By Jonathan Stempel

NEW YORK (Reuters) - The U.S. Securities and Exchange Commission said on Monday it obtained an asset freeze against two men who defrauded investors in an offshore mutual fund that purported to invest in safe Treasury securities.

In a complaint filed in Manhattan federal court, the SEC said Ofer Abarbanel and Victor Chilelli misappropriated assets from their Income Collecting 1-3 Months T-Bills Mutual Fund, including through shell companies, and hid their misconduct.

The SEC also said Abarbanel wrongly refused a $106.5 million redemption demand from his largest investor group, instead offering to return a "fraction," and on June 4 moved $64 million to a brokerage account where no redemptions could be made.

Abarbanel, 46, is an Israeli citizen living in Woodland Hills, California, while Chilelli, 51, lives in Lewes, Delaware, the SEC said.

A lawyer for Abarbanel did not immediately respond to requests for comment. Chilelli could not immediately be located, and it is unclear whether he has a lawyer.

The SEC said the Income Collecting fund told investors it would invest mainly in Treasuries maturing in one to three months, and enter reverse repurchase agreements with Treasuries serving as collateral.

In fact, the Cayman Islands-registered fund invested only about 1% of assets in Treasuries and did not enter the repurchase agreements, the SEC said.

Lawyers for the SEC said in a court filing that an asset freeze was necessary because of the "extensive scope" of the defendants' misconduct, and their mishandling of investor money while the redemption request was pending.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)