Home Agent “Cash Flow King” Took Millions In Ponzi Scheme, According To SEC

“Cash Flow King” Took Millions In Ponzi Scheme, According To SEC

by admin
0 comment

“Nearly everything about his scheme was a lie,’” the SEC says in new charges against the investor, who raised money to buy homes in northern Ohio.

No one can predict the future of real estate, but you can prepare. Find out what to prepare for and pick up the tools you’ll need at Virtual Inman Connect on Nov. 1-2, 2023. And don’t miss Inman Connect New York on Jan. 23-25, 2024, where AI, capital and more will be center stage. Bet big on the future and join us at Connect.

A supposed real estate investor who ran a podcast dubbing himself the “Cash Flow King” was really fueling his business by running a Ponzi scheme, according to new charges filed this week by the U.S. Securities and Exchange Commission.

Matt Motil operated his business from Cleveland, where he was scooping up homes with money raised from smaller investors.

During his 2017-2021 run, Motil raised over $11 million from five dozen investors across the country in what the SEC called a classic Ponzi scheme that defrauded investors.

“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,” said Mark Cave, associate director of the division of enforcement. “We are committed to holding those who prey on others accountable for their unlawful conduct.”

“Nearly everything about his scheme was a lie,” the SEC said.

In one case, Motil raised over $1.3 million from at least 20 investors, the SEC said. He issued the same number of promissory notes, which were all tied to one single-family house Motil bought for $47,000.

“Despite promising many investors that he would record their mortgages, Motil failed to do so,” the SEC said.

When the Ponzi scheme collapsed, Motil filed for bankruptcy protection in March 2022, the SEC said. It alleges that the filing was an attempt to avoid repaying investors in the scheme.

“Ultimately, Motil used investor funds to (1) make over $3.7 million in Ponzi payments; (2) spend over $1.6 million on personal expenses; (3) divert over $900,000 of investors’ money to other businesses unrelated to real estate, and (4) route hundreds of thousands more to his wife, Amy Doubrava Motil,” the SEC said.

Motil also rented a lakeside mansion, bought season tickets to the Cleveland Cavaliers, paid student loans and spent over $1 million on credit cards. 

According to the SEC, Motil created multiple bank accounts that investors would put money into. He would then use the funds to disperse Ponzi payments, as well as for his own personal purchases. 

Motil told investors that he would use their money to flip or rent homes in the Cleveland area.

“Motil often told investors that the county clerks were backlogged and that it took several weeks or months to send their recorded mortgages,” the SEC said. “But Motil was just buying time. He knew that county clerks could not possibly mail a copy of the recorded mortgages because, among other things, Motil rarely recorded the mortgages.”

Email Taylor Anderson

Get Inman’s Property Portfolio Newsletter delivered right to your inbox. A weekly roundup of news that real estate investors need to stay on top, delivered every Tuesday. Click here to subscribe.

You may also like