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HARTFORD, Conn. (AP) — A Rhode Island businessman facing federal securities fraud charges is accused of misusing some of the taxpayer funds he obtained from the state of Connecticut to purchase a car for his daughter.

The U.S. Attorney for the Southern District of New York and the FBI say 54-year-old David Wagner, of East Greenwich, obtained a $400,000 loan and $100,000 grant from Connecticut's Department of Economic and Community Development "on the basis of materially false statements" in 2017 to help relocate his medical technology investment firm from New York to Connecticut.

Authorities say the majority of the funds were transferred to other businesses and to purchase the BMW.

Wagner and an associate were charged last Friday with defrauding investors in a Ponzi-like scheme. Wagner's attorney declined to comment to the Providence Journal .

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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