U.S. securities regulators have put a stop to an alleged Ponzi scheme that has previously prompted warnings from a couple of Canadian regulators.

The U.S. Securities and Exchange Commission (SEC) announced that it has brought charges against, and frozen the assets of, the operators of a worldwide pyramid scheme targeting the Asian and Latino communities.

The SEC alleges that three entities collectively operating under the business names WCM and WCM777 are posing as companies in the business of selling third-party cloud computing services, and promising huge returns for investors.

According to the SEC’s complaint filed in federal court in Los Angeles, WCM and WCM777 have raised more than US$65 million since March 2013 “by falsely promising tens of thousands of investors that the return on investment would be 100% or more in 100 days.” It says that investors were told they would receive “points” for making investments or enrolling other investors, which would be convertible into equity in initial public offerings of high-tech companies. Instead, the SEC alleges that investor funds were used to pay purported investment returns to some investors, and diverted for other purposes.

Both New Brunswick’s Financial and Consumer Services Commission and Quebec’s Autorité des marchés financiers (AMF) have warned investors about the scheme in the past.

The SEC’s allegations have not been proven, but the court has granted its request for an asset freeze and for the appointment of a temporary receiver over the assets of WCM, WCM777, and several other entities. It also granted an order prohibiting the destruction of documents and requiring the defendants to provide accountings. A court hearing has been scheduled for April 10.

In its complaint, the SEC alleges that WCM and WCM777 sell their products exclusively to investors and have no other apparent sources of revenue. It also says that the companies made various false claims to investors about purported partnerships with more than 700 major companies.