SEC charges Cash Flow King podcast host with perpetrating $11M Ponzi scheme

According to the SEC's complaint, Motil told investors that he would pay the investors returns on their investments from profits from renovating, reselling, refinancing, and renting the properties. 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.

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 for his own extravagant personal expenses, including to rent a lakeside mansion, purchase courtside season tickets to NBA games, and make $400,000 in credit card payments for his wife, Amy Motil, who is named as a relief defendant.

"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," 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."

The SEC's complaint, filed in U.S. 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 complaint seeks injunctive relief, disgorgement plus prejudgment interest, civil money penalties, and an officer and director bar.

The SEC's Office of Investor Education and Advocacy has issued an Investor Alert with tips on how investors can avoid become a victim of fraud in self-directed IRAs.

The SEC's ongoing investigation is being supervised by Jeff Leasure and Mr. Cave. The SEC's litigation will be led by John Timmer under the supervision of James Carlson. The SEC acknowledges the assistance of the U.S. Trustee's Office, the U.S. Attorney's Office for the Northern District of Ohio, and the Ohio Division of Securities.

* * *

Original text here: https://www.sec.gov/news/press-release/2023-196