CLEVELAND, Ohio — A North Olmsted house-flipper who called himself “The Cash Flow King” is accused in a lawsuit of running an $11 million Ponzi scheme that ripped off dozens of investors.
The U.S. Securities and Exchange Commission on Monday filed the lawsuit in federal court in Cleveland against Matthew Motil and his companies North Shore Equity Sales, The Marie Paul Co., North Shore Equity Management and other LLCs that Motil owned.
The lawsuit alleges Motil, 42, of running a nearly four-year scheme in which he falsely promised high returns to 60 investors on house-flipping ventures mostly around Cuyahoga County.
“Nearly everything about his scheme was a lie,” SEC attorney John Timmer wrote in the lawsuit.
The case was assigned to U.S. District Judge James Gwin. No attorneys are listed in court records for Motil, and attempts to reach him were not successful.
Motil is a licensed engineer, a self-described entrepreneur and real-estate expert, according to the lawsuit. He claimed to have a law degree in intellectual property, which he said he earned in one year from the University of Akron School of Law, the lawsuit said.
He marketed himself to investors on his website and on Facebook and LinkedIn, as well as on a website called biggerpockets.com. Motil told people that he helped hundreds of investors worldwide create “massive wealth through real estate,” according to the lawsuit.
On his website, he told people they could “Be a Real Estate Investing Bad A--,”that they could quit their jobs if they invested with him, according to the lawsuit.
Motil also hosted a podcast published on iTunes and YouTube called “The Cash Flow King, The Realest Real Estate Podcast” hosted by Doctor Motil, the lawsuit said.
He posted 147 episodes of the podcast, according to the lawsuit. During one episode highlighted in the lawsuit, Motil talked about the “huge level of responsibility” that comes with accepting money from investors, the lawsuit said.
Motil, according to the lawsuit, carried out the scheme from October 2017 through May 2021.
SEC officials said the scheme worked like this: Motil promised investors short-term, low-risk and high-return promissory notes using collateral from houses he bought around Cuyahoga County, including several in Cleveland and one in Parma.
He told investors that he would fix up the houses and either re-sell them, refinance them or turn them into rentals. The investors didn’t need to do anything but put up the money; he told them they would essentially be acting as banks who owned the property, according to the lawsuit.
Motil, however, took in millions of dollars from investors on each property, far more than the homes were worth. He bought one home in Parma for $47,000 and took in more than $1.3 million in investor money.
He never filed deeds with the county showing the investors owned any of the homes, according to the lawsuit.
Motil also was accused of forging the signature of a notary he had hired, according to court records. He forged the woman’s notary seal on at least 30 mortgages, court records say. Cuyahoga County prosecutors charged him with forgery in 2021, but they eventually dropped the charges.
Motil took the money from the scheme and spent it on $1.6 million worth of personal expenses, transferred another $400,000 to his wife and used $900,000 for other business ventures, according to the lawsuit.
The lawsuit said Motil spent:
- $107,000 for rent of a lakeside mansion.
- $73,000 on courtside seats to Cleveland Cavaliers games.
- $45,000 on student loans.
- $37,000 from purchases at Best Buy.
- $23,000 at Leeny’s Lean Body, a Westlake personal training service.
- $22,000 on iTunes.
- $14,000 at Starbucks.
- $13,900 at pizzerias.
He also used $58,000 in cash. He paid back about $3.7 million in Ponzi payments, the lawsuit said.
The investors who lost money to Motil included an active-duty U.S. Air Force lieutenant colonel from Texas, who complained publicly because he needed the payments Motil had promised him before he was deployed to Afghanistan.
Others included a cancer researcher from Florida and a Massachusetts woman who used her retirement accounts to invest with Motil.
The scheme collapsed in March 2022, and he filed for bankruptcy, according to the lawsuit.
The lawsuit seeks to recoup money for investors, stop Motil from ever becoming an officer or director of a public company and seek a judge’s order to force Motil to pay civil fines, among other remedies.
Adam Ferrise covers federal courts at cleveland.com and The Plain Dealer. You can find his work here.