(HedgeCo.Net) the Securities and Exchange Commission charged George Slowinski with perpetrating a more than $20 million offering fraud involving real estate in the South Side of Chicago, Illinois impacting more than 600 investors.

As alleged in the SEC’s complaint, Slowinski, a Texas resident, was a principal and owner of Rebuilding America, LLC, which purportedly offered real estate investments. Slowinski and Rebuilding America allegedly told investors that Rebuilding America would pool investor proceeds to acquire, refurbish, and sell for profit residential real estate primarily located in the South Side of Chicago. Slowinski and Rebuilding America allegedly lured investors by touting Rebuilding America as a successful real estate program, and falsely promising to pay investors 38% returns in only two years. They allegedly raised more than $20 million from over 600 investors with assistance from London-based Project Kudos Group Limited and Singapore-based Infinity Treasures Private Limited.

According to the complaint, while Slowinski touted Rebuilding America’s profitability, he hid from investors that between 34% and 42% of every investment dollar would be diverted, upfront, to Slowinski and other Rebuilding America principals in the form of undisclosed fees and commissions. Slowinski allegedly quickly realized that Rebuilding America’s business model was untenable, and would not be able to repay investors as promised. Yet, Slowinski allegedly continued to solicit investors and accept the hidden fees. The SEC further alleges that Slowinski diverted more than $2.8 million of investor funds, which had been earmarked for construction on specific Rebuilding America projects, to improperly pay for his companies’ payroll, overhead, and cost overruns on other projects.

The SEC’s complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges that Slowinski violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and aided and abetted Rebuilding America’s violations of the antifraud provisions of Sections 17(a) and 10(b), and Rule 10b-5 thereunder. The complaint seeks injunctive relief, disgorgement of ill-gotten gains, and civil penalties.