A Delaware mortgage loan officer ran a Ponzi scheme that bilked more than $1.69 million out of investors who thought they were investing in a “highly successful” mortgage business, the Securities and Exchange Commission and the Delaware Department of Justice claim in new legal filings.

The SEC announced this week that it is charging Matthew Krimm and Krimm Financial Services, the company Krimm owned, with fraudulently inducing at least 25 investors to invest more than $1.69 million with Krimm and KFS in an unregistered offering of promissory notes.

Among the investors allegedly taken by Krimm are mortgage loan customers of his former employer.

In its complaint, the SEC alleges that Krimm and Krimm Financial Services falsely claimed that they owned and operated their own “highly successful” mortgage loan business.

The SEC also alleges that Krimm and his company lied to investors about the profitability of the company by providing the investors with “misleading offering documents, false income statements and false revenue and profit projections.”

According to the SEC complaint, Krimm falsely claimed that the money raises from investors would be used to expand Krimm Financial Services’ mortgage business, including opening new offices, hiring new loan officers and expanding its reverse mortgage lending business.

But, according to the complaint, Krimm and Krimm Financial Services actually did not operate a mortgage lending business of their own, and they allegedly used more than 75% of the money from new investors to pay Krimm's personal expenses and to pay back prior investors to maintain the appearance that Krimm Financial was profitable.

The Delaware Department of Justice was more blunt in its assessment of the situation, stating that Krimm was allegedly running a "Ponzi scheme," where he repaid his early investors with funds from later investors.

For his participation in the alleged Ponzi scheme, the state of Delaware filed a 25-count charge against Krimm, including charges of racketeering and securities fraud.

The Delaware indictment also charges Krimm with eight counts of felony theft, eight counts of securities fraud and eight counts of selling unregistered securities.