Carmel, IN – A Carmel, Indiana, man with a background in high-level finance is now at the center of a massive federal fraud case, accused of playing a role in an alleged $200 million-plus Ponzi scheme involving water vending machines, according to reporting from the Indianapolis Business Journal (IBJ). The case spans multiple states, federal agencies, and both criminal and civil courts.
Federal Charges Filed Against Carmel Investment Manager
The accused, Jordan Chirico, 41, is facing serious legal trouble after federal prosecutors alleged his involvement in a wide-ranging scheme that defrauded investors through misleading financial practices. Chirico, who previously worked as an investment fund manager, now faces criminal charges as well as multiple civil lawsuits connected to the alleged fraud and racketeering activity.
According to court filings, criminal charges were filed in August by the U.S. Attorney’s Office for the Southern District of New York. Chirico has been charged with one count of investment adviser fraud and one count of securities fraud. He has pleaded not guilty to both charges.
Career at New York Asset Management Firm
From 2020 to 2024, Chirico reportedly worked for Leucadia Asset Management LLC, a New York City-based asset-management firm. During his tenure, he managed a hedge fund known as the 352 Capital ABS Master Fund LP, commonly referred to as the 352 Fund.
Leucadia’s business model reportedly focused on large institutional investors, including pension funds, insurance companies, and sovereign wealth funds, placing significant responsibility and trust in Chirico’s role as a fund manager.
Alleged Conflict of Interest Raises Red Flags
Federal prosecutors allege that Chirico directed the 352 Fund to purchase approximately $100 million in bonds backed by Water Station Management LLC, a company based in Everett, Washington.
Court documents indicate that Chirico and his wife had personally invested in Water Station prior to the bond purchases. Prosecutors argue this created a serious conflict of interest, as the bond purchases allegedly provided Water Station with capital that allowed Chirico to cash out his own investment.
Leucadia Asset Management reportedly terminated Chirico in June 2024, months before federal charges were formally filed.
Water Station Collapse and Fraud Allegations
The alleged scheme unraveled when Water Station Management LLC collapsed. Prosecutors claim the company engaged in a deceptive business model, allegedly selling investors water vending machines that, in many cases, did not exist.
According to federal authorities, the operation relied on new investor money to sustain itself, a hallmark characteristic of a Ponzi scheme. Losses from the collapse are estimated to exceed $200 million, affecting institutional and public investors nationwide.
SEC Files Parallel Civil Case
The federal indictment against Chirico was filed on August 13 and unsealed the following day, coinciding with the U.S. Securities and Exchange Commission (SEC) filing a parallel civil enforcement action.
The SEC case mirrors many of the allegations outlined in the criminal indictment, accusing Chirico of violating federal securities laws. Neither Chirico nor his attorneys responded to multiple requests for comment from the Indianapolis Business Journal, according to the publication.
Indiana Public Retirement System Lawsuit Pending
Chirico is also named as a defendant in a civil lawsuit filed earlier this year in Hamilton County, Indiana, by the Indiana Public Retirement System (INPRS). The suit alleges that INPRS invested $100 million into the 352 Fund, funds that were later tied to the Water Station transactions.
That case remains pending, adding to the growing legal challenges Chirico faces across multiple jurisdictions.
Federal prosecutors have indicated the investigation remains active, and additional developments are expected as the criminal and civil cases move forward.
Should fund managers face stricter oversight when handling public and pension funds? Do you believe financial firms are doing enough to prevent conflicts of interest at this level?
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