Federal regulators said Wednesday that they had charged 26 defendants with defrauding thousands of elderly people of their savings through a hotel time-share scheme.

The Securities and Exchange Commission said Michael E. Kelly and his fellow defendants raised $428 million by promising investors guaranteed returns from renting time shares in several hotels in Cancún, Mexico. Of the money raised, more than $136 million came from individual retirement accounts, the S.E.C. said.

Regulators said that Mr. Kelly used some money raised to make fraudulent “rental income” payments to investors who had invested earlier. When the arrangement collapsed, investors lost more than $300 million, the S.E.C. said.
The commission also said that a nationwide network of sales representatives illegally pocketed $72 million in commissions from Mr. Kelly’s venture.

Merri Jo Gillette, director of the S.E.C.’s Chicago regional office, said the agency would “aggressively seek recovery” of the lost funds.

The case is part of a crackdown on financial fraud aimed at the elderly, the commission said. In the S.E.C. complaint, filed in Federal District Court in Chicago, the agency said that Mr. Kelly and the others violated federal securities laws and asked the court to impose civil penalties and order the return of ill-gotten gains.