Investors claim Everett firm used a Ponzi scheme
EVERETT — An Everett-based company accused of being a ponzi scheme is now facing a lawsuit in federal court.
The suit was filed in April through Snohomish County Superior Court, later amended in June and moved to federal court in August. The plaintiffs accused WaterStation Technology, based in Everett, of fraudulently raising $130 million from investors. The company advertised itself as providing single-use vending machines which dispensed filtered drinking water.
According to the amended complaint, WaterStation promised investors returns ranging from 12-20% and convinced the plaintiffs to take out loans to invest into the business. Ryan Wear, who resides in Snohomish County, was listed as WaterStation Technology’s owner along with more than 50 other LLCs named in the complaint. Wear told investors to obtain loans from regional banks who had ties to WaterStation, who paid the funds directly to the company. These loans were used to by WaterStation to purchase machines, which the company would then install and service, sending monthly revenue payments back to investors in exchange for a share of the profits. After WaterStation stopped making monthly revenue payments to the investors, the lenders still intended to collect on the original loans made to plaintiffs.
More than 90% of the machines sold to investors did not exist, plaintiffs alleged. Wear said in a response filed in May that he has a spreadsheet with over 17,000 lines, showing the location and status of the water machines by serial number, but said the information was highly proprietary and would only share it subject to protection for the information. Attorneys for Wear did not respond to an email seeking comment.
https://www.heraldnet.com/news/investors-claim-everett-firm-used-a-ponzi-scheme/
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