Washington, D.C. – Federal authorities have charged the founder of a Washington-based water machine manufacturer and a portfolio manager in connection with a $275 million fraud scheme that spanned nearly eight years and affected more than 250 investors.
According to the Securities and Exchange Commission (SEC), Ryan Wear of Marysville, Washington, and his companies—Water Station Management LLC and Creative Technologies, Inc.—ran two interconnected Ponzi-like schemes between 2016 and early 2024. The SEC also filed separate charges against Jordan Chirico, a portfolio manager from Carmel, Indiana, alleging that he breached his fiduciary duty by steering his private fund client into the scheme while hiding personal conflicts of interest.
The SEC alleges that Wear and his companies raised over $165 million from primarily retail investors, including U.S. military veterans, by selling investment contracts supposedly tied to revenue-generating water machines. However, thousands of the machines were either nonexistent or had already been sold to other investors, the complaint states.
In a second phase of the scheme, which targeted institutional investors from April 2022 to February 2024, Wear and his firms reportedly raised another $110 million through notes allegedly secured by water machines that also largely did not exist or were not owned by the company. More than $60 million of the total funds raised was allegedly misused to pay earlier investors and support other business ventures operated by Wear, including Refreshing USA, LLC, and Ideal Property Investments LLC.
“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,” said Corey Schuster, Chief of the SEC’s Asset Management Unit.
Chirico, meanwhile, is accused of failing to disclose his own significant investment in Water Station while directing his fund client to increase its exposure to the company, despite signs that the underlying assets may have been fabricated.
“It is fundamental to the advisory relationship that investment advisers like Mr. Chirico act in their clients’ best interests and disclose all material conflicts of interest,” Schuster added.
Both Wear and Chirico are being charged with violating anti-fraud provisions of federal securities laws. The SEC is seeking injunctions, civil penalties, and the return of ill-gotten gains. It is also pursuing an officer and director bar against Wear.
