The SEC sued Feb. 11 in Tampa federal court, and U.S. District Judge Mary Scriven froze assets and issued a temporary restraining Friday against EquiAlt, Davison, Rybicki and affiliated companies. They are barred from misrepresenting the nature of the program to potential investors.

In a separate order, Scriven appointed Tampa attorney Burton Wiand of Wiand Guerra King as receiver of the properties and accounts. He is to investigate their dealings and issue a report to the court. He was a member of the SEC's enforcement division for 14 years.

EquiAlt, Davison and Rybicki are scheduled for a show-cause hearing on a request for a preliminary injunction Feb. 27.

Rybicki attorney Stephen Cohen, a partner at Sidley Austin in Washington, denied the allegations.

"The SEC's filings present an inaccurate picture of Mr. Rybicki's business dealings, and we look forward to addressing these matters with the court," Cohen said in an emailed statement.

The attorneys for EquiAlt and Davison, DLA Piper partners Jessica Masella in New York and Jonathan Haray in Washington, D.C., didn't respond to a request for comment by deadline.

The civil securities complaint signed by attorney Alise Johnson paints a dire financial situation where there isn't enough money to cover the $167 million owed to investors by year's end. The agency said EquiAlt has $6.8 million remaining in its accounts. The company valued its real estate holdings at $145 million, but the SEC noted the amount may be inflated.

The SEC charges the fraud scheme starting in 2011 was run through four EquiAlt funds: EquiAlt Fund LLC, EquiAlt Fund II LLC, EquiAlt Fund III LLC and EA SIP LLC.

Davison of Tampa was in charge of accounting, finance and bank accounts for the four funds, and Rybicki of Phoenix was more on the communications side, executing investor agreements, according to the SEC complaint.

Davison and Rybicki improperly received $11 million in 2017 and 2018, and then last year Davison received $6.1 million and Rybicki got $1.2 million of investors' funds, according to the SEC complaint. They said the money was for the repayment of loans to the funds. In reality,the SEC said Davison allegedly spent $2.7 million on high-end cars, watches and charter flights. He also took $1.8 million in cash that he used to pay personal federal income taxes.

As for the distressed properties, one is a $2.7 million Manhattan condominium bought with investors' money that generated no returns for them. The SEC said Davison stayed there on a trip to New York.

The scheme started with misrepresentations or omissions made to potential investors promising them a "safe," "low risk," "secure" and "conservative" investment program, the complaint said. EquiAlt said in marketing materials it owned condos, single-family homes and apartment buildings, and it boasted its program would "protect against market conditions" and was "not susceptible to interest rate hikes & lending trends."

Other alleged misrepresentations in written materials provided to investors said there "may" be commissions for brokers or other intermediaries when in reality there always was a commission. This included 10-14% to Rybicki's BR Support Services LLC, which received $24 million of investors' money, the SEC said.

More than $6.61 million was transferred among the EqiAlt funds, which wasn't disclosed to investors, to pay existing investors, the SEC said.

"We allege that Davison and Rybicki made 'too good to be true' promises about nearly every material aspect of EquiAlt's business to induce retail investors, including elderly individuals, to invest with them," regional SEC director Eric Bustillo said in a news release.

EquiAlt and its funds were not registered with the SEC, even though the company told investors otherwise.