The seal of the U.S. Justice Department is seen on the rostrum in the Department’s headquarters briefing room.
Kevin Lamarque | Reuters
Two men have been indicted in New York on federal legal prices in reference to a water vending machine Ponzi scheme that allegedly swindled buyers out of greater than $200 million, the Department of Justice mentioned Thursday.
The two men have been additionally hit by the Securities and Exchange Commission with civil prices of violating antifraud provisions of the federal securities legal guidelines in connection the identical scheme.
Ryan Wear, 49, of Everett, Washington, is accused of “raising more than $200 million from investors by selling them water vending machines that, in many cases, did not exist, and paying promised returns through new investor money,” the DOJ mentioned in a press launch.
Wear, who’s the previous proprietor and operator of an organization referred to as Water Station Management, is charged with securities and wire fraud. His firm was pressured out of business final August.
The indictment towards him in U.S. District Court in Manhattan says that lots of the individuals swindled in the scheme have been retail buyers and navy veterans.
Former fund portfolio supervisor Jordan Chirico, a 41-year-old from Carmel, Indiana, is accused of buying greater than $100 million in bonds issued by Water Station whereas “concealing his personal financial stake in the company and, eventually, his knowledge of the fraud that had been perpetrated by Wear,” the DOJ mentioned.
Chirico is accused of a scheme to defraud 3|5|2 Capital ABS Master Fund LP, an funding fund
which was a part of Jefferies Financial Group’s Leucadia Asset Management.
Chirico, who was a supervisor for the fund, is charged with funding advisor fraud in a separate indictment in Manhattan federal courtroom.
Both men face a most attainable sentence of 20 years in jail if convicted.
“Ryan Wear raised hundreds of millions of dollars through false promises of a water vending machine business that became nothing more than a scam that victimized retail investors, including military veterans,” mentioned Manhattan U.S. Attorney Jay Clayton in a press release.
“Jordan Chirico made matters worse by putting his own financial interests before his professional duties, investing clients’ money in Water Station — helping himself and hurting his investors — even after he knew it was a scam. One fraud does not excuse another. With the assistance of our dedicated law enforcement partners and our colleagues throughout the Department of Justice, this Office will continue to aggressively pursue financial frauds on Wall Street and Main Street.”
FBI Special Agent in Charge W. Mike Herrington, who relies in Seattle, Washington, mentioned, “The scale of this fraud, which resulted in at least $200 million in losses, is simply staggering.”
“And the deception and obfuscation these two men allegedly engaged in to siphon funds from retail investors, even U.S. military veterans, is absolutely unconscionable,” Harrington mentioned.