SEC: Afghanistan vet, cancer researcher victimized in ‘Cash Flow King’ Ponzi scheme

Matthew Motil, host of the podcast, "The Cash Flow King," fraudulently raised approximately $11 million from more than 50 investors in a Ponzi scheme, according to the Securities and Exchange Commission.

In the civil action, the SEC seeks financial penalties, disgorgement of gains and to bar Motil from being allowed to sell securities in the future.

According to the complaint, Motil scammed "Investor A" out of more than $577,000, "virtually all of Investor A’s life savings and retirement funds." At one point, "Investor B" told Motil that "he needed to receive his overdue payments because he was being deployed to Afghanistan and would not be able to communicate from there." "Victim C" was a cancer researcher in Florida.

The SEC claims Motil told investors that he would pay the investors returns on their investments from profits from renovating, reselling, refinancing, and renting the properties. Motil allegedly promoted the same investment properties to multiple investors, telling each of them that they held the "first position" lien.

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. Rather than renovate the properties, Motil allegedly used investor money to make Ponzi payments to previous investors and to fund an extravagant lifestyle.

Motil, 42, and his wife Amy, 35, allegedly spent over $107,000 on a seven-month rental of a lakeside mansion; over $73,000 for courtside seats to the Cleveland Cavaliers; over $45,000 to repay student loans; over $37,000 on purchases from Best Buy; over $23,000 on “Leeny’s Lean Body”; over $22,000 on iTunes, over $14,000 at Starbucks; and over $13,900 at numerous pizzerias. Amy Motil is named as a relief defendant.

Social media maven

Motil is an Ohio-licensed professional engineer, and a self-described entrepreneur and real estate expert, court documents say. Motil holds a doctorate and an MBA, and has claimed to have a J.D. majoring in Intellectual Property, earned in one year from the University of Akron School of Law.

Motil ran a website for prospective investors on which he claimed have “investment opportunities ranging from $10,000 to $10 million,” and invited those who visited the website to “Be a Real Estate Investing Badass!” and to “fire [their] boss, quit [their] 9 to 5, and build a business/lifestyle [they] love earning a passive income from real estate investments.”

The website and Motil’s social media accounts offered links to podcasts on Apple and YouTube entitled “The Cash Flow King, The Realest Real Estate Podcast,” hosted by “Doctor Motil.” Motil released approximately 147 episodes of the podcast, court documents say.

"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," said Mark Cave, associate director of the Division of Enforcement. "We are committed to holding those who prey on others accountable for their unlawful conduct."

Motil told multiple investors that they essentially would be “acting as a bank” because their funds would be secured by a first position mortgage lien on the property and they would receive interest payments and, at the end of the term, their principal, court documents say.

"Motil knew or recklessly failed to know that this was false," the complaint reads. "Motil also told investors on numerous occasions (sometimes in writing and sometimes orally) that after he received their investment he would record the mortgage with the county clerk, knowing or recklessly failing to know that this was false."

Alleged Ponzi scheme falls apart

Beginning in October 2017, Motil allegedly scammed more than 50 investors nationwide before the Ponzi scheme fell apart in early 2021. In March 2021, Motil stalled, emailing investors that he had "experienced consistent cash flow difficulties over the previous few months," the complaint reads. Motil wrote that he experienced a deficit between rent collections on the one hand, and money due to investors, banks, property repairs, and taxes on the other.

Motil told investors that he recorded a podcast predicting future events in the shifting landscape of landlording. However, Motil explained that he did not want to release his podcast and “let the world know” what was going on in the market before he “moved on our stuff,” the complaint reads.

At one point, Investor B became so frustrated, he posted comments on Motil’s Facebook page describing his negative experience, court documents say.

"Motil responded by blocking Investor B from posting anything more, and e-mailed Investor B that negative comments were not helpful in his effort to find a 'replacement' for Investor B," the complain reads. "In other words, Motil told Investor B that his negative posts were unhelpful in his efforts to lure another victim to invest."

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

© Entire contents copyright 2023 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.