The former chief compliance officer of a New Jersey-based private fund is facing Securities and Exchange Commission (SEC) charges for his role in a scheme that allegedly duped investors of more than $73 million.

John Cook is one of three individuals named in the SEC’s complaint filed Thursday, along with credit agency Microbilt and its private fund Princeton Alternative Funding (PAF). Cook was named the CCO and chief operating officer of PAF in March 2016 before being promoted to CEO in January 2018.

When Microbilt CEO Walter Wojciechowski and former CEO Philip Burgess Jr. formed PAF, they hired Cook as CCO despite him not having any experience in alternative lending, according to the SEC. Also appointed was an unnamed CEO with no related experience.

The group relied on the experience of Burgess, who was not long removed from a stint in prison for tax evasion that led to him stepping down as Microbilt’s CEO. He was serving the company as a “consultant,” though the SEC stated he was actively managing PAF behind the scenes.

Investors were not made aware of the involvement of Burgess given his criminal history, according to the SEC. On top of concealing the role of Burgess, Cook and Wojciechowski “knowingly, recklessly, or negligently made and/or disseminated materially false statements to investors and potential investors that misrepresented the management of the Fund,” the agency stated.

This included allegedly misleading investors to believe the fund had “real-time” access to monitoring systems to evaluate consumer finance company lenders and subprime borrowers to reduce risk of loss when it did not. Microbilt also falsely stated it used historical rankings in its selection and screening process for credit lines to consumer finance companies when it had only ranked its clients once in 2014, according to the SEC.

Cook’s role, as detailed in the agency’s complaint, was spreading these misleading assertions in investor presentations and communications. In particular, he was responsible for managing the PAF’s largest investor, which had submitted a redemption request after discovering tax and accounting issues at the fund. Cook allegedly withheld this information from other investors as the fund continued operating.

In total, from March 2015 through February 2017, PAF raised $73 million from 14 investors, the SEC stated.

The SEC is seeking permanent injunctions against all defendants; conduct-based injunctions against Burgess, Wojciechowski, and Cook; and civil money penalties against Microbilt, Burgess, Wojciechowski, and Cook.