The United States Securities and Exchange Commission has filed charges against a Colorado man who allegedly scammed $17 million from investors by promising big returns on diamonds and bank notes investments.

According to the Los Angeles Times, the court granted the SEC’s request to freeze all assets belonging to Richard Dalton and Universal Consulting Resources. Dalton in believed to be the mastermind behind the diamond Ponzi scheme.

According to court records, Dalton launched the scheme in early 2009, promising investors returns of 120% annually on a diamond fund and 48-60% return on a trading fund. But instead of investing as promised, and in classic Ponzi scheme style, Dalton used new investor money to make monthly interest payments to earlier investors, creating a loyal following of happy investors, the SEC said.

Dozens on investors from 13 states were victimized. Dalton used more than $1 million obtained via the fraudulent diamond and trading funds on personal expenses, buying a house and cars and spending a considerable amount of his daughter's wedding.

“Dalton made his Ponzi scheme falsely appear profitable by continuing to bring in new investor money,” said Donald Hoert, director of the SEC’s Denver office. “Investors should be skeptical when someone promises low risk and high guaranteed returns.”

In addition to the asset freeze, the SEC is seeking an order requiring Dalton to repay the stolen money, plus financial penalties and interest.