Former Jefferies Hedge Fund Manager Charged with $100M Water Machine Ponzi Scheme

A former Jefferies hedge fund manager, Jordan Chirico, has been charged with fraud for allegedly directing the purchase of $100 million in bonds tied to a non-existent water vending machine business. The SEC also filed a civil case against Chirico, alleging he violated his fiduciary duty and was aware of red flags. Chirico's lawyer called him a "victim," while the owner of the business, Ryan Wear, was also charged with fraud.

A former hedge fund manager at Jefferies Financial Group Inc., Jordan Chirico, has been charged with fraud by federal prosecutors in New York for allegedly directing the purchase of nearly $100 million in bonds tied to a water-vending machine business. The SEC has also filed a civil case against Chirico, alleging he violated his fiduciary duty and was aware of red flags [1].

Chirico is accused of directing the Jefferies fund, 352 Capital, to purchase bonds funding a Washington state business that purported to operate a network of water vending machines. However, in many cases, the machines did not exist, according to an indictment unsealed in New York federal court [2]. The owner of the business, Ryan Wear, was also charged with fraud for raising more than $200 million from investors by selling them the water vending machines [3].

Chirico's lawyer, Robert Gage, called his client a "victim" and not "the villain." Gage stated that a federal court had dismissed a nearly identical civil case earlier this year, and that they look forward to clearing Chirico's name in court [1].

The indictment comes after Jefferies sued Chirico, Wear, and others tied to the alleged scheme. The vending business, WaterStation Management, was forced into bankruptcy and has spawned a rash of civil lawsuits from investors who purchased the machines. In actuality, most of the machines either didn't exist or had been sold to more than one investor, according to bankruptcy records [1].

The cases are US v Chirico, 25-cr-365, SEC v Chirico, 25-cv-6715, and SEC v Wear, 25-cv-6713, in the US District Court, Southern District of New York.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-14/ex-jefferies-fund-manager-accused-of-water-machine-ponzi-scheme
[2] https://news.bloomberglaw.com/bankruptcy-law/ex-jefferies-fund-manager-accused-of-water-machine-ponzi-scheme
[3] https://www.justice.gov/usao-sdny/pr/defendants-charged-over-200-million-water-vending-machine-ponzi-scheme-and-related