The Securities and Exchange Commission on Thursday charged two men and eight companies with defrauding more than 125 investors out of $8 million, in a scheme involving shares and promissory notes issued by the companies over more than seven years.

The SEC’s complaint, filed in U.S. district court in Syracuse, N.Y, named James P. Griffin, the founder and chief executive of 54Freedom, both of Cazenovia, New York, and James Wolle, 54Freedom’s chief financial officer and treasurer. Six other Cazenovia, N.Y.-based firms — 54Freedom Securities, MoneyIns, 54Freedom Foundation, 5 Ledyard Ave., 5 Ledyard, IICNet, and Miami-based 54FreedomTele — also were named in the complaint.

The SEC’s complaint alleges that Griffin and Wolle repeatedly misled prospective investors regarding the companies’ prospects. For example, the two falsely claimed that they had an exclusive relationship with Lloyd’s of London and that they would publish a soccer book affiliated with the “Chicken Soup for the Soul” series.

In addition, Griffin is alleged to have sold purported “charitable gift annuities” that he falsely claimed were backed by reputable insurance companies and to have diverted at least $1.2 million of investor funds to pay for corporate and personal expenses, including a boat and trips he and his wife took to Hawaii and New Zealand.

According to the SEC complaint, 54Freedom’s initial purported business was selling insurance products to the 54 million Americans with disabilities.

“However, early on (if not from the outset), it was apparent that 54Freedom’s business goal was unworkable – i.e., that 54Freedom was not generating, and would not generate, significant or meaningful revenue,” the SEC complaint says. “Defendants nonetheless proceeded for years to induce unsuspecting investors (many of them elderly) to purchase 54Freedom stock and promissory notes with wildly optimistic projections regarding the companies’ future revenues, stock prices, and stock listings.”

“We allege that Griffin and Wolle picked numbers out of thin air and even guaranteed projections to purchasers of the securities while taking undisclosed sums for themselves,” Andrew M. Calamari, director of the SEC’s New York regional office, said in a press release.

The SEC’s complaint charges Griffin, Wolle, and the eight companies with violations of the antifraud and registration provisions of the securities laws and names Griffin’s wife, Chary Griffin, as a relief defendant for the purpose of recovering allegedly misappropriated investor funds.

In a parallel criminal action, the U.S. Attorney’s Office for the Northern District of New York announced last week that it had arrested Griffin on charges of fraud and money laundering related to the charitable gift annuities.

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