The Securities and Exchange Commission has filed an enforcement action against Matthew Motil, known as the Cash Flow King, for allegedly fraudulently raising around $11 million from over fifty investors as part of a Ponzi scheme involving real estate backed notes.
Motil fraudulently promised investors low-risk, high-return promissory notes that he claimed were collateralized by first mortgages on real property, per the SEC. The SEC further contends in its complaint that Motil touted and marketed the promissory notes on his website, as well as on his podcast, where he represented to investors that the notes were safe and secure, and backed by a first-lien position on the properties.
The SEC further alleged that Motil advised investors that he would pay returns on their investments generated from profits on the renovation, resale and rentals of the real estate; however, Motil, in truth, did not have such first lien position as represented, and often sold multiple notes to investors on the very same property. To compound the alleged egregious conduct, the SEC also claimed in its enforcement lawsuit that Motil utilized investor capital to make Ponzi scheme payments to prior investors, as well as for his own personal use, including NBA courtside tickets and the rental of a mansion.
Notably, in its litigation release, the SEC highlighted the fact that Motil used his social media presence and podcast show to boost his reputation as an investment expert, while targeting investor retirement assets, including those invested through self-directed IRAs. The SEC, through its Investor Education and Advocacy Office, issued an investor alert with advice on how the investing public can detect, and thus avoid becoming a victim of, self-directed IRA fraud.
The SEC’s complaint alleges violations by Motil of the registration and antifraud provisions of the Securities Act of 1933, as well as the antifraud provisions of the Securities Exchange Act of 1934. The SEC is requesting the return of ill-gotten gains, civil penalties, permanent injunctions and an officer and director bar.
Help from a Ponzi Scheme Defense Lawyer
David Chase, Esq., a SEC defense lawyer and former SEC prosecutor, represents individuals and companies under SEC investigation or those who have just received a SEC subpoena. David has successfully defended those under investigation for insider trading, Ponzi schemes, crypto fraud and market manipulations. You may contact David toll-free at: 800-760-0912 or e-mail at: firstname.lastname@example.org, and can visit the Firm’s website for more information and content at: www.securitiesfrauddefense.com.