SAN DIEGO -- The El Cajon offices of hedge fund Plus Money, Inc. are locked and empty.

The home of Matthew "Beau" La Madrid, who ran the fund, is left wide open, but abandoned.

"He conned me, hook, line, and sinker," said investor Jon Benedict. "And I really believed him."

"The toughest part has been to confront the reality that the money is gone," said investor Melanie Heisey.

The 10News I-Team spoke to seven investors who lost $1.2 million dollars in the hedge fund, including a housewife, business professionals and two firefighters.

In all, 300 San Diegans put money into the Plus Money, Inc. hedge fund.

Most people put in an average of $100,000, but for some the investment was as high as $1.6 million.

Some of the investors are suing La Madrid, along with his brother, Lance, Eric Montiel and Richard Kassler. The investors believe Matthew La Madrid was the mastermind of the fund.

La Madrid told investors his fund specialized in something called "Covered Calls."

Dennis Brewster, a financial advisor for AIG, not affiliated with Plus Money, said, "it just involves buying common stocks and selling options against them."

Investors were promised returns of 2 to 4 percent per month, or 25 percent per year. For 3 years, the checks from Plus Money arrived every month.

That prompted Randy Kehne, a firefighter, to jump in.

"I saw all the checks coming in, thought I should try it out, too," said Kehne.

Benedict explained, "I started with $50,000, my first check (monthly return on investment) was $1,325.00."

As La Madrid was riding high, his wife was riding around in a Cadillac Escalade with a vanity plate reading "BEAUMNY".

Early this year, Beau's money stopped.

Heisey said, "Once I had seen the first statement showing that there was $18,000 left and there should've been $16 million. That's when I knew."

So, where has the money gone?

A Securities and Exchange Commission complaint gave some hints about what they call "an investment fraud." The complaint read, "It's not clear how much profit, if any, was made."

The complaint said that last fall, La Madrid wired $7.6 million dollars to another company he had created just a month before.

From there, money was shuffled to various accounts, including $500,000 to La Madrid himself, $1.8 million dollars to various real estate title companies, and $185,000 for cars.

Investor Cindy Russell said, "Lots of Lexuses, Mercedes, BMWs, large expensive motor homes, race horses, lots of partying, lots of vacations."

The I-Team found La Madrid's name on title to eight homes in San Diego, including the $10,000 square foot home in Jamul that was once his primary residence.

It's the kind of house that looks perfect for a party with a pool, spa, rock slide, outdoor BBQ and game room. The house is now sitting empty with the doors open, trash and old toys and games inside.

The I-Team came across a betting slip for NFL football games at the home. It appears to be bets on several games, with thousands of dollars wagered.

Most of the investors said they don't expect to get much money back, but they do expect to see La Madrid go to jail.

Brewster said investing in Plus Money, Inc. was risky.

"There were a lot of red flags that should've triggered some alarm bells," he pointed out.

For one thing, the promised returns, 2 to 4 percent per month, were too high. And Plus Money, Inc. never sent any real statements to investors, only spreadsheets that can be easily created and manipulated.

"There are no short cuts," Brewster said. "We all would like to be guaranteed 25 percent a year, but it's just not going to happen."

He said there have been many scams involving hedge funds over the years, for good reason.

Under current law, the SEC does not regulate hedge funds. They are considered private investment pools. As long as client monies are below $25 million dollars, hedge fund managers do not have to be registered with the SEC or report any statements or profit and loss reports.

Hedge fund managers who are not registered with the SEC are suppossed to register with their particular state.

For California, the oversight department would be the Department of Corporations. La Madrid was not registered as a securities broker. His only license was a California Real Estate License.

The SEC does have the power to go after the fund manager if there is alleged fraud, which is what happened in the case of La Madrid and Plus Money, Inc.