A New York based money manager who claimed to have $13 million in a Bermuda bank account and royal ties has been arrested and charged with defrauding investors of at least $6 million by the Securities and Exchange Commission (SEC).

The SEC announced on Friday that it had obtained an emergency court order to freeze the assets of Guy Albert de Chimay and his firm Chimay Capital Management Inc., alleging they had been touting investments Chimay claimed were tied to the Chimay royal family of Belgium and then stealing millions of dollars to pay divorce lawyers and the mortgage on his house in the Hamptons.

On the same day, Chimay was arrested in North Carolina after he was charged with grand larceny and forgery by the Manhattan District Attorney.

Chimay and his firm were alleged by the SEC to have solicited investments in a bridge loan facility that was to pool investor funds with millions of dollars of Chimay royal family money to make safe and profitable short-term loans to companies, accusing Chimay, who claimed to be related to the current head of the Chimay royal family, Prince de Chimay, of stealing the investors' money.

The SEC said that Chimay falsified bank statements to hide the fraud while diverting at least $6 million into his personal bank account or otherwise misspending it on unrelated firm expenses.

"Chimay used the trappings of royalty to perpetrate the most common of frauds," said George Canellos, director of the SEC's New York regional office. "Chimay blatantly lied to investors about non-existent investments and then used their money to bankroll his exorbitant personal and business debts."

According to the SEC's complaint, filed in US District Court for the Southern District of New York, Chimay Capital claimed to have approximately $200 million in assets under management when the bridge loan facility investment opportunity was first marketed to investors in 2008.

Investors were told that Chimay Capital had a long and profitable history as the US investment arm for the Chimay royal family and a privileged circle of family friends, and the investment opportunity was being made available to only a chosen few outsiders, the SEC said. Chimay was alleged to have promised outside investors they would receive guaranteed fixed annual returns of 12 percent regardless of the actual performance of the loans.

The SEC alleged that there is no evidence that any bridge loans were actually made, and investments were instead used to make mortgage payments on Chimay's multi-million dollar home in the Hamptons and pay more than $500,000 to the law firm representing Chimay in a divorce proceeding. Investor money also was fraudulently used to pay Chimay's massive credit card bills as well as Chimay Capital's rent and payroll, in addition to paying off disgruntled counterparties in Chimay's other business ventures, the SEC added.

As recently as December 2009, Chimay, sought a multi-million dollar bank loan on the basis of false representations that he had $13 million in liquid assets in a Bermuda bank account, according to the SEC, who said that the account balance was actually zero.

The SEC acknowledged the assistance of the New York County District Attorney's Office and the Bermuda Monetary Authority in the matter.

In addition to the New York criminal charges and the SEC's lawsuit, Chimay also faces at least three investor lawsuits.