The Securities and Exchange Commission charged two former executives of Woodbridge Group of Companies for orchestrating an alleged $1.2 billion Ponzi scheme that the regulator shut down in 2017.

California-based Ivan Acevedo and Dane R. Roseman, former directors of investments at Woodbridge, were charged for their roles in the scheme. The two, along with Woodbridge owner Robert H. Shapiro, were also arrested by criminal authorities. The trio pleaded not guilty in federal court in Los Angeles.

Woodbridge Group of Companies filed for bankruptcy in December 2017 after the SEC froze the assets in its unregistered funds and charged Shapiro for defrauding more than 8,400 investors. In August of last year, the SEC also charged five unregistered brokers for selling more than $243 million in unregistered Woodbridge funds to more than 1,600 retail investors.

In December of last year, the SEC charged 13 individuals from 10 different companies for selling more than $350 million of Woodbridge’s unregistered securities to 4,400 investors. That group included Jordan Goodman, a self-described “media influencer,” who touted Woodbridge without disclosing that he was paid to do so, the SEC said.

The latest SEC action claims that Roseman and Acevedo were paid more than $3 million in commissions and other compensation for raising $1.2 billion from retail investors, many of whom were seniors. Acevedo oversaw that process from 2012 to 2015, when he left the firm and was succeeded by Roseman. The two handled the hiring and training of the sales force and approving allegedly fraudulent marketing materials and sales scripts. They also upheld a false image of the company as a legitimate business, while behind the scenes they were using funds from new investors to pay existing investors, the SEC claims.

“Instead of telling investors the truth — that Woodbridge’s third-party lending business was a sham almost from inception — we allege that Acevedo and Roseman worked diligently to perpetuate this sham by preparing and disseminating false marketing materials to induce more investments, keeping this massive Ponzi scheme afloat,” said Eric I. Bustillo, director of the SEC’s Miami regional office. “The SEC is committed to continue to hold responsible parties accountable in this far-reaching scheme.”