BOSTON (Reuters) - Federal prosecutors on Wednesday accused the manager of a Boston-based hedge fund of defrauding investors out of millions of dollars, nearly two months after state regulators charged him with engaging in a Ponzi-like scheme.

Raymond Montoya, who operated Boston-based hedge fund RMA Strategic Opportunity Fund LLC, exits the federal courthouse in Boston, Massachusetts, U.S. on Wednesday, August 2, 2017. REUTERS/Nate Raymond

According to a criminal complaint filed in Boston federal court, Raymond Montoya, who operated RMA Strategic Opportunity Fund LLC, misused millions of dollars to pay for luxury vehicles and his son’s home mortgage and to repay earlier investors.

Massachusetts Secretary of State William Galvin accused Montoya in June of engaging in an “egregious fraud” and brought an administrative complaint against him.

Galvin’s office said at the time it was also making federal authorities aware of the case. Four days after Galvin brought charges, Montoya met with law enforcement and admitted to defrauding RMA investors, the criminal complaint said.

His lawyer, Christopher Bruno, said the 69-year-old resident of Allston, Massachusetts was cooperating with authorities and surrendered to face the criminal charges on Wednesday morning. Bruno said Montoya was also in plea talks.

“His efforts are focused on preserving assets for ultimate return to investors,” Bruno said in a statement.

During a court hearing, Assistant U.S. Attorney Neil Gallagher said Montoya had already agreed to freeze accounts he controlled holding $6 million to $8 million in assets and forfeit 10 vehicles including three Ferraris and two Porsches.

According to the complaint, Montoya had run RMA since 2009 and told investors it had about $4 billion in assets under management and used proprietary software that helped it predict stock price movements and was achieving positive results.

In fact, Montoya managed less than $100 million, invested only a portion of his victims’ money and fabricated account statements for the fund, which was incurring losses by 2012, the complaint said.

During his June interview with authorities, Montoya said that losses by 2015 and 2016 had become substantial but he nonetheless told investors they were earning modest returns, the complaint said.

It said Montoya also admitted that he used investor funds to make payments to earlier investors as well as to pay for personal expenses including travel, vehicles, tuition for his children and his son’s mortgage.

Montoya was released on a $100,000 bond following a court hearing on Wednesday afternoon.

The case is U.S. v. Montoya, U.S. District Court, District of Massachusetts, No. 17-mj-2228.

(This story corrects spelling of Allston, Mass. in paragraph 5)