Bradley Ruderman, 46, surrendered to face charges that he lied to his investors about the health of his two funds. Investigators said he sent out false statements showing that investors' money was growing when, in fact, they were losing money.
In addition, Ruderman allegedly spent nearly $9 million on personal expenses, including a couple of Porsches and rental of a summer beach house in pricey Malibu, the U.S. attorney's office said in a written statement.
"During a recent interview with the FBI, Ruderman admitted that he lost $5.2 million of investor money in clandestine poker games held on a regular basis in a suite at a luxury Beverly Hills hotel," the statement said.
Prosecutors said Ruderman only had 22 investors, but they included friends and family members who had been lured in by the prospect of double-digit returns and Ruderman's claims to have some $206 million under management.
Ruderman was scheduled to appear before a federal magistrate in Los Angeles to answer to a wire fraud charge, which carries a 20-year maximum sentence.