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(Bloomberg) -- In the Broadway smash hit "Hamilton," actors playing Thomas Jefferson, James Madison and Aaron Burr sing “Follow the money and see where it goes,” as they plot to take down their rival, Alexander Hamilton.

Federal authorities said Friday said they too had followed the money, announcing charges against three men accusing of scamming investors out of millions of dollars. They allegedly told investors they would buy and resell tickets to popular concerts and musicals including “Hamilton.” Instead, they pocketed some of the cash and used the rest to repay earlier investors, prosecutors said.

Steven Simmons, a middleman raises money from investors for hedge funds, and Joseph Meli, a concert promoter, were charged with securities fraud by federal prosecutors in New York. They are accused of helping a fund manager raise money to repay about $4.2 million to an earlier investor whose money had been misappropriated. 

Meli allegedly told victims the money would go toward block purchases of Hamilton tickets and promised an investment return of 10 percent within eight months. Meli also said he had a contract with the producer of the show for the resale deal. In fact, according to an FBI agent’s statement, Meli approached the producer about the arrangement, but the producer declined to participate.

Simmons and Meli appeared in magistrate’s court and were allowed to remain free on bail. Defense lawyers Michael Bowen, who is representing Meli, and Florian Miedel, who is representing Simmons, didn’t immediately return calls seeking comment.

Separately, the U.S. Securities and Exchange Commission charged Meli and a third man, Matthew Harriton, in the same scheme, telling investors they had a deal to buy and resell 35,000 tickets to the show. 

Harriton couldn’t be reached for comment and his lawyer couldn’t be identified.

According to the SEC, Meli and Harriton raised more than $81 million from 125 investors in 13 states. But the money was diverted to other investor repayments and $2 million in personal expenses as well, including $82,000 to a jewelry store, $208,000 for a luxury car dealership and nearly $50,000 used at an Atlantic City casino.

According to the FBI agent’s statement, at least one of the victims in the scheme, identified only as "Victim Entity-4 Manager," is a well-known hedge fund industry executive who invested $3.5 million in the scheme. On a secretly recorded conversation, an informant told Meli the investor was a "big name" in the industry.  

The case is U.S. v. Simmons and Meli, 17-mag-647, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Christian Berthelsen in New York at cberthelsen1@bloomberg.net. To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Paul Cox, Andrew Martin

©2017 Bloomberg L.P.

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