A San Francisco hedge fund has been accused of defrauding investors out of millions of dollars, with its CEO and a colleague spending their ill-gotten gains at strip clubs, casinos, and sporting events. So reports CBS 5, which notes that the U.S. Securities and Exchange Commission has accused JSG Capital Investments of what they say amounts to a $9.3 million Ponzi scheme. The two men reportedly sold fake pre-IPO shares of Uber, Airbnb, and Alibaba, before transferring the money into their own personal accounts.

CEO and founder Jason Gill, along with colleague Javier Carlos Rios, reportedly defrauded around 200 investors out of their money — paying out small amounts of cash a bit at a time with new fraud victims' investments.

According to the Department of Justice, both men have been charged with conspiracy to commit wire fraud and wire fraud.

"Gill, 48, of San Diego, Calif., and Rios, 33, of National City, Calif., are alleged to have made false and misleading representations and promises to investors in JSG Capital, including, but not limited to, promises to purchase so-called pre-IPO shares of private companies like Uber Technologies and Airbnb using investor funds," explains the DOJ. "In fact, Gill and Rios are alleged to have fraudulently diverted and stolen investor funds for their own personal use and benefit by, among other things, converting investor funds into cash, transferring investor funds to their own personal bank accounts, and using investor funds for personal expenses like rent, restaurants, nightclubs, hotels, and retail shopping."

Of the $9.3 million they are accused of raising fraudulently, the DOJ press release says they stole "in excess of $5.5 million."

“JSG is a classic investment scam and Ponzi scheme," reads a SEC complaint. "Gill and Rios transferred less than 1 percent of investor funds to JSG Entity brokerage accounts, and no ‘pre-IPO’ company shares were ever purchased."

Gill self-described via LinkedIn as a graduate of the Haas School of Business — a claim which the school denied when asked by CBS 5. Rios, meanwhile, apparently has a professional background in food service.

Both men were arrested in late May, and the cases will likely be heard in San Francisco. If convicted, the two could serve up to 40 years in prison each.

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