The managing partner of an investment firm that specializes in trade-finance lending was charged with carrying out what the U.S. described as a Ponzi scheme of more than US$100 million based on overvalued loans and faked assets.

David Hu, of International Investment Group, was arrested Friday in New York and accused of covering up his plot for more than 10 years with falsified paperwork and fake entities.

“David Hu directed a multimillion-dollar, years-long scheme to defraud investors,” Acting U.S. Attorney Audrey Strauss said in a press release. “Putting profit ahead of his fiduciary duties, Hu allegedly mismarked millions of dollars of loan assets to cover up millions in losses.”

Hu’s lawyer, Barry Bohrer, didn’t immediately return an email seeking comment. Hu, 62, appeared in court on Friday and was released on a US$500,000 bond.

Hu and an unidentified co-conspirator founded International Investment Group in 1994. The firm specialized in providing financing to small and medium-sized exporters and importers operating in Central and South America, according to the government.

The company agreed to pay US$35 million in March to settle fraud charges brought by the U.S. Securities and Exchange Commission.

Hu, who lives in West Orange, New Jersey, cheated investors by overvaluing distressed loans held by the funds and falsifying documents to create fake loans that were portrayed as performing positively, the U.S. said.

He conspired to sell the loans to a trust and to new funds created by the firm, and then used the proceeds to pay off earlier investors, they said.

Prosecutors didn’t specify the number of victims of the alleged fraud.

The case is U.S. v Hu, U.S. District Court, Southern District of New York (Manhattan).