According to authorities, a New Jersey man who pretended to be a successful hedge fund manager has been charged with defrauding investors out of $5 million. According to reports, he spent much of it on expensive cars, million-dollar home, Tiffany jewelry and other luxuries.

On Wednesday, Nicholas Lattanzio was arrested and charged by the US Department of Justice with two counts of securities fraud and three counts of wire fraud. Lattanzio operated Black Diamond Capital Appreciation Fund LP.

Related civil charges were filed by the US Securities and Exchange Commission against the Montclair, New Jersey man. According to it, he invested $800 million in addition to posting 18% annualized returns since 2008.

New Jersey's Bureau of Securities also imposed a $2.5 million civil fine on Lattanzio and a co-defendant, Pasquale Montesanti; federal authorities didn't charge Montesanti.

After a hearing in federal court in Newark, New Jersey, Lattanzio was released on $300,000 bond. His lawyer Mark Berman refused to comment, when he was approached. Lattanzio have been accused of making a New York oil and gas company in addition to an Atlanta hotel developer to wire nearly $2 million each, while assisting them in arranging project financing.

Authorities also said that Lattanzio spent much of those amounts, in addition to nearly $1 million raised from other investors, on himself, his girlfriend, and his children.

Andrew Calamari, director of the SEC's New York office, said in a statement, "Lattanzio masqueraded as a sophisticated hedge fund manager to capitalize on small businesses' legitimate need for financing and to bankroll his affluent lifestyle".