Financial Podcaster Accused of Running Massive Ponzi Scheme
The host of a real estate investing podcast entitled Cashflow Kings has been indicted by the SEC for allegedly bilking 60 investors out of more than $11 million in a massive Ponzi scheme.
On his podcast, Motil positioned himself as a punk rock finance guru somewhere between Joe Rogan and Suze Orman. He told his listeners he would mold them into “real estate investing badass[es]…and build a business/lifestyle [they] love earning a passive income from real estate investments.”
According to the SEC’s complaint, Matthew Motil coerced his listeners into purchasing “short-term, low-risk, and high-return” lending notes. Investors were told they’d see a return after Motil had refurbished or sold the properties, but many of the homes simply didn’t exist. The report alleges Motil sold around $1.3 million in promissory notes to at least 20 investors that were all backed by a single $47,000 property.
Motil allegedly used the funds for a variety of personal expenses. He forked over $73,000 for court-side seats at Cleveland Cavaliers games; spent $14,000 each on pizza and Starbucks; shelled out another $22,000 on iTunes; blew $37,000 more at Best Buy; put $45,000 towards paying off his student loans; and spent $107,000 for the seven-month-rental of an opulent, lakeside residence. He burned another $400,000 paying off his wife’s credit card debt, and $3.7 million more on Ponzi payments.
Of the 60 investors Motil convinced to pour in their entire retirement funds and life savings, one was a retired Air Force officer and another a cancer researcher. After the scheme faltered last year, Motil filed for bankruptcy, hoping it would eradicate the millions in debt he owed his victims. Instead of identifying his investors as such in his filings, he called them “creditors” and attributed the personal dues to “guarantees of debts of [Motil] LLCs.”
Motil was charged on Monday with fraud, along with violating provisions of the Securities Act and Securities Exchange Act. “We are committed to holding those who prey on others accountable for their unlawful conduct,” Mark Cave, associate director of the SEC’s Division of Enforcement, said in a press release.
The maximum sentence for securities and commodities fraud is 25 years in prison, along with a fine. It's not yet known when Motil's trial will begin.