(HedgeCo.Net) The Securities and Exchange Commission has obtained a consent judgment against Chicago resident Zvi Feiner and his company FNR Healthcare, LLC for operating a fraudulent scheme that targeted investors in the Orthodox Jewish community in the Chicago area.

The SEC’s complaint, filed on September 19, 2019, alleged that Feiner, FNR, and Feiner’s partner, Erez Baver, raised more than $10 million from at least 62 investors to acquire nursing homes and assisted living facilities throughout the Midwest. According to the complaint, the defendants falsely told investors that the investments were low-risk and would generate high returns, and also misappropriated investor funds to pay distributions to earlier investors and for their personal use. The complaint also named Feiner’s company Netzach Investments LLC and Baver’s company Cedarbrook Management, Inc. as relief defendants for the purposes of recovering investor funds that those companies received from the fraud.

On June 24, 2020, the U.S. District Court for the Northern District of Illinois entered a judgment that permanently enjoins Feiner and FNR from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations in the complaint, Feiner, FNR, and Netzach consented to entry of the judgment ordering them to pay disgorgement and prejudgment interest. Baver and Cedarbrook previously settled the SEC’s charges by agreeing to permanent injunctive relief and to pay a total of $2,253,734 in disgorgement and prejudgment interest. The amounts of disgorgement and prejudgment interest to be paid by all defendants and relief defendants, together with the appropriateness and amounts of any civil penalties imposed against Feiner, FNR, and Baver, will be determined by the court upon motion by the SEC.