Posted August 21, 2024 by Alan Rosca Esq.
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Attention 352 Fund investors: contact investor lawyers for a free evaluation of your potential claims for compensation today.
✓ Are you an investor in 352 Capital ABS Master Fund LP (“352 Fund” or “Fund”)?
✓ Are you concerned you may have lost money as a result of 352 Fund’s investments in notes issued by Water Station Management LLC (“Water Station”)?
✓ Are you concerned about the fraud and breach of fiduciary duty charges recently brought by the U.S. Securities and Exchange Commission (“SEC”) against 352 Fund’s portfolio manager, Jordan Chirico?
✓ Are you concerned about the SEC’s Ponzi scheme allegations concerning Water Station and its founder, Ryan Wear?
✓ Would you like your potential options for compensation to be reviewed by an experienced team of investor lawyers?
Request a free case evaluation of your potential claims for compensation today, via email at arosca@rscounsel.law, through the contact form on this page, or by calling 888-998-0530.
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Free Case Evaluation
Posted August 21, 2024 by Alan Rosca Esq.
Following the recent fraud charges by the U.S. Attorney’s Office for the Southern District of New York, and parallel breach of fiduciary duty allegations by the SEC against Jordan Chirico, the Rosca Scarlato LLC investor rights lawyers – led by Alan Rosca and Paul Scarlato, partners and investor advocates who often represent victims of Ponzi schemes, investment fraud and other investment-related misconduct – have launched an investigation on behalf of investors. They are currently evaluating potential claims for compensation for investors in the 3|5|2 Capital ABS Master Fund LP (“352 Fund”) managed by Jordan Chirico, in connection with the Fund’s investment in Water Station notes.
352 Fund investors interested in an evaluation of potential options to seek compensation and/or pursue claims related to 352 Fund’s investments in Water Station notes may contact investor right attorneys Alan Rosca or Paul Scarlato. Claims that are not timely pursued may expire or otherwise be lost, generally speaking.
All consultations are free. The Rosca Scarlato attorneys typically take cases like this on a contingency fee basis, advance all case costs, and only get paid for their fees and expenses if and when they are successful.
To reach attorney Alan Rosca or his colleagues, investors may call 888-998-0530, email arosca@rscounsel.law (Alan Rosca), or leave a message through the contact form on this webpage.
Key Takeaways
Potential Compensation Claims
On August 13, 2025, a sealed superseding indictment was filed in the United States District Court for the Southern District of New York against Jordan Chirico, of Carmel, Indiana, accusing him of investment adviser fraud and securities fraud. According to the indictment under review by investor rights lawyers at Rosca Scarlato, Chirico, while serving as portfolio manager for the 352 Fund, allegedly engaged in a scheme to defraud the fund and its investors by directing investments into “a Ponzi scheme masquerading as a water machine company.”
The indictment alleges that Chirico failed to disclose conflicts of interest and material information about the investments, leading to significant losses for the fund. The allegations span from approximately 2020 to June 2024 and involve investments totaling over $92 million in bonds issued by Water Station Management, LLC, a company reportedly operating as a Ponzi scheme that raised over $275 million overall from investors, according to a related press release by U.S. Attorney’s Office for the Southern District of New York dated August 14, 2025.
According to the indictment, Chirico allegedly served as the portfolio manager for the 352 Fund, a hedge fund under Jefferies Financial Group’s Leucadia Asset Management LLC (“LAM”), where he was entrusted with managing hundreds of millions of dollars on behalf of investors. In his capacity as 352 Fund portfolio manager, Chirico owed fiduciary duties of loyalty and care to the fund and its investors, including the obligation to fully disclose material facts and avoid conflicts of interest, according to the indictment.
The indictment further alleges that Chirico had a significant personal stake in Water Station, a company that marketed and serviced water dispensing machines known as WST-700 (“Water Machines”). Reportedly, Chirico invested over $7 million in Water Machines through his company, C3 Capital, Inc., and received monthly payments exceeding $90,000, as well as over $1.6 million in referral fees for introducing friends and family to Water Station‘s joint venture program. The indictment alleges that Chirico directed the 352 Fund and its affiliates to invest nearly $100 million in Water Station bonds without disclosing these personal interests or other conflicts, such as loans he made to Water Station‘s owner, Ryan Wear, and repayments he received that allegedly took priority over bondholders.
The indictment states that by summer 2023, Chirico allegedly learned of serious issues at Water Station, including the non-existence of thousands of Water Machines supposed to collateralize the bonds. Despite this, he reportedly failed to inform the 352 Fund or its investors and instead directed additional investments, some of which allegedly benefited him personally. Water Station ultimately collapsed, allegedly defaulting on its obligations, and the 352 Fund has not received principal payments on its $106 million of Water Station bonds for which it paid over $92 million.
Chirico faces two counts: Count One for investment adviser fraud and Count Two for securities fraud. The indictment also includes forfeiture allegations for proceeds traceable to the alleged offenses.
On August 14, 2025, SEC filed a civil complaint in the United States District Court for the Southern District of New York against Jordan Chirico, bringing substantially similar allegations. According to the SEC complaint, Chirico, as an investment adviser and portfolio manager for the 352 Fund at Leucadia Asset Management, allegedly breached his fiduciary duties of loyalty and care by directing the fund into conflicted investments in Water Station Notes without disclosing his personal financial interests and by failing to act in the fund’s best interests after becoming aware of red flags indicating potential fraud at Water Station.
The complaint alleges that Chirico coordinated the issuance of Water Station Notes starting in late 2021 and directed the 352 Fund to invest over $90 million in these notes between April 2022 and February 2024 without disclosing his conflicts, including the buyout of his own investment using note proceeds and millions in personal loans to Ryan Wear.
Furthermore, the SEC complaint alleges that by at least August 2023, Chirico was aware of issues with the notes’ collateral, such as the inability to locate over 3,000 purported water machines, yet he allegedly increased the fund’s exposure while prioritizing personal repayments and concealing these facts from Leucadia and the Fund.
The SEC seeks a permanent injunction against future violations, disgorgement of ill-gotten gains with prejudgment interest, civil monetary penalties, and a permanent bar preventing Chirico from acting as or associating with any investment adviser, broker, or dealer.
Potential Compensation Claims
“352 Capital ABS Master Fund investors may be able to seek compensation from banking and/or financial industry entities that may have facilitated or failed to prevent the investments in the Water Station alleged Ponzi scheme,” said attorney Alan Rosca, a Rosca Scarlato partner and veteran investor advocate.
Investor rights attorneys Alan Rosca and Paul Scarlato have reviewed a significant volume of records related to this matter and are evaluating claims for compensation on behalf of investors in the 352 Fund who believe they may have suffered losses as a result of Jordan Chirico’s alleged breach of fiduciary duty in connection with the Fund’s investment in Water Station Notes. They have decades of combined experience seeking compensation related to investor harm and pursuing claims arising out of alleged violations of securities law, investment fraud, and/or Ponzi schemes.
Investors interested to learn more about their options or assist the Rosca Scarlato attorneys’ investigation, as well as any individuals with knowledge of the facts surrounding the 352 Fund’s investments in Water Station alleged Ponzi scheme, may contact attorneys Alan Rosca or Paul Scarlato to learn more about their rights and for an evaluation of potential claims, or to provide useful information. All consultations are free.
The Rosca Scarlato attorneys typically take cases like this on a contingency fee basis, advance all case costs, and only get paid for their fees and expenses if and when they are successful.
To reach attorney Alan Rosca or his colleagues, 352 Fund investors may call 888-998-0530, email arosca@rscounsel.law (Alan Rosca), or leave a message through the contact form on this webpage.
The general considerations on this page are for informational purposes only and do not constitute legal advice. Such legal advice can only be offered once the attorneys discuss each investor’s situation, learn of the relevant facts, and can tailor any advice to that investor’s facts. This page is not affiliated with 352 Capital ABS Master Fund LP, 352 Capital GP LLC, Water Station Management LLC, Leucadia Asset Management LLC, Creative Technologies, LLC, C3 Capital, Inc., Jefferies Strategic Investments, LLC, or any other related person or entity. There has not been an adjudication on the merits of any allegations referenced on this page, as of the date of the posting.
The timeline presented below reconstructs the sequence of key events alleged in the criminal superseding indictment filed by the U.S. Department of Justice on August 13, 2025 (Case 1:25-cr-00365-JLR, Southern District of New York), and the civil complaint filed by the Securities and Exchange Commission on August 14, 2025 (Case 1:25-cv-06715, Southern District of New York), both of which are currently pending:
Investors should review the underlying case records and consult the case dockets for the most recent developments in this matter.
Ex-Jefferies hedge fund manager charged in $100m bond fraud case, published by Hedgeweek on August 18, 2025
Dirty Water: Inside the ‘Largest Franchise Fraud in the History of the United States’, published by Barron’s on August 15, 2025
Founder and Owner of Washington-Based Water Machine Manufacturer and Two Companies Charged in $275 Million Fraud Scheme, published by the SEC on August 14, 2025
Defendants Charged In Over $200 Million Water Vending Machine Ponzi Scheme And Related Investment Fraud, published by the U.S. Attorney’s Office, Southern District of New York on August 14, 2025
Ex-Jefferies Fund Manager Accused in Water-Vend Scam, published by Bloomberg Law on August 14, 2025
Founder of water vending machine company, portfolio manager, charged in $275M Ponzi scheme, published by Investment News on august 14, 2025
Former Jefferies Hedge Fund Manager Charged with $100M Water Machine Ponzi Scheme, published by AI Invest on August 14, 2025
Ex-Jefferies fund manager faces criminal investigation over alleged Ponzi-like scam, published by Fortune on September 13, 2024
Jefferies Winds Down Hedge Fund 352 Capital in Wake of Lawsuit, published July 11, 2024
SEC v. Chirico Complaint dated August 14, 2025
USA v. Chirico Criminal Complaint (Superseding Indictment) dated August 13, 2025
In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow matters about which we report, and/or to publish subsequent updates regarding various developments that may occur in such matters. Readers are encouraged to conduct their own research regarding any such matters and any developments that may or may not have occurred in such matters. Also, the Brokercheck report linked to some of our blogs is the up-to-date version as of the date of accessing by the reader. The information in our blogs is current as of the date of the drafting of the blog, and given that sometimes certain past complaints may no longer be listed in newer Brokercheck reports, some of the events referenced in some of our blogs may later on be removed from newer Brokercheck reports. Visitors may check the most recent version of each brokercheck report at www.finra.org, and may contact FINRA for the earlier version of the Brokercheck report upon which various blogs may be based.