The Securities and Exchange Commission reported Thursday a charge on Los Angeles resident Bruce Friedman, for his companies, the LA-based Diversified Lending Group, Inc. and the Applied Equities, Inc. for securities fraud, obtaining an emergency court order to freeze all related assets and halt an ongoing fraudulent investment scheme.

Raising at least $216 million from hundreds of investors across the United States, most of whom were senior citizens. High returns were promised through investment in real estate related functions — rather, though, funds were diverted to supporting a more gregarious lifestyle for Friedman, consuming luxuriously.

“Investors were lured into this alleged scheme based on misrepresentations about the true nature of the securities and the defendants’ business, our emergency action today demonstrates that the SEC will act aggressively in fraud situations like this to preserve assets for investors,” said Rosalind Tyson, Regional Director for the Los Angeles faculty of the S.E.C.

“However, the SEC’s complaint alleges that Friedman and his companies did not invest DLG investor proceeds as represented. Instead, they diverted a substantial amount of investor money to undisclosed business ventures unrelated to real property or mortgage lending, including Friedman’s charitable foundation and businesses operated by affiliates and Friedman’s family members and friends. Friedman and his companies only recently changed their written disclosure to mention these additional business ventures to DLG investors, even though DLG investors had financed them for years. Friedman also misappropriated substantial investor money for his own personal purposes,” said the press release.

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