UPDATED 07/28/11 8:06 a.m.

CHICAGO (CBS) — Federal authorities say a Glencoe man led investors to believe their money was going into a sleep disorder business, but he actually used it to buy a mansion, run a tattoo parlor, and live a lavish lifestyle.

Kenneth A. Dachman, 52, was indicted this week on charges that he bilked more than 50 investors out of a total of $4 million.

Dachman ran three sleep disorder businesses in Northbrook – Central Sleep Diagnostics, which purported to treat sleep apnea and other disorders using home diagnostic tests; Advanced Sleep Devices, which claimed to sell equipment to correct sleep disorders; and Key Partners, which handled marketing for both, according to the U.S. Attorney’s office.

LISTEN: Newsradio 780′s Mary Frances Bragiel reports

Between June 2008 and September 2010, Dachman collected funds from investors, but actually used them to purchase a two-acre mansion for himself at 1100 W. Keswick Lane in Lake Forest.

Zillow.com reports the luxurious 9-year-old mansion has imported stone and wood floors, a paneled library, five fireplaces, and a gourmet kitchen with a 13-foot island. It recently sold again for $1.995 million.

Dachman also allegedly used the investors’ funds to operate the Windy City Ink tattoo parlor at 166 W. Division St. on Chicago’s Near North Side, which he operated with his son-in-law, prosecutors said.

He also used investors’ funds money for vacations and cruises that took him to Italy, Nevada, Florida and Alaska, as well as a new 2008 Land Rover sport-utility vehicle, prosecutors said. The money also went toward gambling in Las Vegas, stock trading on the order of $200,000, and the purchase of rare books and antiques, prosecutors said.

Dachman personally guaranteed that certain investors’ principal would be repaid when he took their money, prosecutors said. But in reality, he had almost no assets and had filed for personal bankruptcy seven times, prosecutors said.

Dachman also lied and said he had a Ph.D. from Northwestern University, and said he had invested his own money in Central Sleep Diagnostics when he had not invested a cent, prosecutors said.

He is charged with 11 counts of wire fraud, which in total carry a maximum penalty of 220 years in prison and a fine of $2.75 million.

The indictment against Dachman also seeks the forfeiture of at least $4 million, as well as the Land Rover.

The Sun-Times Media Wire contributed to this report.