Federal officials have accused an Illinois man of misusing money that was supposed to be invested in a life settlement fund and other investment funds.

The defendant, Scott M. Ross, was charged with three counts of mail fraud in a criminal case filed in the U.S. District Court in Chicago by the U.S. attorney for the Northern District of Illinois and the Federal Bureau of Investigation.

Ross was charged with misusing money he raised from investors for his own benefit and of making Ponzi-scheme-type payments to customers who complained, officials say.

Ross owned Harbor Wealth Management L.L.P., Schaumburg, Ill., and two subsidiaries that professed to be in the insurance investment business, officials say.

Between 2006 and 2009, Ross’s businesses offered investments in the Elucido Fund L.P., the Moondoggie Fund L.P. and the Maize Fund L.P., according to officials in the U.S. attorney’s office in Chicago. Ross raised $1.9 million from about 25 investors in the Elucido Fund, which claimed to invest in life settlement contracts, officials say. He also raised about $3 million from 134 investors in the Moondoggie Fund, which invested in a company that was purported to be developing a dual-sided computer monitor, officials say.

Ross caused more than 150 of the investors to lose about $5 million by pocketing funds for his own benefit, officials say. They say he misled investors about his business and investment background and the likely risks and returns on their investments.

Ross told Elucido Fund investors they could expect returns of as much as 34% percent from the fund’s investments in traditional life settlements and viatical settlements, but he never purchased such instruments, officials say.

Ross used money in one fund to pay expenses of another fund, and he paid himself a $319,000 salary, officials say.

Each count of mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and mandatory restitution to investors.

In February 2009, the U.S. Securities and Exchange Commission alleged Ross fraudulently obtained at least $10 million from about 300 investors. The SEC said Ross had been fraudulently soliciting investments since 2007. The SEC obtained an emergency order from the U.S. District Court in Chicago freezing Ross’s assets and appointing a receiver.

In September 2009, the district court appointed a permanent receiver for Ross’s company, and Ross consented to a permanent injunction a enjoining him from violations of the antifraud provisions of federal securities laws, an SEC officials says. The court also barred Ross from associating with any investment advisor, the official says.

Ross could not be reached for comment, and, at press time, his attorney had not responded to a request for comment.