A private fund manager and his Atlanta-based investment advisory firm have been charged by the Securities and Exchange Commission for defrauding approximately 200 investors out of $17 million in a Ponzi-like scam.

The SEC is seeking an emergency court order to freeze the assets of Angelo A. Alleca, 42, Buffalo, and Atlanta-based Summit Wealth Management Inc. and prevent further investor losses. The SEC has filed a complaint charging  Alleca, Summit Wealth Management, and the three funds with violations of the antifraud provisions of the federal securities laws.

According to the SEC's complaint filed late Tuesday in federal court in Atlanta, Alleca and Summit Wealth Management offered and sold interests in Summit Fund, which they told their clients was operating as a fund-of-funds -- meaning they were investing their money in other funds and investment products rather than directly in stocks and other securities.

The fund-of-funds investment strategy is intended to diversify investor money and minimize exposure to risks. However, Alleca instead engaged in active securities trading with his clients' money, and he incurred substantial losses, the SEC says. He concealed the Summit Fund trading losses from investors and provided them false account statements, the SEC added.

The SEC alleges that when it came time to meet redemption requests from Summit Fund investors, Alleca created at least two hedge funds to raise money from Summit Wealth clients -- Private Credit Opportunities Fund LLC and Asset Class Diversification Fund LP.

Alleca's plan was to cover up the losses that he had incurred in Summit Fund by illegally transferring profits from the new funds in a Ponzi-like fashion in order to meet earlier redemption requests, the SEC says. However, the plan backfired when those successive funds incurred further trading losses, and Alleca continued to issue false account statements to investors in Summit Fund as well as the additional funds in order to hide the actual losses on their investments, says the SEC.