The former owner of an Oregon investment firm convinced senior citizens to invest in rehabilitating Portland-area houses but actually misappropriated their money to pay earlier investors and took more than $500,000 of the funds for himself, the Department of Justice claims.

The U.S. Attorney’s Office for the District of Oregon announced this week that it is charging Shayne Kniss with defrauding clients of his investment firm, Iris Capital Management, in what amounted to a Ponzi scheme.

Court documents allege that Kniss offered his clients, many of whom were 65 or older, access to four investment funds backed by houses in the greater Portland area. The properties, investors were led to believe, would be rehabilitated, upgraded and resold at a substantial profit.

According to the U.S. Attorney’s Office, between February 2011 and April 2013, 47 people invested over $4.3 million in the funds controlled by Kniss.

But Kniss allegedly mixed investor money among the funds, used new investors’ money to pay back earlier investors, and used more than $500,000 of investor funds for personal use, including investing in a retail marijuana business.

Portland’s Oregonian provides more details on Kniss’ alleged scheme:

In the wake of a bitter recession and housing crash, Kniss told his clients that the money would be used to buy distressed residential properties, which they would fix up and flip, according to court documents. His investors, many of whom were retired and of modest means, were allegedly promised 8 to 12 percent returns.

But Iris, as first reported by The Oregonian-OregonLive in February 2016, was a disaster. Kniss was unable to make money in housing, even though the market was rapidly recovering. In midstream, without telling investors, he poured their money into marijuana companies he was part of.

Kniss is scheduled to appear before a federal judge where he will enter a plea and a trial date will be set.