A Danville man is facing civil and criminal charges in federal court for allegedly defrauding 500 investors of $80 million in a Ponzi scheme and using the money to pay the mortgage on his multimillion-dollar home, authorities said Tuesday.

Peter C. Son, 37, along with Jin K. Chung, 46, of Los Altos, bilked Korean American victims by promising them extraordinarily high annual returns - up to 36 percent - from foreign currency trading, according to a suit filed Tuesday by the Securities and Exchange Commission in U.S. District Court in San Francisco.

Son also is facing separate criminal charges for the alleged scheme, but details of the investigation by the FBI remained under seal Tuesday. Son appeared Monday in U.S. District Court in Oakland. He is being held without bail at a downtown Oakland jail.

Son's attorney, John Feiner, was not available for comment Tuesday.

Instead of trading investors' money, the two men used the funds to pay cash "returns" to certain investors in a "Ponzi-like fashion" from 2003 to 2008, the SEC said. Son also misappropriated money for his personal use, including paying the mortgage on his $2.6 million home in Blackhawk and paying for his homeowner's association dues and country-club dues, the suit said.

The alleged victims are from California, four other states, South Korea and Taiwan, the SEC said.

Marc Fagel, director of the SEC's San Francisco regional office, said the men actively sought the people they ultimately victimized.

"They placed ads in Korean-language newspapers and used sales agents to target Korean Americans in typical affinity fraud fashion as they preyed on the trust within close-knit communities," Fagel said.

The SEC said Son and Chung operated their scheme through SNC Asset Management Inc. of Pleasanton and SNC Investments Inc. of New York.

Son and Chung promised investors annual returns of as much as 36 percent from foreign currency trading and dummied up monthly account statements "purporting to show substantial trading returns," the SEC's suit said. The two told investors that SNC Asset Management had generated 50 percent profits from such trading each year since 2003, authorities said.

In October, the men ceased the companies' operations without warning investors, the SEC said. Chung drained the companies' bank accounts, transferring investor funds to accounts they controlled overseas, the suit said.

In a separate action, the Commodity Futures Trading Commission has also filed civil fraud charges against Son, Chung and the companies.