A non-profit group invested $100,000 with a broker promising large returns — only for Bermudian businessman Andre Curtis to end up holding all the cash, a security expert told a public hearing.

Pennsylvania-based Dream Foundation was one of 22 investors which paid more than $4 million between them into a bogus scheme Mr. Curtis is accused of running with convicted money launderer Daniel Two Feathers.

Dream Foundation has still not got its money back, Montana State Auditor Office's deputy security commissioner Lynne Egan told a hearing examiner who will decide whether Mr. Curtis has violated state laws.

Ms Egan said Dream Foundation boss John Dubach made a $100,000 payment after Mr. Two Feathers showed him a "trading platform" offering profitable returns.

But that cash instead found its way into Mr. Curtis' Harvest Investment Holdings account.

Harvest is said to have received other hefty sums — including nearly $2 million from American businessman John Sheaffer, who committed suicide last year — before its account was frozen when the Montana auditor launched its investigation into the scheme in late 2008.

Everyone else said to have been involved with DTF Consulting Group, the team allegedly running the operation, has now settled with the auditor, but Mr. Curtis is maintaining his innocence.

A transcript of last month's open hearing, in which Mr. Curtis spoke over the telephone to defend himself, has now been made available.

It shows Ms Egan told the hearing: "Mr. Curtis, both independently and in conjunction with Dan Two Feathers, transacted business to or from the state of Montana as a broker dealer firm without registration, as a sales person without registration, offering and selling of bogus investment return, making misrepresentations, and omissions of material fact to multiple investors."

Asked for an example of a misrepresentation by Mr. Curtis, she said: "That the purchase and sale of US Treasury Strips on a daily basis will result in rates of returns that exceed double and triple digits."

Mr. Curtis interjected: "I, I did?"

Ms Egan said after meeting Mr. Two Feathers, Dream Foundation wired its $100,000 to clearing broker Penson Financial Services. Mr. Curtis then sent Penson instructions on how to disburse that cash.

"The instructions were to wire the money to Harvest Investment Holdings' account at the Bank of Bermuda Limited," she said.

Attorney Roberta Cross Guns probed: "Once it got to Harvest Investment Holdings, was it identified as money belonging to John Dubach or the Dream Foundation?"

Ms Egan replied: "No, it was not."

She continued: "The money, the assets were in an account owned or controlled by Andre Curtis."

As Mr. Curtis weighed in "I didn't have a clue", Ms Egan continued: "They have not received any return as represented and promised and they have not received back the principal."

Mr. Curtis said he doesn't know who John Dubach is, adding: "I have no knowledge of that and I'll check ... but I have no money left. I don't know about that ... I'll check it out, if there's money there."

Ms Egan also spoke of Mr. Sheaffer, the CEO of Illinois-based Sysix Technology, who is said to have invested nearly $2 million after being promised a return of 66 percent within 25 days.

Sysix was believed to have been paid back more than $1 million following a court hearing in Bermuda last year. Mr. Sheaffer committed suicide last July amid reports his business was suffering financial difficulties.

The commissioner said she was contacted by Mr. Sheaffer in December 2008.

"Mr. Sheaffer had some grave concerns about the money he had invested in Harvest Investment Holdings," she said.

"He was unable to reach Mr. Curtis. When he called Mr. Curtis' office, he was told by, I believe, a Detective Geraghty, that Mr. Curtis has been arrested.

"He did some, I think, his own investigation. He told me he had gone to the Internet and done some Googling of the name Andre Curtis and Dan Two Feathers and that's how he contacted our department. He found our pleading online."

She mentioned another investor, Ida Brown of Texas, who handed over documents signed by the DTF Consulting Group. Signatures on these exhibits were Dan Two Feathers, Shawn Swor and Andre Curtis, said Ms Egan.

Another witness was Eric Schultz, who was previously named as an alleged scammer but has since paid back $500,000.

Mr. Schultz said he invested $200,000 into Harvest himself, but Mr. Curtis later informed him the account was frozen before they had the chance to "start the transactions they were going to do to increase the funds".

He described Mr. Curtis as the account manager, whom he "did most of the discussions with at that time".

Throughout the hearing, Mr. Curtis protested his innocence, insisting he's merely a "money manager" and stating of Mr. Two Feathers at one point: "I didn't know these guys are flipping dirty. They came up clean. From our checking, they came up clean and we opened an account for him. And that's it."

He said he had never agreed to be a trustee for the DTF Consulting Group, prompting Ms Cross Guns to reply: "But your signature, your signature, Andre, your signature is on the documents."

Mr. Curtis responded: "I don't have an answer for that question. I have no answer for that."

Mr. Curtis had begun by arguing Montana does not have the jurisdiction to do the hearing, adding "and neither do they have any evidence or anything like that".

He quizzed Ms Egan at one stage: "Harvest Investment Holdings. Is it possible, in your mind, right, that Harvest just could be a money manager, like not be aware of any of this garbage that's going on with this, this Two Feathers and, and, and whoever and could just be a money manager? Like just manage, just somebody's money somewhere, like on instruction, or no?

Ms Egan replied: "No."

In his wrap-up speech, Mr. Curtis said: "We're proving ourselves that we've done nothing wrong in this situation and that we don't know you from Adam, other than the fact that we've done, we did a couple of, clearly, it was a help.

"And Two Feathers is, Two Feathers' name, our guy, his name, he was clear and clean."

He continued: "We didn't care how much money it is. So, that, no thank you. So that's that and, and, and with respect to other guys mentioned in this lawsuit, I don't know who they are. I never met them, never, I don't even recall their names. I don't know who they are.

"And the lady who lost money. And I don't know her. I never met the lady, never did anything. The first time I heard of the lady was when Ms Cross Guns came to our local, our local media here and and... Otherwise, I didn't know, I didn't know about all of that."

Mr. Curtis also pointed to his relationship with Premier Ewart Brown, whose Progressive Labour Party campaign he ran in Warwick South Central during the 2007 General Election.

"And the strange thing is that what I find a strange situation is that Two Feathers," he said. "And I, and no one, no one has called him, you know that I've, whatever I've done, but because of my relationship with the Premier, but that's another case.

"You heard Eric Schultz say that I didn't know anything about the situation in the beginning. I would have never, ever involved my company or myself in it. At any rate. And that's a fact. I rest my case."

The auditor has submitted 15 documents of evidence to the hearing examiner; Mr. Curtis was given the chance to do likewise. The examiner will then rule whether Mr. Curtis faces fines or having to pay back any victims.

• Mr. Curtis is due to face a Supreme Court trial in Bermuda on October 18, accused of carrying on an investment business, Harvest Investment Holdings, without a licence, and providing misleading statements.