Victims of Syed Arbab, a former University of Georgia student who allegedly ran a fake hedge fund out of a frat house, say he took their money by taking advantage of their friendship.

"I really trusted him," Connor Campbell, 22, who has known Arbab since high school, said. "He's someone I never thought would do this."

The U.S. Securities and Exchange Commission filed a six-count civil complaint in a Georgia federal court last week alleging that between May 2018 and May 2019, Arbab sold investments in the hedge fund that never existed and spent some of the funds on liquor, hotels, Uber, gambling and a Las Vegas trip that included a stop at an "adult entertainment club."

Arbab, 22, received at least $269,000 from no less than eight investors and transferred much of the money to his personal bank account, the lawsuit states.

In addition to spending the money for his own benefit, the SEC claims Arbab used funds to make Ponzi payments to prior investors seeking to withdraw some or all of their investment, and "fooled investors into unwittingly sending Ponzi payments directly to other investors" using applications such as Venmo or Cash App.

Campbell, a Michigan resident, says he began investing with Arbab while in college because "[h]e was really good at [investing] ... and when he did it legitimately, he made great investments and a lot of money."

About three months ago, Campbell said, Arbab approached him to invest in a hedge fund he managed.

Campbell said Arbab sent him a portfolio, claimed he was licensed and told him names of "smart people" Campbell knew who invested with Arbab's company.

"I had enough faith at that point to put some money in," Campbell said.

Campbell said he initially invested $5,000, but Arbab convinced him to invest another $1,500. Campbell said Arbab kept giving excuses when he asked for his money back, and has still not returned his money.

"Even though the signs of a Ponzi scheme were there, it never came across my mind that [Arbab] would do something like this."

Richard Best, regional director of the SEC Atlanta office, said the case is an example of someone taking advantage of young investors.

"Many people think that this type of fraud can only happen to individuals with large amount of resources. What this case demonstrates is that it can happen to new investors — people who are coming into the job market and may not necessarily have a lot of resources," Best said. "Taking small amounts of money from people who don't have a lot of resources can be just as damaging because this impacts living expenses, it impacts the ability to pay for education."

Jonathan Swift, 22, says he's known Arbab since middle school and approached Arbab to invest after seeing his social media posts flaunting his wealth.

Swift said the posts, including one in which Arbab claimed he'd bought a Corvette with cash, made him think Arbab "must be legit."

"Especially as a college student, I just want to make a couple dollars," Swift said.

Swift said he was wary of the vague contract with complicated terminology that Arbab had him sign, so he only invested $200, which Swift said "pales in comparison" to the thousands of dollars some others were investing.

"He definitely used our relationship to his advantage," Swift said. "It's clear that he had some type of insecurity that he had going on where he needed that lifestyle to attract more people to him, or something like that. I feel like it's deeper than what he was doing, because he clearly did not need the money. I feel for the guy, but what he did was wrong."

Ultimately, I am not here to defend myself in any manner, only to insert bias to a heavily skewed story. I am here to apologize to investors who believed in me and apologize that my strategies did not work out how it was supposed to. — Syed (@babradeys) June 4, 2019

SEC investigators say Arbab untruthfully portrayed himself as a University of Georgia graduate who was working on a master's degree in business administration. He was a student at the university in Athens, 70 miles east of Atlanta, but had not yet received his undergraduate degree.

"This is classic affinity fraud ... fraudsters use their relationships with a particular group to gain the trust of their victims," Best said. "Here there are two groups: one group is his affiliation with the University of Georgia and the University of Georgia community. The other group is his affiliation with the fraternity and that community. So, in effect, because of his affiliation with those groups, they trusted him."

The lawsuit says Arbab sent text messages that stated his "firm" was "different because we target young investors/college kids" and that investments were "GUARANTEED and backed up to 15,000$." According to the civil complaint, Arbab also falsely claimed the hedge fund earned annual returns that he described as ranging between 22 to 56 percent, and circulated a fictitious spreadsheet to more than 110 investor accounts "to tout the Fund's performance and solicit additional investments."

When asked for comment, Arbab referred NBC News to a statement he tweeted, which said: "I am here to apologize to investors who believed in me and apologize that my strategies did not work out how it was supposed to…I am here to notify that restitution is needed for such mistakes and they will be distributed accordingly.

"The intentions I had were to acquire returns for my investors and grow my company. Unfortunately, it headed the other direction and today I am here to publicly state that I am owning up the the mistake."

The SEC only has authority to file civil litigation. In Arbab's case, the SEC seeks to freeze his assets, prevent him from destroying documents and electronic devices, pay civil penalties and return ill-gotten funds, Best said. However, Arbab could still face criminal investigation by other government entities.

Best said "time will tell" if victims will get their money back.

"We have to see what money is available after Mr. Arbab's expenditures," he said. "Unless he has other resources to pay investors back, they may not get it all back."

The SEC suggests investors check the background and disciplinary history of anyone selling or offering them an investment using Investor.gov.

"When investing, individuals should research not only the product, but also the individual," Best said.