A former UBS financial adviser in northern California has been charged with fraud and money laundering for improperly transferring client funds to his bank accounts.

Steven Kobayashi is accused by the United States Securities and Exchange Commission of misappropriating $3.3 million (SFr3.1 million).

In a parallel action the US Attorney’s Office for the Northern District of California filed criminal charges against Kobayashi arising from some of the same alleged misconduct.

An SEC statement said his scheme included cheating investors in a private investment fund and spending $1.4 million of their money on cars, prostitutes and gambling. Kobayashi did not admit or deny any wrongdoing.

“It’s difficult to imagine a more flagrant abuse of that trust than the manner in which Kobayashi pocketed his customers’ money and used it to feed his own habits,” commented Marc Fagel, director of the SEC’s San Francisco office.

Kobayashi agreed to be permanently barred from associating with entities in the securities industry, according to the SEC. A judge will determine the amount of ill-gotten gains and financial penalties Kobayashi will pay in the civil suit, it added.

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