South Carolina businessman Dwayne Edwards has settled with the Securities and Exchange Commission after being charged in January in a $3.9 million fraud case for allegedly diverting investor funds meant to buy or renovate senior living communities and using them for other purposes, the SEC announced July 7.

Nine communities have remained in receivership since the charges were leveled.

The SEC said it obtained the judgment against Edwards on June 9. As part of the agreement, he will not participate in future municipal securities offerings. Financial penalties have not been determined.

Edwards and his attorneys have not spoken with the media about the case.

Between July 2014 and September 2015, according to SEC’s January complaint, Edwards and his business partner, Todd Barker, and the limited liability companies they set up to serve as borrowers, raised nearly $62 million through nine separate municipal bond offerings.

Edwards, the commission said, improperly commingled at least $3.9 million from the offerings and the revenues of the communities underlying them. Each of the offerings was supposed to finance a particular assisted living or memory care community in Alabama or Georgia, according to the government, but Edwards allegedly diverted the money for personal use and to finance other unrelated bond offerings.

“As alleged in our complaint, investors thought they were investing in a single senior housing project, while their money was actually being used to fund an ever-expanding web of affiliated facilities and the personal expenses of Edwards and his friends and family,” Andrew M. Calamari, director of the SEC’s New York regional office, said at the time.

Barker previously agreed to a settlement.

Another defendant in the case, Sharon Nunamaker, also known as Sharon Hadden, of SDH Design, also settled with the SEC in June and was ordered to pay $7,742.16. The SEC alleged that she had received some of the commingled funds from Edwards.

Nine communities in receivership

The June 9 order also continued the receivership of the nine Oxton Senior Living and Manor House Senior Living communities underlying the bond offerings. The communities, which have a combined total of 485 units, are being marketed by Marcus & Millichap. Bids on the portfolio were due June 15, according to information on the website maintained by the receiver, Derek Pierce, managing director of turnaround and consulting firm Healthcare Management Partners LLC.

Pierce has been overseeing the operation of the properties since they were put into receivership in January — directly for three and indirectly for five others, which are being managed by Affinity Senior Living, according to Marcus & Millichap. An additional community was renovated and is unoccupied.

“Over the past few months, I have had the pleasure of meeting and visiting with several employees and residents to hear firsthand the things that are important to them,” Pierce said in a message posted to the website. “I have also met with the facilities’ administrative staff and have full confidence in their ability to maintain a high level of care for the residents of their facilities and to operate their respective facilities responsibly with efficiency and integrity.”

Eight of the nine bond offerings at issue in the SEC’s January complaint involved the purchase of a community from the former CEO, president and director of Global Healthcare REIT, Christopher Brogdon of Atlanta, whom the SEC previously sued and obtained a judgment against in connection with a series of similar bond offerings. As the result of a separate case, Brogdon reportedly agreed to repay more than $86 million to investors after he reportedly misused their funds, which had been raised to purchase and renovate senior living facilities.