SEC Charges Podcaster Matthew Motil in Alleged Ponzi Scheme

The Securities and Exchange Commission (SEC) has taken legal action against Matthew Motil, the host of “The Cash Flow King” podcast, for allegedly defrauding investors in an $11 million Ponzi scheme.

Motil is accused of raising funds from over 50 investors through the sale of promissory notes that were supposedly backed by residential properties, the SEC said in a Monday (Sept. 25) press release.

According to the SEC’s complaint, Motil, based in North Olmsted, Ohio, enticed investors by offering low-risk, high-return promissory notes that were claimed to be secured by first mortgages on residential properties across Ohio, the release said. He promoted these investments on his website and podcast, assuring potential investors of their safety and the backing of a “first lien position” on the underlying real estate assets.

However, the SEC alleges that Motil engaged in fraudulent activities instead of fulfilling his promises, according to the release. The SEC’s complaint states that Motil sold multiple promissory notes allegedly backed by the same property to multiple investors. For instance, he sold over $1 million of promissory notes to 20 investors, and each note claimed to be collateralized by a property he had acquired for $47,000.

Instead of using investor funds for property renovations as promised, Motil allegedly used the money to make Ponzi payments to previous investors and for personal expenses, including renting a lakeside mansion, purchasing courtside season tickets to NBA games, and making substantial credit card payments for his wife, the release said.

The SEC’s complaint, filed in the U.S. District Court for the Northern District of Ohio, charges Motil with violating the registration and antifraud provisions of the Securities Act of 1933 and the antifraud provisions of the Securities Exchange Act of 1934, per the release. The SEC seeks injunctive relief, disgorgement with prejudgment interest, civil money penalties, and an officer and director bar.

Consumers lost $8.8 billion to various fraud schemes in 2022 — a total that was 30% higher than the previous year’s tally, the Federal Trade Commission (FTC) reported in March.

Investment scams accounted for a significant share of those ill-gotten gains, siphoning off more than double the total they amounted to in 2021, the FTC said at the time.