The Securities and Exchange Commission said Wednesday that it was freezing assets and pressing fraud charges against the operators of a South Florida-based Ponzi scheme that targeted hundreds of investors nationwide on YouTube and raised some $40 million.

The U.S. attorney in the area also announced criminal charges against the two individuals involved in the scam, which promised investors returns of 300% to 500% in four years if they invested in a product called “virtual concierge machines.”

The two individuals charged by authorities are Joseph Signore of West Palm Beach, Fla., who ran JCS Enterprises, and Paul Schumack II of Pompano Beach, Fla., who operated TBTI.

“Signore and Schumack touted VCMs as a revolutionary enterprise and fail-safe investment based on a stream of advertising revenue that would generate the guaranteed returns paid to investors,” said Eric I. Bustillo, director of the SEC’s Miami regional office, in a press release. “However, the advertising revenue was virtually nonexistent, and investors aren’t enjoying the riches touted on YouTube.”

The pair promised investors that their funds would be used to buy ATM-like machines that would be sold to businesses for use as product and service advertisements; the businesses would sell their offerings via touch screens and through printable tickets or coupons.

These ads would supposedly produce a revenue stream for investors. The two men and their companies, though, paid returns to earlier investors using money from newer investors rather than from ads. “Signore and Schumack also diverted millions of dollars in investor funds for their personal use and other unrelated expenses,” according to the SEC. 

One YouTube video shows an alleged investor polishing a new Cadillac. He is asked, “How can you afford this?” The investor responds, “My Virtual Concierge.”  A spokesperson then says, “Do you want to make more money? Then it is time for you to own a Virtual Concierge.” 

While the Ponzi-scheme operators promised to tell investors where VCMs were located, they did not put many machines in active service or provide information on the locations of the VCMs to investors.

“The majority of investors stopped receiving their monthly payments in January 2014, yet Signore and Schumack continued to solicit new investors while fabricating excuses to placate irate investors no longer receiving their returns,” the SEC explained. “JCS went so far as to issue a press release claiming that TBTI had defrauded JCS and that it was ‘investigating the matter.’ ” 

“The defendants never told investors the most important way in which these machines resembled ATMs: ­ as a source of ready cash from investors that the defendants used for their own benefit,” said Glenn S. Gordon, associate director of the SEC’s Miami Regional Office, in a statement.

The SEC also alleged that Signore and Schumack misappropriated several million dollars of investor funds for themselves. 

A court hearing has been set for April 17.