The Securities and Exchange Commission said it effected an "emergency asset freeze" against a 'purported fund manager' based in the U.S. Virgin Islands.

The federal regulator charged Daniel Spitzer of St. Thomas with fraud in the conduct of what it said was a $105 million Ponzi scheme.

The SEC alleged Spitzer used several entities and sales agents to misrepresent to investors that their money would be invested in foreign currency. Investors were "falsely told that Spitzer’s funds had never lost money and historically produced profitable annual returns that one year reached over 180 percent,'' the SEC said.

Spitzer instead used money raised from new investors to pay earlier investors, and misappropriated investor funds to pay unrelated business expenses. Phony documents led investors to believe their investments were growing in value, the SEC said.

The SEC said it obtained an emergency court order freezing the assets of Spitzer and his companies.

“Daniel Spitzer ran an elaborate Ponzi scheme that he disguised by moving investor money through a complex network of foreign bank and brokerage accounts,” said Merri Jo Gillette, director of the SEC’s Chicago Regional Office. “He deceived investors into believing that he was using a sophisticated investment strategy that didn’t really exist.”

According to the SEC’s complaint filed in U.S. District Court for the Northern District of Illinois, Spitzer took money from 400 investors, beginning in 2004. He only invested approximately $30 million of the more than $105 million he raised from investors. Of that, about $13.5 million was invest through an offshore entity via a bank account in the Netherlands Antilles and lost money. Spitzer used another $16 million to invest in money market funds that earned only a few thousand dollars. Spitzer liquidated these investments as well, the SEC said.

According to the SEC’s complaint, Spitzer’s scheme is on the verge of collapse, as he has attempted to delay and avoid paying investor redemptions.