A former Wisconsin-based registered representative and investment advisor swindled nearly $2.4 million from 26 of his mostly elderly retail brokerage customers and investment advisory clients, according to the Securities and Exchange Commission.

The SEC said that between April 2013 and March 2019, Edward E. Matthes, 49, of Pewaukee, Wis., worked as a registered representative and investment advisor representative with Mutual of Omaha Investor Services, dually registered with the commission as a broker-dealer and investment advisor.

The complaint said Matthes lied to his customers and clients about a supposedly safe fixed investment offering offered by Mutual of Omaha. He said it would earn a guaranteed minimum yield of 4% per year. He then persuaded his customers and clients to transfer approximately $1.4 million to him to fund the purported investment, which did not exist.

The complaint further said Matthes allegedly stole an additional $1 million from his brokerage customers by making unauthorized sales and withdrawals from his customers' variable annuities. The complaint said he spent the misappropriated funds on personal expenses, including home renovation expenses, car payments and luxury items.

To keep the scheme alive, Matthes allegedly created fake account statements and paid approximately $170,000 in Ponzi-like payments, the complaint said.

But the fraud was uncovered in March 2019, when one of Matthes’s customers complained to the Financial Industry Regulatory Authority about an account statement that appeared to be fake. After Finra contacted Mutual of Omaha regarding the account statement, the company conducted an internal review, which included unannounced visits to Matthes’s office on March 11 and 12, the complaint said.

He was found to have diverted customer and client funds to his personal bank account and created fictitious account statements for multiple customers and clients. He was terminated on March 12, 2019, the complaint said.

The SEC's complaint, filed in federal district court in the Eastern District of Wisconsin, charges Matthes with violating antifraud provisions of the securities laws.

Without admitting to or denying the allegations in the complaint, Matthes consented to the entry of a judgment that permanently enjoins him from violating the charged provisions and orders him to pay disgorgement, prejudgment interest and penalties in amounts to be determined by the court at a later date.

The SEC said Matthes has agreed to settle the SEC's charges, with monetary relief to be determined by the court at a later date.