(Hedgeco.Net) The Securities and Exchange Commission has filed fraud charges against Gabriel Edelman and his affiliated entities, Creative Advancement LLC and Edelman Blockchain Advisors LLC, for fraudulently raising funds and misappropriating funds from investors.

The SEC’s complaint alleges that, between February 2017 and May 2021, Edelman, through Creative and Edelman Blockchain, entities he controlled, fraudulently offered and sold securities using false and misleading statements to four investors, raising a total of approximately $4.3 million. According to the complaint, the Defendants falsely told investors their funds would be invested in digital assets. However, Edelman allegedly did not follow through on these promises, and in fact, only invested a small portion of investor funds in digital assets, while using a significant amount of investor funds for personal expenses. Also according to the complaint, Edelman made early repayments to some investors in a Ponzi-like fashion in order to encourage further and larger investments.

The SEC’s complaint, filed in federal district court in Manhattan, charges the Defendants with violating 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. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties from the Defendants.