SEC Charges Cash Flow King Podcast Host with Perpetrating $11 Million Ponzi Scheme

The Securities and Exchange Commission (SEC) has taken legal action against Matthew Motil, the host of the podcast “The Cash Flow King,” on charges of orchestrating a fraudulent Ponzi scheme that raked in approximately $11 million from over 50 investors. This scheme purportedly involved promissory notes supposedly backed by residential properties.

According to the SEC’s complaint, Matthew Motil, hailing from North Olmsted, Ohio, allegedly deceived investors with enticing promises of low-risk, high-return promissory notes that were allegedly secured by first mortgages on residential properties scattered across Ohio. Motil promoted these investments on his website, encouraging potential investors to “be a real estate investing badass!” He also touted them on his podcast, assuring investors of their safety and the “first lien position” these investments held on the underlying real estate assets. Motil informed investors that their returns would come from the profits generated through property renovation, resale, refinancing, and renting. However, the SEC’s complaint alleges that Motil failed to secure the promised first lien positions for investors and frequently sold multiple promissory notes, all supposedly backed by the same property, to multiple investors. In one instance, Motil purportedly sold over $1 million in promissory notes to 20 investors, each note claiming to be collateralized by a property he had purchased for $47,000. Instead of using the funds for property renovation or investment purposes, Motil is alleged to have used investor money to make payments to previous investors in a classic Ponzi scheme fashion and for his extravagant personal expenses. These expenses included renting a lakeside mansion, acquiring courtside season tickets for NBA games, and covering $400,000 in credit card payments for his wife, Amy Motil, who is named as a relief defendant in the case.

Mark Cave, Associate Director of the Division of Enforcement, commented on the case, stating, “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. We are committed to holding those who prey on others accountable for their unlawful conduct.”

The SEC’s complaint, which was filed in the U.S. District Court for the Northern District of Ohio, charges Matthew Motil with violations of 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 of ill-gotten gains plus prejudgment interest, civil monetary penalties, and an officer and director bar.

In response to this case, the SEC’s Office of Investor Education and Advocacy has issued an Investor Alert providing tips on how investors can protect themselves from becoming victims of fraud in self-directed Individual Retirement Accounts (IRAs).