SAN DIEGO – A federal grand jury has indicted three people who worked at a $100 million hedge fund for allegedly spending investors' money on a lavish lifestyle, federal prosecutors said Thursday.

An indictment charging Marvin I. Friedman, Paul H. Levy and Alice M. Swiderski with multiple counts of fraud and money laundering in the operations of the Global Money Management hedge fund was unsealed Wednesday in U.S. District Court in San Diego.

Friedman, 65, and Levy, 51, managed the San Diego-based hedge fund through their partnership, LF Global Investments. Swiderski, 45, was employed as the fund's office administrator.

Attorneys for Friedman and Levy did not immediately return messages left seeking comment Thursday.

Swiderski's attorney Lisa Damiani said her client was a secretary who did nothing wrong and cooperated with investigators as they began probing Global Money Management.

Last year, a federal judge halted Global Money Management's operations at the request of the U.S. Securities and Exchange Commission, which said the fund grossly overstated its assets to investors.

A court filing by the SEC claims Friedman sent account statements to investors for the period ending Dec. 31, 2003, which listed the fund's assets at nearly $112 million while the actual value was only $211,000. The SEC said the value of the accounts dropped to about $20,000 in January.

Federal prosecutors say Friedman and Levy used investors' money to pay personal expenses and transferred money into their own bank accounts.

Friedman has operated the investment group in the city's wealthy La Jolla neighborhood since 1993, according to the SEC. The SEC says he failed to reveal to investors that he repeatedly has been censured and fined by the National Association of Securities Dealers and barred from association with any NASD member.