Charles Ponzi, the Italian con artist that popularized the Ponzi scheme.
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The SEC charged Matthew Motil for fraudulently raising $11 million in a Ponzi scheme.
Motil, the host of “The Cash Flow King” podcast, roped in more than 50 investors, the SEC said.
The complaint said Motil invited potential investors to “be a real estate investing badass!”
The Securities and Exchange Commission on Monday announced that it had charged Matthew Motil, the host of the podcast “The Cash Flow King,” for running a real estate Ponzi scheme that raised roughly $11 million.
The SEC’s complaint, which was filed in the US District Court for the Northern District of Ohio, charges Motil with “violating the registration and antifraud provisions of the Securities Act of 1933 and the antifraud provisions of the Securities Exchange Act of 1934.”
The podcast host used the funds taken from investors to pay back previous investors in the scheme, but also to finance a lavish lifestyle, which the SEC says included a lakeside mansion, courtside tickets to NBA games, and $400,000 of credit card payments for Motil’s wife.
Motil fraudulently raised the money from more than 50 investors, leveraging social media to promote notes that were purportedly backed by residential properties, according to the complaint. Motil attempted to convince investors with promises of low-risk, high-return promissory notes that were collateralized by first mortgages on homes in Ohio.
“As the complaint alleges, however, Motil did not in fact secure first lien positions for the investors as promised and regularly sold multiple promissory notes he claimed were secured by the same property to multiple investors,” the SEC’s statement said. “In one instance, Motil allegedly sold more than $1 million of promissory notes to 20 investors, each note supposedly collateralized by the same property he had acquired for $47,000.”
Using his podcast, website, and social media channels, Motil invited potential participants to “be a real estate investing badass!”
“We allege that Motil used podcasts and social media platforms to bolster his reputation as an investing expert while fraudulently targeting investors’ hard-earned retirement assets, including, in at least one instance, almost the full balance of an investor’s self-directed IRA,” Mark Cave, associate director of the Division of Enforcement, said in a statement. “We are committed to holding those who prey on others accountable for their unlawful conduct.”
The podcaster also communicated that he would pay the investor returns on investment profits that came from renovating, reselling, renting, and refinancing.
“The complaint seeks injunctive relief, disgorgement plus prejudgment interest, civil money penalties, and an officer and director bar,” the SEC statement reads.