I’ve now seen the best sales pitch for investors in a Ponzi scheme “Yo Homie! the MCAs are crankin!” delivered to an “investor” on Skype. This message came from Patch Baker. The MCAs are Merchant Cash Advances. That Skype chat is printed in paragraph 111 in the complaint against Mr. Baker and Joel J. Natario for stealing investors money.
According to the SEC complaint, Natario and Baker solicited and sold investments in a purported business venture involving merchant cash advances which are short term loans to small businesses in need of immediate capital. Natario and Baker proimised that investor proceeds would be used to fund a portion of the MCAs and that investors would earn rates of return from 16% to 18% for every twelve-week investment period. However, there was no MCA venture and very few MCAs were made. Returns paid to investors were financed primarily by other investors’ money. Not returns from MCAs.
According to the SEC complaint, the scheme started in February 2020. The scheme fell apart at the end of February 2021. According to the SEC, the venture’s checking account was down to less than $200. Investors filed suit in August 2022 which required them to pay back $5.65 million.
The SEC complaint coming in late to the party puts the scheme at a value of $10 million.
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