Latest news with #JordanChirico
Epoch Times
19 hours ago
- Business
- Epoch Times
US Charges Two in $275 Million Water Vending Machine Ponzi Case
NEW YORK--A Washington state entrepreneur and a former Jefferies portfolio manager were criminally charged on Thursday over a Ponzi scheme and related fraud involving water vending machines that totaled as much as $275 million, with military veterans among the victims, U.S. authorities said. Ryan Wear, the former owner of Water Station Management, was charged in Manhattan with securities and wire fraud. Jordan Chirico, who worked at Jefferies' Leucadia Asset Management unit, was charged with securities and investment adviser fraud.
Yahoo
2 days ago
- Business
- Yahoo
Ex-Jefferies Fund Manager Accused in Water-Vend Scam
(Bloomberg) -- A former Jefferies Financial Group Inc. hedge fund manager was charged with fraud by federal prosecutors in New York for allegedly directing the purchase of nearly $100 million in bonds tied to a water-vending machine business. The US-Canadian Road Safety Gap Is Getting Wider Festivals and Parades Are Canceled Amid US Immigration Anxiety Sunseeking Germans Face Swiss Backlash Over Alpine Holiday Congestion To Head Off Severe Storm Surges, Nova Scotia Invests in 'Living Shorelines' Five Years After Black Lives Matter, Brussels' Colonial Statues Remain Jordan Chirico is accused of directing the Jefferies fund, 352 Capital, to purchase bonds funding a Washington state business that purported to operate a network of water vending machines, according to an indictment unsealed Thursday in New York federal court. But in many cases, the machines didn't exist, prosecutors allege. The owner of the business, Ryan Wear, was also charged with fraud. Prosecutors said he helped raise more than $200 million from investors by selling them the machines. 'Ryan Wear raised hundreds of millions of dollars through false promises of a water-vending machine business that became nothing more than a scam that victimized retail investors, including military veterans,' interim Manhattan US Attorney Jay Clayton said. 'Jordan Chirico made matters worse by putting his own financial interests before his professional duties.' The US Securities and Exchange Commission filed a parallel civil case against Wear and his businesses and also made separate allegations that Chirico violated his fiduciary duty by investing the private fund in the alleged scheme. Chirico was aware of red flags and didn't disclose his conflicts of interest, the SEC said. Chirico's lawyer Robert Gage called his client a 'victim,' not 'the villain.' 'A federal court already dismissed a nearly identical civil case earlier this year in which Leucadia/Jefferies tried to scapegoat our client for an alleged scheme that deceived him along with hundreds of other investors and major institutions,' Gage said. 'We look forward to clearing Jordan's name in court.' Wear, 49, of Everett, Washington, didn't respond to a voicemail seeking comment. Missing Machines The indictment comes after Jefferies sued Chirico, Wear and others tied to the alleged scheme. The vending business, WaterStation Management, was forced into bankruptcy and has spawned a rash of civil lawsuits from investors who purchased machines. In actuality, most of the machines either didn't exist or had been sold to more than one investor, according to bankruptcy records. Bloomberg News reported in September that federal prosecutors in Manhattan were investigating Chirico. 352 Capital was part of Jefferies's Leucadia Asset Management. Chirico, 41, of Carmel, Indiana, is charged with investment adviser fraud, which carries a maximum sentence of five years in prison, and securities fraud, which has a top punishment of 20 years behind bars. Wear is charged with wire fraud and securities fraud, both of which carry 20-year sentences. Prosecutors allege that Chirico had personally invested more than $7 million in WaterStation, but never disclosed his stake while investing millions of the fund's assets in the company. The government said he also failed to reveal more than $90,000 in monthly payments he received or the $1.6 million he earned for referring friends and relatives to invest. According to the indictment, Chirico sold his interests back to WaterStation without revealing he was being paid by proceeds of the bond offering originating from the Jefferies fund and deliberately omitted that Wear owed him millions in loans and note repayments. Chirico had learned of issues at the company by the summer of 2023, and the following year, Wear admitted to him that thousands of the water machines collateralizing the bonds didn't exist and that he had misappropriated tens of millions of dollars in bond proceeds, prosecutors said. But instead of revealing the issues, Chirico directed the fund to buy another $19 million of additional bonds, the proceeds of which were partially used to repay Chirico, according to the government. 352 hasn't received any principal payments on nearly $107 million worth of WaterStation bonds, prosecutors said. The cases are US v Chirico, 25-cr-365, SEC v Chirico, 25-cv-6715, and SEC v Wear, 25-cv-6713, US District Court, Southern District of New York. --With assistance from Nicola M White and Ava Benny-Morrison. (Corrects spelling of Chirico in 14th paragrpah. Updates with details of charges and allegations by prosecutors.) 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Reuters
2 days ago
- Business
- Reuters
US charges two in $275 million water vending machine Ponzi case
NEW YORK, Aug 14 (Reuters) - A Washington state entrepreneur and a former Jefferies portfolio manager were criminally charged on Thursday over a Ponzi scheme and related fraud involving water vending machines that totaled as much as $275 million, with military veterans among the victims, U.S. authorities said. Ryan Wear, the former owner of Water Station Management, was charged in Manhattan with securities and wire fraud. Jordan Chirico, who worked at Jefferies' (JEF.N), opens new tab Leucadia Asset Management unit, was charged with securities and investment adviser fraud. The U.S. Securities and Exchange Commission filed related civil charges against both men and Water Station, saying the frauds spanned from late 2016 to early 2024. A lawyer for Wear did not immediately respond to requests for comment, while a lawyer for Water Station declined to comment. Robert Gage, a lawyer for Chirico, said in a statement: "Today's indictment has the story exactly backward. Jordan Chirico is not the villain. He's a victim. ... We look forward to clearing Jordan's name in court." Authorities said Wear, 49, of Everett, Washington, defrauded ordinary investors and veterans into buying more than 15,000 purported revenue-generating water machines, and sold bonds he falsely claimed were collateralized by his machines. According to court papers, Wear manufactured far fewer machines than he claimed, sold some to multiple investors, and used new money to repay earlier investors and cover personal expenses, including a home on Camano Island near Seattle. Chirico, 41, of Carmel, Indiana, allegedly breached his fiduciary duty to investors in Leucadia's 3/5/2 Capital ABS Master Fund, which he managed, by concealing conflicts of interest. Authorities said Chirico bought $107 million of Water Station bonds for the fund without revealing his $7 million stake in the company and millions of dollars of distributions and referral fees. Chirico allegedly also ignored "red flags" that many water machines did not exist, and made getting his own money back before his investors' money a higher priority. Leucadia is winding down the 3/5/2 fund, which has recovered none of its bond principal, authorities said. Water Station was forced into Chapter 11 bankruptcy last August, two months after Leucadia ended Chirico's employment, the SEC said. Jefferies and Leucadia were not charged. "The deception and obfuscation these two men allegedly engaged in to siphon funds from retail investors, even U.S. military veterans, is absolutely unconscionable," FBI Special Agent in Charge W. Mike Herrington said in a statement.
Yahoo
2 days ago
- Business
- Yahoo
US charges two in $275 million water vending machine Ponzi case
By Jonathan Stempel NEW YORK (Reuters) -A Washington state entrepreneur and a former Jefferies portfolio manager were criminally charged on Thursday over a Ponzi scheme and related fraud involving water vending machines that totaled as much as $275 million, with military veterans among the victims, U.S. authorities said. Ryan Wear, the former owner of Water Station Management, was charged in Manhattan with securities and wire fraud. Jordan Chirico, who worked at Jefferies' Leucadia Asset Management unit, was charged with securities and investment adviser fraud. The U.S. Securities and Exchange Commission filed related civil charges against both men and Water Station, saying the frauds spanned from late 2016 to early 2024. A lawyer for Wear did not immediately respond to requests for comment, while a lawyer for Water Station declined to comment. Robert Gage, a lawyer for Chirico, said in a statement: "Today's indictment has the story exactly backward. Jordan Chirico is not the villain. He's a victim. ... We look forward to clearing Jordan's name in court." Authorities said Wear, 49, of Everett, Washington, defrauded ordinary investors and veterans into buying more than 15,000 purported revenue-generating water machines, and sold bonds he falsely claimed were collateralized by his machines. According to court papers, Wear manufactured far fewer machines than he claimed, sold some to multiple investors, and used new money to repay earlier investors and cover personal expenses, including a home on Camano Island near Seattle. Chirico, 41, of Carmel, Indiana, allegedly breached his fiduciary duty to investors in Leucadia's 3/5/2 Capital ABS Master Fund, which he managed, by concealing conflicts of interest. Authorities said Chirico bought $107 million of Water Station bonds for the fund without revealing his $7 million stake in the company and millions of dollars of distributions and referral fees. Chirico allegedly also ignored "red flags" that many water machines did not exist, and made getting his own money back before his investors' money a higher priority. Leucadia is winding down the 3/5/2 fund, which has recovered none of its bond principal, authorities said. Water Station was forced into Chapter 11 bankruptcy last August, two months after Leucadia ended Chirico's employment, the SEC said. Jefferies and Leucadia were not charged. "The deception and obfuscation these two men allegedly engaged in to siphon funds from retail investors, even U.S. military veterans, is absolutely unconscionable," FBI Special Agent in Charge W. Mike Herrington said in a statement.
Bloomberg
2 days ago
- Business
- Bloomberg
Ex-Jefferies Fund Manager Accused of Water Machine Ponzi Scheme
A former Jefferies Financial Group Inc. hedge fund manager has been charged with fraud by federal prosecutors in New York for allegedly directing the purchase of nearly $100 million in bonds tied to a water-vending machine business. Jordan Chirico is accused of directing the Jefferies fund, 352 Capital, to purchase bonds funding a Washington state business that purported to operate a network of water vending machines, according to an indictment unsealed Thursday in New York federal court. But in many cases, the machines did not exist, prosecutors allege.
