According to court documents, Ezra Levy, the fund’s chief trader and chief financial officer, has been charged with securities fraud and 10 counts of wire fraud. He is expected to appear before a U.S. magistrate judge in Manhattan later Tuesday.

In court documents, prosecutors from the U.S. Attorney’s office in Manhattan alleged Levy, between January and October, diverted about $726,000 owed to the hedge fund into an account he controls and utilized the money through ATM withdrawals, payments to credit card companies and transfers to a personal bank account.

The money was from an investment in a collateralized note issued by an unidentified Arizona company and generated about $66,000 a month in interest payments for the hedge fund, prosecutors said.

Levy also allegedly caused the hedge fund in June 2009 to purchase shares in Atlas Energy Resources LLC (ATN) at an inflated price from an account he controlled, resulting in a gain of more than $600,000, prosecuto