Federal prosecutors in New York and Washington state say an Everett man is accused of orchestrating a nationwide Ponzi scheme involving water vending machines that defrauded investors out of more than $200 million.
In an indictment unsealed Thursday, the U.S. Attorney’s Office for the Southern District of New York charged Ryan Wear, 49, the former owner of Water Station Management LLC, with securities and wire fraud.
Prosecutors say Wear sold investors on water vending machines that in many cases did not exist, using money from new investors to pay earlier ones while siphoning millions for personal use and other business ventures.
A separate superseding indictment charges Jordan Chirico, 41, of Carmel, Indiana — a former portfolio manager and investment adviser — with investment adviser fraud and securities fraud.
Prosecutors allege Chirico used his clients’ money to buy more than $100 million in Water Station bonds while hiding his personal financial ties to the company and, eventually, his knowledge that it was a scam.
Acting U.S. Attorney Teal Luthy Miller in Seattle said the scheme stretched “from the relatively small city of Everett, Washington, to the major financial markets in New York.”
According to prosecutors, Wear raised money by claiming each $8,500 investment funded a machine that would generate passive income.
Later, he sold bonds supposedly backed by thousands of machines.
In reality, investigators say far fewer machines were manufactured, some were sold to multiple investors, and many didn’t exist at all.
Machines that were deployed failed to produce the promised revenue.
When investors began asking questions, Wear allegedly ran the operation like a Ponzi scheme — using new investments to pay earlier ones.
Federal prosecutors say Water Station collapsed into bankruptcy in August 2024, causing at least $200 million in investor losses, including from military veterans.
Chirico’s alleged role involved steering his investment fund, 3|5|2 Capital ABS Master Fund LP — part of Jefferies Financial Group’s Leucadia Asset Management — to buy Water Station bonds while concealing that he had more than $7 million invested personally.
Prosecutors say Chirico was receiving over $90,000 a month from Water Station and had collected $1.6 million in referral fees for bringing in other investors.
By summer 2023, prosecutors say Chirico learned thousands of the machines could not be located.
In January 2024, Wear allegedly admitted to him that many didn’t exist and that tens of millions in bond proceeds had been misappropriated.
Instead of alerting his clients, Chirico allegedly directed the fund to buy another $19 million in Water Station bonds — money Wear allegedly used to pay Chirico.
Prosecutors say Chirico received more than $11 million in payments from April 2022 to February 2024.
The investment fund has not received any principal repayment on $106.9 million in Water Station bonds.
Wear faces up to 20 years in prison each for securities fraud and wire fraud.
Chirico faces up to five years for investment adviser fraud and up to 20 years for securities fraud.
The case is being handled by the Securities and Commodities Fraud Task Force in New York with assistance from the U.S. Attorney’s Office in Seattle.
The charges are allegations, and both men are presumed innocent unless proven guilty.
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