The Securities and Exchange Commission has charged a Connecticut advisor and the two troubled registered investment advisor firms he controlled with conducting a fraudulent scheme that misappropriated at least $4.1 million to fund a lavish Greenwich, Conn., lifestyle.

Between October 2014 and the present, Jeffrey Arsenault, 62, and two investment advisor firms he founded and controlled, Old Greenwich Capital Advisors and OGCP Management Co., misappropriated the assets of two private funds the defendants advised and controlled to pay for Arsenault’s personal expenses and making unauthorized payments for the defendants’ benefits, according to the SEC’s complaint, filed in the U.S. District Court for the District of Connecticut.

“To conceal their misappropriation from investors, the defendants falsely overstated the value of the funds’ investments in investor account statements and tax documents, including by falsely claiming that one of the private funds defendants controlled held substantial investments in the other private fund under their control even after the latter fund had ceased operating,” the SEC said in the filing.

Arsenault and the firms tried, in part, “to cover up the missing assets caused by their misappropriation by falsely claiming the missing money had been reinvested in the related Four Seasons Fund even after the Four Seasons Fund had ceased to operate,” the SEC’s complaint states.

The defendants “knew that the OGCP Fund account statements and related tax documents were false and misleading because they knew they were diverting money away from the funds," the complaint said.

Defendants also misled investors into believing losses were attributable to bad investments instead of their own misappropriation, the SEC alleged.

The SEC is seeking a civil monetary penalty against Arsenault and the firms, an injunction that would bar Arsenault from directly or indirectly acting as or being associated with any broker, dealer, or investment adviser and disgorgement of ill-gotten gains. By the SEC’s accounting, only $400,000 remains in the OGCP Fund.

Arsenault’s money woes allegedly began during the stock market crash in the fall of 2008, when the OGCP Fund lost about 14% in October and 30% for the year.

“Soon afterwards Arsenault split with his business partner, who took substantial investors and assets with him," the SEC said. This professional split came on the heels of Arsenault’s divorce, according to the complaint. The state of Connecticut filed three tax liens against Arsenault and his house between 2010 and 2023 and his mortgage companies began foreclosure in 2023 for nonpayment.

“Throughout this period, Arsenault continued to manage the OGCP Fund, even though its assets under management were relatively limited and he was unable to attract significant amounts of new investment or numbers of investors. The OGCP entities continued to advertise on the OGCP website, tout Arsenault’s experience, and identify him as the Chief Investment Officer of the OGCP investment management firm," the SEC said.

While Arsenault was entitled to 1.5% in management fees from the OGCP fund, “the fees generated were not enough to cover the personal and business expenses Arsenault incurred. Arsenault misappropriated investor money from the OGCP Fund, and later from the Four Seasons Fund. He used the stolen money to pay his family’s expenses, for his lifestyle in Greenwich, Connecticut, and for other business opportunities he pursued,” the SEC said.

Calls to Arsenault and the two RIAs were not immediately returned.

According to the firms’ website, Old Greenwich Capital Partners (OGCP) is an alternative asset management firm founded in 2005, based in Greenwich, with offices in Europe, Latin America, and Asia. The firm boasts that it offers institutional and qualified investors “a la carte access to direct investment opportunities,” including private equity, venture capital, hedge fund investments and real estate.

“Since 2021, we closed over $400 (million) in secondary transactions,” the firm’s website states. Neither Old Greenwich Capital Partners or OGCP Management is currently registered with the SEC.

Arsenault has been associated with 16 different registered broker-dealers since 1980 and is still registered with J. Alden Associates, Wayne, Pa., according to his BrokerCheck report. J. Alden Associates did not respond to a request for comment.