SEC Files Charges Against Ryan Wear, Affiliates, and Portfolio Manager Jordan Chirico
The U.S. Securities and Exchange Commission (SEC) has filed charges against Ryan Wear—of Marysville, Washington—and his affiliated entities, Water Station Management LLC and Creative Technologies, Inc., for orchestrating two interconnected Ponzi-like fraud schemes between September 2016 and February 2024. The schemes allegedly raised over $275 million from more than 250 investors, spanning both retail and institutional participants.
In a separate but related action, the SEC also charged Jordan Chirico—a portfolio manager based in Carmel, Indiana—for breaching his fiduciary duties. The regulator alleges Chirico invested his private fund clients in Wear’s scheme despite undisclosed conflicts of interest and his awareness of warning signs indicating potential fraud.
The Fraud Schemes: Two Phases of Deception Centered on “Water Machines”
According to the SEC’s complaint, Wear and his entities executed the fraud in two distinct but linked phases, both centered on false claims about “water machines” as investment collateral:
Retail Investor Scheme (Sept 2016 – Sept 2023)
The first scheme targeted retail investors—including military veterans—raising over $165 million. Defendants marketed investment contracts under the pretense that investors were purchasing water machines, which would generate steady revenue through operations. In reality, thousands of the purported water machines either did not exist or had already been sold to other investors, the SEC alleges. Veterans were specifically solicited with promises of “higher guaranteed returns” and “exclusive financing options,” tactics the SEC criticized as exploitative.
Institutional Investor Scheme (Apr 2022 – Feb 2024)
The second phase shifted to institutional investors, raising more than $110 million through the sale of Water Station notes. These notes were falsely represented as being secured by water machines—yet, as with the retail scheme, most of the claimed collateral either did not exist or was not owned by Water Station, the complaint states.
Over $60 Million in Investor Funds Misappropriated
The SEC further alleges that Wear and his entities misappropriated over $60 million of investor funds. A portion of this money was used for “Ponzi-like payments” to earlier investors (to create the illusion of legitimate returns), while the rest funded Wear’s unrelated business ventures—including Refreshing USA, LLC and Ideal Property Investments LLC, both named as “relief defendants” in the case (entities that benefited from the fraud but are not accused of direct misconduct).
Portfolio Manager Jordan Chirico’s Fiduciary Breach
Jordan Chirico’s role in the scheme, per the SEC’s separate complaint, involved violating core duties to his private fund clients. The regulator claims:
Chirico directed his fund to purchase Water Station notes without disclosing his significant personal investment in Wear’s business—a material conflict of interest that clients were entitled to know.
Even after noticing “red flags” (including signs that the purported water machine collateral might be fabricated), Chirico caused the fund to substantially increase its investments in the notes, prioritizing his own interests over those of his clients.
SEC’s Enforcement Actions and Parallel Criminal Charges
SEC Official Highlights Severity of Misconduct
Corey Schuster, Chief of the SEC’s Division of Enforcement Asset Management Unit, emphasized the severity of the alleged misconduct:
“Wear’s scheme spanned more than seven years and ensnared hundreds of investors—including veterans lured by false promises. For advisers like Chirico, acting in clients’ best interests and disclosing conflicts is non-negotiable. His failure to do so, while doubling down on a questionable investment, violates the trust at the heart of the advisory relationship.”
SEC’s Relief Requests
The SEC filed its complaints in the U.S. District Court for the Southern District of New York, charging all defendants with violating the antifraud provisions of federal securities laws. The regulator is seeking:
Injunctive relief to bar future violations;
Civil penalties against Wear, his entities, and Chirico;
Disgorgement of all ill-gotten gains (including profits from the fraud) from defendants and relief defendants;
A permanent bar prohibiting Wear from serving as an officer or director of any public company.
Coordinated Civil and Criminal Actions
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Wear and Chirico on the same day, marking a coordinated effort between civil and criminal authorities to address the fraud.
