The University of Georgia campus in Athens, Ga. (Collegiate Images/Getty Images)

This article has been updated.

In the fall of 2018, a 25-year-old South Carolina woman decided that she wanted to start investing some of the money she was making as a pharmacist. Her brother, an undergraduate at the University of Georgia, knew just the guy: Syed Arham Arbab, a stock-market whiz who had been making amazing returns for other students on campus through the hedge fund he ran out of his room at the Phi Kappa Tau fraternity house.

In texts that the woman later provided to the Securities and Exchange Commission, Arbab told her the hedge fund he ran was different. Artis Proficio Capital targeted young people and college kids, he wrote, and offered lower-than-average fees. Up to $15,000 of her money would be guaranteed, and she could pull out at any time with two weeks’ notice.

“Just let me know if you’re not interested so I don’t keep bothering you with this!” he wrote, touting an investor list composed of “students, University of Georgia faculty, and local restaurant/bar owners.”

She decided to give it a try. Between October 2018 and April 2019, she invested a total of $45,745 with Arbab, according to her sworn affidavit. The last $20,000 she sent him was supposed to be returned with 8 percent interest in less than two weeks. But instead, she received a wire transfer for $10. Later, she received two more payments to her Cash App account, which still added up to only $600.

She wasn’t the only one to get conned, according to court records. One Georgia graduate said in an affidavit that he had invested more than $100,000 that he planned to use as a down payment on a home and to purchase football tickets, and received only a small fraction of it back. A childhood friend who lost the comparatively small sum of $200 told NBC News he had seen Arbab’s flashy social media posts about buying a Corvette with cash and figured his investment strategies “must be legit.”

The SEC is now accusing Arbab, 22, of running a Ponzi scheme out of his frat house, and using his Georgia connections to persuade students, recent graduates and their family members to invest in a hedge fund that never existed. In a civil complaint filed in the U.S. District Court for the Middle District of Georgia last week, the SEC’s attorneys allege that he defrauded at least eight investors, who gave him $269,000 between May 2018 and May 2019.

Arbab spent “substantial portions” of that money on liquor, hotels, nightclubs, Uber rides, gambling trips and visiting an “adult entertainment” club, court records say. He allegedly spent more than $10,000 and withdrew another $10,000 in cash during the three trips that he took to Las Vegas. He also transferred money to his own personal brokerage account, where his trading losses topped $300,000 by the time TD Ameritrade shut it down in March.

A Michigan native studying cellular biology and genetics, Arbab allegedly dispensed investment advice through a group text-message chain and told people he managed more than $2 million in assets for more than 100 investors through his fictitious company, Artis Proficio Capital. He also claimed to be an MBA student at the university’s Terry College of Business, which was untrue — he hadn’t even finished his undergraduate degree at the time, the SEC says. (Georgia officials confirmed that Arbab graduated in May and had never been enrolled in the MBA program. The school says it cooperated fully with the SEC’s investigation.)

In conversations with would-be investors, Arbab promised unusually high rates of return that ranged between 22 to 56 percent, the SEC alleges. After handing over their money, they could log in to his website and monitor how their investment was doing. But the numbers they saw were “completely fabricated,” according to the complaint.

“There was no hedge fund, and thus, the claimed performance returns were fictitious,” the SEC’s attorneys wrote. “He had no way of guaranteeing any of the invested funds, and he never invested the funds as he represented he would.”

Arbab also sent around a spreadsheet to all his investors every week, which purported to list how many people had invested in his hedge fund so far and how much their money had grown. The list eventually grew to include more than 100 accounts, which the SEC’s attorneys say indicates that there may be more victims than the eight they have identified.

As is typical for Ponzi schemes, some people did get their money back but at others’ expense. Arbab “deceived new investors into unwittingly sending all or a portion of their investments directly to prior investors,” the SEC’s attorneys wrote. In one instance, Arbab allegedly directed a high school friend to send his money to the hedge fund’s “fintech manager” over Venmo. The recipient, it turned out, was the Georgia graduate who was owed more than $100,000 that he had planned to use for a down payment.

“I really trusted him,” Connor Campbell, another high school friend of Arbab’s, told NBC News. The signs of a Ponzi scheme were all there, he said, but Arbab was “someone I never thought would do this.”

According to the complaint, Arbab “repeatedly lied” while giving sworn testimony to the SEC’s attorneys in April. He claimed that his personal brokerage account had about $200,000 in it when he checked it the previous week, when in fact it had been closed nearly a month earlier with a balance of approximately $350. He also claimed he was no longer soliciting money from investors but then allegedly continued to try to raise money for his nonexistent hedge fund a month after his testimony.

In a statement he posted to Twitter on Tuesday, Arbab apologized and promised to make restitution, while arguing that the media had “misconstrued” his college activities and that he had truly worked hard to build up a business and deliver returns for investors.

“Unfortunately, it headed the other direction and today I am here to publicly state that I am owning up the the mistake,” he wrote. “I started this company from working jobs such as tutoring......cleaning bathrooms, serving, bartending, and cooking all while pursuing my degrees. If anything is said about me from this day forth, I am kindly asking for laziness to not be one of the adjectives used to describe my character.”

A federal judge ordered Arbab’s assets frozen on Wednesday, the Atlanta Journal-Constitution reported. The SEC’s civil complaint charges that he violated federal securities laws and seeks to have him return any ill-gotten gains, with interest, and pay unspecified civil penalties. Arbab’s attorney, Robert Loventhal, told the paper that they were “working diligently with the SEC to resolve the issues.”

Meanwhile, Phi Kappa Tau’s leadership say they have suspended Arbab from the fraternity, and would have kicked him out of the frat house if they had known about the SEC’s complaint before he graduated in May and moved out.

"The decisions made by Arbab do not represent the values of Phi Kappa Tau,” the fraternity’s CEO, Tim Hudson, said in a statement.