dismissed after this article was originally published.)

Aphelion's assets have been frozen by a U.S. District Court judge and the executives have been ordered to not solicit any new investors or any more money from existing investors.

In addition to using investor funds for himself, Kalucha altered an outside audit firm’s report reviewing the performance of an investment account he managed to show a 30 percent increase when in fact there was a 3 percent loss, the SEC says. Palathinkal allegedly knew about the false report and let it get distributed to prospective investors.

According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York, Aphelion serves as the investment advisor and general partner for two unregistered hedge funds, Aphelion US Fund LP and Aphelion Offshore Fund Ltd. 

Kalucha and Palathinkal told investors during 2013 that Aphelion had $15 million or more in assets under management when the firm never had more than $5 million in assets under management at any point during that year, according to the lawsuit.

Kalucha also failed to report that he and Aphelion are prohibited from acting as investment advisors to many types of common retirement plans because of a Department of Labor case against them.