The Securities and Exchange Commission (SEC) has charged a popular life-coaching podcaster, Cash Flow King, with defrauding 11 million dollars in a Ponzi scheme.
According to the SEC’s complaint, Cash Flow King – real name John Castillo – promised investors high returns by falsely reporting returns of between 25 percent – 30 percent on investments made with the recovered funds. Castillo and his companies, from 2014 to 2018, allegedly used some of the funds they collected to purchase luxurious items such as cars, jewelry, and clothing.
While investors were promised high rates of return, the funds were not invested and instead were misappropriated to buy luxury items, pay back older investors and pay Castillo’s personal expenses.
In addition, Castillo continued to solicit new investments and use them to perpetuate the Ponzi Scheme. As a result, investors lost most of their investing money.
The SEC is charging Castillo with violating the anti-fraud provisions of the federal securities laws. It seeks repayment of ill-gotten gains, penalties, and other sanctions, including bars from the securities industry and from serving as an officer or director of a public company.
The SEC urges other investors to be careful when considering an investment from someone making seemingly too-good-to-be-true promises, and to always seek out a trusted financial professional and verify information with the SEC’s EDGAR database.
Cash Flow King’s actions are a stark example of how individuals can be tricked by such schemes and may cause investors to lose a lot of money. Therefore, it is vital to always research thoroughly before investing.