It’s been almost three years since the Securities and Exchange Commission first launched an investigation into private equity shop AA Capital. John Orecchio, who founded the firm, was finally charged with embezzlement last week by the United States Attorney’s Office, which is claiming that he pilfered approximately $24 million from between 2002 and 2006.

AA Capital Partners was spun out from ABN Amro by Orecchio in 2001. The firm had almost $200 million of capital under management, which invested in other private equity funds as well as direct investments, including commitments to multiple casinos and the hip hop label of rapper Shorty Capone.

Orecchio has been charged with one count of wire fraud and one count of embezzling funds of an employee pension benefit plan. The wire fraud count carries a maximum penalty of 20 years in prison and a $250,000 fine, while the embezzlement charge carries a maximum five-year prison term and a matching fine.

According to the Attorney General’s office, AA Capital collected roughly $169 million of funding from union pension funds and Orecchio made capital calls “to obtain funds that he could convert for his own use and benefit.” The fraud created losses totaling $24 million.

While the case has no apparent connection to the current placement agent imbroglio, in which the SEC and New York Attorney General Andrew Cuomo are investigating the use of finders among PE funds, it seems to underscore the threat that concerns regulators.

Joseph Jewett, the former leader of the Michigan Regional Council of Carpenters, was indicted in May on charges that he was the go-between and beneficiary of kickbacks provided from AA Capital to Walter Ralph Mabry, who steered pension assets into the AA Capital funds. Mabry was the former executive secretary-treasurer of the Michigan Regional Council of Carpenters and the chairman of the board of trustees of the Carpenters’ Pension Trust Fund.