SEC Charges Washington Man and Indiana Portfolio Manager in $275 Million Ponzi-Like Fraud Scheme

Washington, D.C., Aug. 14, 2025 — The Securities and Exchange Commission has filed charges against Ryan Wear of Marysville, Washington, along with his companies Water Station Management LLC and Creative Technologies, Inc., accusing them of running two interconnected Ponzi-like schemes that raised more than $275 million from over 250 investors between September 2016 and February 2024. In a separate but related action, the SEC also charged Jordan Chirico, a portfolio manager based in Carmel, Indiana, alleging that he breached his fiduciary duty by investing his private fund client into the scheme despite knowing of serious red flags and failing to disclose his conflicts of interest.

“Wear’s alleged scheme spanned more than seven years and ensnared hundreds of investors, including veterans who were solicited with higher guaranteed returns and exclusive financing options,” said Corey Schuster, Chief of the Division of Enforcement’s Asset Management Unit. “Furthermore, it is fundamental to the advisory relationship that investment advisers like Mr. Chirico act in their clients’ best interests and disclose all material conflicts of interest. As alleged, Mr. Chirico failed to do so here while increasing his fund client’s investments in Water Station in the face of red flags.”

The SEC’s complaint outlines that Wear, through Water Station and Creative Technologies, raised over $165 million from retail investors, including a significant number of veterans, between September 2016 and September 2023 by selling investment contracts tied to water machines that were supposedly generating revenues. According to the SEC, many of these machines either did not exist or had already been sold to other investors. A second scheme, carried out between April 2022 and February 2024, brought in an additional $110 million from institutional investors through Water Station notes allegedly backed by water machines. The SEC contends that, much like the first scheme, most of the machines tied to these notes were either fictitious or not owned by Water Station. The agency further alleges that more than $60 million in investor funds was misappropriated to make Ponzi-like payments to other investors and to bankroll Wear’s other ventures, including Refreshing USA, LLC and Ideal Property Investments LLC, both of which were named as relief defendants in the complaint.

The SEC’s separate action against Chirico claims that he violated his fiduciary duty to his private fund client by directing the fund to purchase Water Station notes while concealing his own personal investment in the company. The complaint also states that Chirico caused the fund to significantly increase its exposure to the notes, despite being aware of red flags suggesting that much of the water machine collateral may have been fabricated.

Both cases were filed in the U.S. District Court for the Southern District of New York. The SEC has charged the defendants with violations of the antifraud provisions of federal securities laws and is seeking injunctive relief, civil penalties, and the disgorgement of ill-gotten gains. The Commission is also pursuing an officer and director bar against Wear.

In parallel, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Wear and Chirico.

The SEC investigation was led by Heather L. Shaffer, Ming Ming Yang, and Brian Fitzpatrick of the Asset Management Unit, with assistance from David Zetlin-Jones, Jordan Baker, Neal Jacobson, and Patricia Schrage of the New York Regional Office. The inquiry was supervised by Lee A. Greenwood and Mr. Schuster, both of the Asset Management Unit. Litigation will be conducted by Mr. Zetlin-Jones, Ms. Shaffer, and Ms. Yang. The SEC acknowledged support from multiple agencies, including the U.S. Attorney’s Offices for the Southern District of New York and the Western District of Washington, the U.S. Postal Inspection Service, the FBI, IRS Criminal Investigation, the SBA Office of Inspector General, the FDIC Office of Inspector General, and the Washington State Department of Financial Institutions.

By fLEXI tEAM