The SEC alleges that Kushner and La Mancha raised approximately USD10.5 million from investors through a series of “LLCs” for the purpose of investing in short-term loans made to, among others, sports agents and professional athletes, including current and former NFL players. However, Kushner and La Mancha allegedly made material misrepresentations to the investors about what would be done with the investors’ funds, secretly taking hundreds of thousands of dollars in undisclosed “fees” for themselves out of the intended loan proceeds.

Then, says the SEC, the defendants also misappropriated nearly USD1.5 million of loan repayments that, according to the terms of the LLC operating agreements, were supposed to go back to the investors. Kushner used those and other misappropriated funds, including the undisclosed fees, to pay personal expenses, such as payments for personal credit card bills, college tuition, country club dues, a luxury vacation, a Mercedes Benz, and a rental home in the Hamptons.

"We allege [that] Kushner lied to investors and simply stole the money that would have given them at least some of the investment returns he had promised,” said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office."

Criminal charges have been laid against Kushner by the District Attorney for New York County.