The U.S. Securities & Exchange Commission filed civil complaints alleging that Ryan Wear and his entities, Water Station Management LLC and Creative Technologies, Inc., operated two related Ponzi-like schemes tied to purported water machine revenues, raising more than USD 275 million from more than 250 investors between September 2016 and February 2024. In a separate action, the SEC charged portfolio manager Jordan Chirico with fraud and breaches of fiduciary duty for investing a private fund client in the scheme despite undisclosed conflicts of interest and awareness of red flags. From September 2016 through September 2023, Wear and the companies allegedly raised more than USD 165 million primarily from retail investors, including veterans, by selling investment contracts in which investors supposedly purchased water machines that would generate revenues, although thousands of machines allegedly did not exist or had already been sold to other investors. Between April 2022 and February 2024, the defendants allegedly raised more than USD 110 million from institutional investors through Water Station notes purportedly secured by water machines, where most of the alleged collateral did not exist or was not owned by Water Station. The complaints also allege that over USD 60 million was misappropriated to make Ponzi-like payments and fund other ventures, with Refreshing USA, LLC and Ideal Property Investments LLC named as relief defendants; Chirico allegedly directed his fund client to buy and then substantially increase purchases of the notes without disclosing his significant personal investment in the business. Filed in the U.S. District Court for the Southern District of New York, the SEC actions seek injunctive relief, civil penalties, and disgorgement, as well as an officer and director bar against Wear. The U.S. Attorney’s Office for the Southern District of New York announced parallel criminal charges against Wear and Chirico.

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