WASHINGTON (Bloomberg) — A Maryland hedge fund and its manager were sued for fraud by the state’s securities commissioner after at least 140 investors lost almost $10 million in two failed ventures.John H. Williams raised $5.9 million from at least 90 investors in 2006 for the LaJon Capital Fund LP, promising returns of 20 percent a year, the commissioner said. Most of the money was lost through bad trading strategies and fees, or returned to investors as “principal and alleged profits,” according to a complaint filed this week in Maryland state court.

“Williams took fees after he knew the money was gone,” the complaint said. “Nor did it stop him from selling, in December, 2006, another $140,000 worth of fund investments.”

Williams of Upper Marlboro, Maryland, and LaJon Capital Fund face civil claims of selling unregistered securities, selling securities by unregistered agents, violating an antifraud law and making false filings, according to the complaint

Williams and his companies were paid more than $586,000 in fees for the management of the fund’s assets, the complaint said.

Williams wasn’t available for comment, said a man who answered the phone and declined to give his name at LaJon Retirement Planning in Upper Marlboro. The man said Williams would call back when he returned to the office. The allegations in the complaint haven’t been proven in court. The LaJon Capital failure was the second for Williams, according to the suit.

Between June 2005 and May 2006 Williams sold limited partnership stakes in another fund, ChartCandle Inc., to about 50 investors for $3.97 million, according to the commissioner.

That fund, operated by Williams’s associate Stephen Chesnowitz in Ontario, Canada, had more than $1.5 million in trading losses and also had $900,000 frozen as part of the Refco Inc. bankruptcy, the complaint said. Investors were led to believe their money was moved to LaJon Capital after ChartCandle was closed, the complaint said.

The commissioner wants the court to bar Williams and the other defendants from the securities and investment-advisory business. The state also wants all assets of LaJon Capital Fund turned over to a receiver.