Hard economic times may be bad for most investors and fund managers, but they are good for one thing: exposing frauds.

The SEC charged that Rod Cameron Stringer, a former bail bondsman from Lubbock, Texas, set up what he called a hedge fund that he claimed generated annual returns as high as 61% and 600% in total. The fund allegedly had $45 million on behalf of 31 investors, most of whom are elderly.

The purported hedge fund turned out to be nothing more than a Ponzi scheme, the SEC alleged in its case against Stringer filed in Texas federal court. It has been operating since at least 2001.

In the tried-and-true method of Ponzi schemes, Stringer invested less than 20% of client funds, which lost money, the SEC claimed. The rest of the money went to support Stringer's lavish lifestyle, including a luxury boat, a horse racing partnership, at least two houses and a swimming pool in his office.

Stringer is the latest in a string of alleged frauds that have been exposed in recent months, the biggest being the Bernard Madoff's alleged scam that could end up costing investors as much as $50 billion. In Stringer's case, unlike Madoff's, however, the FBI and the SEC were onto him since at least January 2007.

The FBI supposedly had no idea about Madoff's alleged fraud until Madoff confessed to an agent.

The Texas federal court has frozen Stringer's assets and appointed a receiver.

A lawyer for Stringer could not be immediately reached for comment.