The man who made the successful $5 million bid on Black Caviar's half brother paid only a fraction of that amount to the auctioneers and its breeder, with more than $1 million going into accounts he controlled, according to racing investigators.

Bill Vlahos made the winning bid at last April's Sydney Easter yearling sale, claiming to have syndicated the colt before the fall of the hammer.

But investigators allege Vlahos received $1.783 million in payment for shares in the colt, channelling more than half of it into bank accounts controlled by him.

The movement of six-figure amounts around Vlahos' bank accounts is detailed in charges laid by Racing Victoria on Friday.

One of the accounts operated by Vlahos was associated with a punting club known as The Edge that he operated from 2005 to 2013.

It is alleged at least $381,000 was transferred from the account supposedly containing money deposited by investors in The Edge to racing company BC3 Thoroughbreds, the entity that purchased the $5 million yearling and of which Vlahos was chairman.

Company accounts described the money as a loan from Vlahos to BC3.

It is further alleged Vlahos diverted $958,125 paid by four intended part-owners in the colt for the use of BC3 Thoroughbreds without their consent or knowledge and without any benefit to them.

In light of the investigations, stewards have laid two charges against Vlahos under Australian Rule of Racing 175(a) which covers dishonest, corrupt, fraudulent, improper or dishonourable action or practice in connection with racing.

Problems with BC3 surfaced when the $5 million yearling, known as Jimmy, became ill and developed the hoof complaint laminitis and died.

Vlahos has failed to appear at recent court hearings related to The Edge and at a creditors meeting called by the administrators of BC3.

The charges will be heard by Victoria's Racing Appeals and Disciplinary (RAD) Board on a date to be fixed.

Vlahos has been stood down pending the inquiry which means he cannot attend race meetings or bet on thoroughbred racing.