The US Securities and Exchange Commission (SEC) has charged Washington state businessman Ryan Wear and his companies, Water Station Management and Creative Technologies, for allegedly running two related Ponzi-like schemes that raised more than $275 million from over 250 investors between 2016 and 2024.

In a separate case, the SEC also charged Indiana-based portfolio manager Jordan Chirico, accusing him of breaching his fiduciary duty by investing client funds into the schemes despite conflicts of interest and warning signs.

According to the SEC’s complaint, Wear and his firms raised about $165 million from retail investors, including military veterans, by selling investment contracts tied to water vending machines that often did not exist or had already been sold. A second scheme, targeting institutional investors between 2022 and 2024, raised over $110 million through notes supposedly backed by the same machines. The SEC alleges more than $60 million of investor money was misappropriated to pay earlier investors and finance Wear’s other businesses.

Chirico is accused of steering his private fund client into purchasing Water Station notes while concealing his own personal investment in the venture. The SEC claims he caused the client to increase its holdings despite 'red flags' suggesting the water machine collateral may have been fabricated.

Corey Schuster, chief of the division of enforcement’s asset management unit at SEC, said: “Wear’s alleged scheme spanned more than seven years and ensnared hundreds of investors, including veterans who were solicited with higher guaranteed returns and exclusive financing options".

"Furthermore, it is fundamental to the advisory relationship that investment advisers like Chirico act in their clients’ best interests and disclose all material conflicts of interest. As alleged, Chirico failed to do so here while increasing his fund client’s investments in Water Station in the face of red flags.”

The complaints, filed in the Southern District of New York, charge the defendants with violating federal securities antifraud laws. The SEC is seeking injunctions, civil penalties, disgorgement of alleged gains, and a director and officer bar against Wear.