Federal authorities have unsealed indictments charging Ryan Wear, the former owner of Water Station Management LLC, and Jordan Chirico, a former fund portfolio manager and investment adviser, in connection with an alleged Ponzi scheme involving water vending machines that led to over $200 million in investor losses. The case is being overseen by U.S. District Judge Jennifer L. Rochon.
According to the charges, Wear raised more than $200 million from investors by selling them interests in water vending machines, many of which did not exist. He allegedly used new investor funds to pay earlier investors and diverted millions for personal expenses and to expand his traditional vending machine business. When he could no longer raise sufficient funds, Water Station declared bankruptcy in August 2024.
Chirico is accused of causing the 3|5|2 Capital ABS Master Fund LP—an investment fund associated with Jefferies Financial Group’s Leucadia Asset Management—to invest nearly $100 million in Water Station bonds while concealing his own financial interests and knowledge of the fraud. Prosecutors allege that Chirico continued to direct investments into Water Station even after learning that thousands of machines collateralizing the bonds did not exist.
“Ryan Wear raised hundreds of millions of dollars through false promises of a water vending machine business that became nothing more than a scam that victimized retail investors, including military veterans,” U.S. Attorney Jay Clayton said. “Jordan Chirico made matters worse by putting his own financial interests before his professional duties, investing clients’ money in Water Station—helping himself and hurting his investors—even after he knew it was a scam. One fraud does not excuse another. With the assistance of our dedicated law enforcement partners and our colleagues throughout the Department of Justice, this Office will continue to aggressively pursue financial frauds on Wall Street and Main Street.”
“From the relatively small city of Everett, Washington, to the major financial markets in New York, this fraud scheme had a broad reach,” said Acting U.S. Attorney Teal Luthy Miller. “We appreciate our partnership with the Southern District of New York on this investigation.”
“The greed and deception of this Ponzi scheme has resulted in the same way they have throughout history, with unwitting investors seeing their hard-earned money grossly misused, and the scammers arrested and held accountable for their crimes,” said USPIS Inspector in Charge Daniel Brubaker. “Postal Inspectors, along with our law enforcement partners, will continue to aggressively investigate and disrupt criminals from defrauding the American public.”
“The scale of this fraud, which resulted in at least $200 million in losses, is simply staggering,” said FBI Special Agent in Charge W. Mike Herrington. “And the deception and obfuscation these two men allegedly engaged in to siphon funds from retail investors, even U.S. military veterans, is absolutely unconscionable. FBI Seattle is committed to working with our law enforcement partners throughout Washington state and the nation to hold accountable those who abuse investors’ trust and defraud them of their hard-earned savings.”
Wear faces charges including securities fraud and wire fraud; each count carries a maximum sentence of 20 years if convicted. Chirico is charged with investment adviser fraud (maximum five years) as well as securities fraud (maximum 20 years). Sentencing will be determined by a judge if there are convictions.
U.S. Attorney Jay Clayton recognized contributions from several agencies involved in investigating this case: United States Postal Inspection Service (USPIS), Federal Bureau of Investigation (FBI), Internal Revenue Service-Criminal Investigation (IRS-CI), Small Business Administration Office of Inspector General (SBA OIG), Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG), as well as cooperation from both the Western District of Washington U.S. Attorney’s Office and U.S Securities and Exchange Commission.
Assistant U.S. Attorneys Adam S. Hobson and Justin V. Rodriguez are prosecuting alongside Dane Westermeyer from the Western District of Washington.
The defendants are presumed innocent unless proven guilty.
