SEC v. Joel J. Natario; and Jefferson Scott (a/k/a "Patch") Baker, No. 2:25-cv-00895, District of Nevada (May 23, 2025) — Complaint

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Nicholas C. Margida (VA Bar No. 73176)
Securities and Exchange Commission
100 F Street, N.E.
Washington DC 20549
Email: [email protected]
Telephone: (202) 551-8504
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

vs.
JOEL J. NATARIO and
JEFFERSON SCOTT (a/k/a “PATCH”)
BAKER,

Defendants.

Case No. 25-CV-00895

COMPLAINT

JURY DEMAND

Plaintiff Securities and Exchange Commission (the “SEC”), for its Complaint against
Defendants Joel J. Natario (“Natario”) and Jefferson Scott (a/k/a “Patch”) Baker (“Baker”)
(collectively, “Defendants”), alleges as follows:
JURISDICTION AND VENUE
1. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), and
22(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)],
and Sections 21(d)(1), 21(d)(3)(A), 21(e), and 27(a) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e), and 78aa(a)].
2. In connection with the conduct alleged in this Complaint, Defendants have, directly
or indirectly, made use of the means or instrumentalities of interstate commerce, of the mails, or of
the facilities of a national securities exchange.
3. Venue is proper in this district pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)], and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)], because some of the

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transactions, practices, or courses of conduct constituting violations of the federal securities laws
occurred within this district.
4. For example, during the time of the conduct alleged in the Complaint, the relevant
securities were offered and sold in this district, and Defendants solicited certain investors residing in
this district.  Further, Defendants used the bank accounts of a Nevada corporation headquartered in
this district to obtain and misappropriate investor funds and carry out the fraudulent scheme.
SUMMARY
5. This is a civil enforcement action concerning a fraudulent scheme—featuring Ponzi
payments whereby early investors were paid returns from later investors’ money—carried out by
Defendants beginning no later than February 2020 and continuing through at least August 2021.
During that period, Defendants lied repeatedly to investors, including about how investor funds
would be used, and engaged in other fraudulent and deceptive conduct.
6. Between February 2020 and February 2021, Natario and Baker defrauded
approximately 23 investors out of more than $10 million, soliciting and selling investments in a
purported venture involving merchant cash advances (“MCAs”)—short-term loans to small
businesses in need of immediate capital.  Natario and Baker developed written purchase agreements
they provided to investors and later signed.  In those purchase agreements, they falsely promised
investors that their money would be placed in MCAs and that the investors would earn 16% to 18%
returns for every 12-week investment period.  However, unbeknownst to investors, but as Natario
and Baker each knew, or were reckless in not knowing, there were no MCAs and thus no MCA
venture.  And any purported returns paid to investors were financed, not from any actual MCA
transactions, but with other investors’ money through Ponzi payments.
7. Natario and Baker had clear roles in carrying out this fraudulent scheme.  Natario,
through the bank accounts of a Nevada company he acquired at the end of 2019, received and
controlled all invested funds, and made all the Ponzi payments in furtherance of the scheme.  Baker,
meanwhile, solicited investors in the purported MCA venture, mostly from a private networking
group of entrepreneurs in Tampa, Florida, to which he belonged.
8. In addition to the false and misleading statements he and Natario made in the written

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purchase agreements, Baker also told investors, among other misrepresentations, that the default
rate for the MCA loans (that were never actually made) was minimal, miniscule, or four percent
(depending on which investor he was misleading at the time).  Baker also told investors he had
personally invested millions of dollars in the MCA venture and had taken out a home equity line of
credit to do so—statements that Baker knew to be false and misleading.  Incredibly, Baker—in
soliciting a $250,000 investment from a Nevada resident (Investor G, see infra § II(E)) in or around
September 2020—falsely represented that he had invested over $45 million in the MCA venture.
9. Ultimately, Natario used nearly $3 million in investor funds to make purported
“interest” (but, really, Ponzi) payments to investors, creating the false and misleading appearance
that the MCA venture was successful.  As a result, many investors, at Baker’s urging, chose to “roll
over” their principal and interest into new MCA investments, enabling Defendants to perpetuate the
scheme.
10. Defendants also used investor funds to enrich themselves.  Natario sent Baker over
$1 million during the life of the scheme, and Natario also used investor funds to pay credit card
bills, purchase real property, and pay for personal travel and vacations.
11. By February 2021, investor withdrawal requests were outpacing Defendants’ ability
to fraudulently solicit additional investments.  In response to investor questions and complaints,
Baker and Natario offered various false and misleading excuses, including that the bank had frozen
the relevant account.
12. Later in 2021, Baker stopped responding to investors altogether, and Natario
continued to deceive investors.  For example, in August 2021, Natario sent one investor a sham
monthly bank statement that he had doctored to reflect a fictitious account balance of approximately
$5.8 million.  In truth, the balance for that account at the time was $18.
13. By engaging in this conduct and as alleged further herein, the Defendants each
violated Section 17(a) of the Securities Act [15 U.S.C. § 77q], and Section 10(b) of the Exchange
Act, [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. §240.10b-5] thereunder.
14. The SEC seeks permanent injunctions; disgorgement of Defendants’ ill-gotten gains
derived from the conduct alleged in the Complaint, plus prejudgment interest thereon; and civil

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penalties against Defendants.
THE DEFENDANTS
15. Natario is 54 years old and has no fixed address, having recently lived in Naples,
Florida, Ludlow, Massachusetts, and Scottsdale, Arizona.  At the time of the securities law
violations alleged herein, Natario resided in Las Vegas, Nevada, and owned a Nevada corporation
called Creative Foam Shapes, Inc. (“Creative Foam Shapes”).  Creative Foam Shapes was a closely-
held manufacturing company, headquartered in Las Vegas, that purportedly sold advertising
displays and insulation for construction projects.  Natario acquired Creative Foam Shapes, and
gained access to its bank accounts, in December 2019.  The company ceased operations in early
2021, and its corporate charter was revoked in 2022.
16. Baker is 47 years old and resides in Montgomery County, Pennsylvania.  At the time
of the securities law violations alleged herein, Baker resided in Barnstable, Massachusetts.  Baker is
the co-owner and CEO of Mobius Media Solutions, Inc., a small marketing company incorporated
in Massachusetts and headquartered in Hyannis, Massachusetts.
FACTS
I. DEFENDANTS MEET AND CREATE THE MERCHANT CASH ADVANCE VENTURE
17. In the summer of 2019, Natario and Baker met at a meeting of a private networking
group located in Tampa, Florida, called the Board of Advisors (“BA”).
18. The BA was comprised of entrepreneur members who were required to apply and
pay an annual fee of approximately $25,000 to join the group.  The BA held quarterly in-person
meetings and weekly videoconference calls, at which members would network and make
investment pitches and other presentations.
19. At the BA meeting where Natario and Baker met in the summer of 2019, Natario
presented himself to the BA as a successful entrepreneur from Phoenix, Arizona, and he began
floating investment ideas to Baker and other members present at the meeting.
20. One of the investment ideas Natario discussed with Baker was a merchant cash
advance business opportunity.  This business venture would involve soliciting investments and
loaning invested funds to small businesses in need of short-term capital, such as those who may not

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have been able to secure a bank loan; then, they would purportedly use the high interest collected on
those loans to pay returns to investors.
21. Natario and Baker continued discussing the MCA opportunity throughout 2019.  As
a result of those discussions, the two agreed to pursue the MCA venture.  Natario was to take the
lead on identifying small businesses in need of short-term MCA financing.  Meanwhile, Baker
would take the lead on soliciting investments in the MCA venture from BA members—which Baker
began to do in or by early 2020.
II. DEFENDANTS’ FRAUDULENT SCHEME
22. Defendants engaged in a fraudulent scheme, in connection with soliciting and selling
investments in the purported MCA venture, by:  (i) making materially false and misleading
statements, including in written MCA purchase agreements, about the use of investor funds,
promised returns, and the purported MCA venture; (ii) using later investors’ principal to make
Ponzi payments to earlier investors, to further the scheme and secure additional investments; and
(iii) engaging in other fraudulent conduct to create the false and misleading appearance that the
MCA venture was successfully yielding profits and that investor funds were safe, including by
deploying a deceptive online investor portal and disseminating a fake bank account statement to at
least one investor.
A. The MCA Purchase Agreements
23. Beginning in mid-February 2020, Baker and Natario sold investments in the MCA
venture to, and raised approximately $10 million from, approximately 23 investors, the
overwhelming majority of whom were BA members.
24. In soliciting the MCA investments, Baker and Natario told investors their money
would be used to fund MCA transactions, and they promised investors rates of return ranging from
16% to 18% for a 12-week period.  In fact, Defendants never used the invested money to fund MCA
transactions, but rather misappropriated investors’ money for their own benefit and otherwise used
the money to make supposed “interest” payments owed to earlier investors.  At least some of these
payments to earlier investors were classic Ponzi payments, used to facilitate the fraudulent scheme.
25. With few exceptions, the MCA investments were memorialized in written purchase

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agreements (the “MCA Purchase Agreements”).
26. Baker and Natario were both responsible for developing and utilizing the MCA
Purchase Agreements.  Natario was listed as the signatory on, and in fact signed and dated, all but a
few of the MCA Purchase Agreements.  Baker provided the written agreements to investors and
signed the few agreements that did not have Natario’s signature.
27. The parties to the MCA Purchase Agreements were the respective MCA investor (or
“Purchaser”) and the “Company,” which sold the investments.  For some agreements, the
“Company” identified was Creative Foam Shapes—a Nevada corporation that purportedly created
advertising displays and insulation for small construction projects.  Natario acquired Creative Foam
Shapes in late December 2019.
28. For other MCA Purchase Agreements, however, the selling “Company” was
identified as “Creative Financing Inc.,” which was purportedly a Nevada corporation with a
principal place of business at the same address as Creative Foam Shapes.  In fact, “Creative
Financing, Inc.” was a fictitious company name.  It was never incorporated or registered in Nevada
or any other state or jurisdiction.
29. The MCA Purchase Agreements contained several materially false and misleading
statements, including:
(i) that the “Company” was engaged in “Merchant Cash Advance Transactions”;
(ii) that the “Company” would use investor money to fund “a portion” of the
MCAs to be loaned to the MCA merchant “Recipients” as part of those transactions;
(iii) that “[i]n exchange” for the Purchaser’s investment funds, each investor
“shall acquire from the Company a property interest ... in the accounts receivable and/or
other assets” of the MCA Recipient; and
(iv) that, by the end of the 12-week investment period, the Company would pay
investors their “pro rata share” of the MCA amounts repaid to the Company by the MCA
Recipient, plus the promised 16% to 18% interest.
30. As Defendants knew, or were reckless in not knowing, these representations were
false and misleading.  No MCAs were ever made to any small-business merchants.  No such

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merchant ever provided accounts receivable or other assets as collateral.  And no interest was ever
earned on an MCA.  And to the extent investors received any purported “interest” payments, these
payments were not generated from any MCA transaction but were made from a bank account that
held other investors’ money.
31.  Natario and Baker each knew, or were reckless in not knowing, that these statements
were false and misleading when they made them, because they each knew, or were at least reckless
in not knowing, that there was no MCA venture or opportunity whatsoever and therefore that
investors were not going to earn “interest” from any actual MCA transactions, but only from the
principal investments of other investors.
B. The Ponzi Payments to Investors
32. Upon, or around the time of, executing the MCA Purchase Agreements or otherwise
agreeing to invest in the MCA venture, investors would remit invested funds—ranging from as low
as $10,000 to as high as $700,000—to Creative Foam Shapes’ business checking account (the “CFS
Checking Account”) at a large, national bank.  Upon acquiring Creative Foam Shapes in December
2019, Natario gained access to, and control of, the CFS Checking Account and two other accounts
at the same bank.
33. For the entirety of Defendants’ scheme, all investor funds were deposited and pooled
in the CFS Checking Account.  And substantially all of the purported “interest” payments to
investors were made from the same CFS Checking Account.  (The remaining payments were made
from the other two accounts Natario controlled.)  By using new investor funds to pay out previous
investors, the Defendants were making or facilitating traditional Ponzi payments.
34. For most if not all of the MCA investments made during the scheme, approximately
10 to 14 days after an investor made his or her investment in the purported MCA venture, Natario
would initiate weekly, purported “interest” payments to investors.  This had the effect of creating
the false and misleading appearance that those payments had been generated via MCA transactions,
and more broadly that the MCA venture was real and successful.  In fact, those payments were not
funded by any MCA transactions but were paid out of, or derived from, the same CFS Checking
Account into which other investors had paid their funds.

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35. By the end of February 2020, just weeks into the scheme, investors had transferred
approximately $620,000 to the CFS Checking Account, and Natario had wired back approximately
$127,000 in ostensible interest payments.  By the end of March 2020, Baker and Natario had raised
around $1.5 million and had made ostensible interest payments and return of capital totaling
approximately $520,000.
36. In March 2020, just weeks into the scheme, Baker began to solicit additional
investments from those who had already invested and to whom Natario had made Ponzi payments.
37. In doing so, Baker encouraged those who had already invested to “roll over” their
principal and interest into additional 12-week MCA investments, under the same terms as those
investors’ initial investments.
38. Many of those investors, encouraged by the false and misleading appearance that
Defendants had created of a successfully operating business, decided to roll over their principal and
accruing interest into new MCA investments.
39. Having investors’ principal and (supposedly) accruing interest “reinvested” reduced
the cash-flow pressure on Defendants because they did not need to return the principal to those
investors.  In other words, that left more funds available in the CFS Checking Account for Natario
to continue making Ponzi payments, thereby enabling Defendants to make the MCA venture appear
operational and successful for a longer period.
C. The Flowallet Investor Portal
40. At the outset of the scheme in February 2020, Baker created and used spreadsheets to
track the investments and calculate the amounts owed to investors.  In those spreadsheets, Baker
also recorded wire transfer amounts and information as it became available, including as provided
by Natario, who controlled the CFS Checking Account.
41. By March 2020, Defendants had secured several MCA investments, and it became
too complex and burdensome for Baker to track the investments manually.  So, he began seeking a
way to automate the tracking process.  Baker started working with a software developer to create a
web-based system to track the funds paid in and due to be paid out.  The result was a web-based
portal named “Flowallet.”

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42. Baker used Flowallet to track the MCA investments.  The information and data used
to initially populate the Flowallet portal were derived from the spreadsheets Baker had used
previously to track those investments, which Baker provided to the software developer.
43. Baker arranged for MCA investors to be given Flowallet login credentials, and he
told investors they could access the Flowallet portal to view their investments, the growth in their
investments, and the interest they had accrued.
44. For each investor, Flowallet would display, and investors could see, information for
each “Account” (i.e., each MCA Purchase Agreement or investment), including, as shown in the
screenshot below (from the Flowallet account of Investor A, see infra § II(D)(i)):
(i) the number and amount of “Received deposit[s]” (or principal invested),
(ii) the “Interest Paid” (which reflected the amount of interest owed to the
investor, not what the investor had actually received),
(iii) the “Total” (summing (i) and (ii)), and
(iv) the purported “Growth Rate” (the percentage by which the investor’s
principal had grown).

45. Baker led investors to believe that the “Total” (reflected in their Flowallet
“Dashboard”) represented an available balance from which they could request redemptions or
withdrawals.  In fact, as Baker and Natario each knew, or were reckless in not knowing, there were

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not sufficient funds available if all investors were to request withdrawals of their “Total” amounts
(of principal and accrued interest) at the same time.
46. For example, Baker told Investor B (see infra § II(D)(ii)) that Flowallet was a visual
representation of Investor B’s MCA investment and was intended to give him and other investors
clarity on the status and availability of investor funds.  Based on what Investor B’s Flowallet
account displayed under the “Total,” Investor B believed he had approximately $2.3 million
available for him to withdraw.  The Flowallet portal, and the information it reflected, was a factor in
Investor B choosing to make additional investments in the MCA venture.
47. Baker also told investors that on Flowallet they could request withdrawals directly in
or from Flowallet.  For example, on September 8, 2020, an investor asked Baker by text message,
“How do I do a withdrawal?”  Baker responded the same day, “It’s on the Flowdays tab” and in
another text immediately thereafter, “Click on a date and enter the [withdrawal amount] number.”
48. Several investors did, in fact, submit withdrawal requests in Flowallet, and as Baker
had told investors, those withdrawal requests were displayed on Flowallet—specifically, on a sub-
page called “Flowdays,” which reflected the status of each request as having been “Requested,”
“Rejected,” or “Approved.”
49. The Flowallet portal was not connected to any financial institution, and thus the
process of fulfilling investor withdrawal requests was not automated.  Instead, investor withdrawal
requests were processed manually by Baker, who would approve or reject the request in Flowallet,
and by Natario, who, if the request was approved, would authorize the corresponding wire transfer
from the CFS Checking Account (or one of the other two accounts he controlled).
50. Flowallet did not provide or display any identifying information concerning the
purported MCA transactions (apart from the amount of “Interest Paid” to investors from these
supposed transactions) or the entities that purportedly received MCAs financed by investor funds.
D. Additional Material Misrepresentations and Deceptive Acts
51. In carrying out the scheme, Defendants made several materially false and misleading
statements to investors (in addition to those they made in the MCA Purchase Agreements), and
engaged in other deceptive conduct.

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52. Baker, in particular, made numerous material misrepresentations in soliciting
investors, convincing investors to reinvest, and otherwise carrying out the fraudulent scheme.
53. Representative examples of Baker’s material misrepresentations to, and both Baker’s
and Natario’s deceptive acts toward, specific investors, are set forth below.
(i) Investor A
54. In soliciting investors, Baker made oral, material misrepresentations similar to those
that he and Natario made to investors in the MCA Purchase Agreements:  that investor funds would
be used to make MCA loans to small businesses, and that the interest earned as a result of those
MCA transactions would be used to fund promised 16% to 18% returns.
55. For example, in or around November 2020, Baker solicited a BA member (“Investor
A”) to make a $700,000 investment in “Creative Financing” through a North Dakota corporation
controlled by Investor A.
56. In soliciting Investor A’s investment, Baker described the opportunity as an MCA
investment that would yield an 18% rate of return.  Baker told Investor A the MCA investment was
very solid and that Investor A could start withdrawing money from his account after only two
months.
57. In addition, Baker showed Flowallet to Investor A and explained that, on Flowallet,
Investor A could see and track his investment and learn when he would receive investment
distributions.
58. Based on Baker’s representations, Investor A believed his investment would earn the
promised 18% return and decided to invest.
59. On or around November 23, 2020, Investor A wired $700,000 to the CFS Checking
Account controlled by Natario.
60. Investor A did not receive any purported interest payments, and only approximately
$25,000 of his invested principal was returned, well after Defendants’ scheme had collapsed.
(ii) Investor B
61. In February 2020, Baker began soliciting investments from another BA member,
who resided in Texas (“Investor B”).  Baker pitched the MCA venture investment opportunity to

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Investor B primarily by phone.
62. During those phone calls, Baker told Investor B that Natario, who by that time was
also a BA member, was his partner and that Baker and others in the BA group were on the ground
floor of this investment opportunity.
63. In soliciting Investor B’s initial and subsequent MCA investments, beginning in
February 2020 and continuing through early October 2020, Baker made the following materially
false and misleading representations to Investor B:
(i) Baker told Investor B that he (Baker) had invested over $1 million of his own
money in the MCA venture.
(ii) Baker told Investor B that he (Baker) had secured a home equity line of credit
(“HELOC”) to generate additional liquidity to invest in the MCA venture.
(iii) Baker told Investor B that the MCA loans to the supposed merchants were
collateralized at 150% of the loan value and that they would be able to recover all funds via
the merchant-recipients’ collateral.
(iv) Lastly, Baker told Investor B that the MCA venture had experienced a
merchant-recipient default rate of only four percent.
64. These misrepresentations were false and misleading.  Baker had not invested over $1
million in the MCA venture, nor had he obtained a HELOC to do so.  Further, because no MCA
loans were actually made, such loans could not be collateralized (at 150% or otherwise) and there
could be no default rate (of four percent or otherwise).  Baker knew he had not invested $1 million
of his own money to invest or obtained a HELOC to do so.  And he knew, or was reckless in not
knowing, that there were no MCA loans made, rendering his collateralization and default-rate
statements false and misleading.
65. The material misrepresentations Baker made created, and were designed by Baker to
create, the false and misleading appearance that investing in the MCA venture was safe, legitimate,
worthwhile, and a great opportunity to make considerable returns in a short period of time.
66. Based on Baker’s misrepresentations, Investor B invested a total of approximately
$954,000 in the MCA venture between March 1 and October 6, 2020.

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67. Specifically, on March 1, 2020, Investor B signed an MCA Purchase Agreement (on
behalf of an entity he controlled) to invest $100,000.  Natario signed the agreement on behalf of
Creative Foam Shapes the same day.
68. After executing the agreement, Investor B wired $100,000 from his entity’s bank
account to the CFS Checking Account.
69. Section 4(C) of the March 1, 2020, MCA Purchase Agreement provided that Investor
B would receive purported “interest” payments, derived from MCA transactions, “every week.”
Between March 1 and April 6, 2020, four payments (ranging in amount from $9,833 to $11,800)
were wired from the CFS Checking Account to Investor B.
70. On April 8, 2020, Investor B signed another MCA Purchase Agreement (on behalf of
another entity he controlled), investing an additional $160,000 in the MCA venture.  Natario also
signed this agreement on behalf of Creative Foam Shapes.
71. For Investor B’s subsequent investments, Baker encouraged Investor B to “roll over”
or reinvest his principal and accrued interest into new investments.  After Investor B’s March and
April 2020 investments, Investor B’s subsequent investments were not memorialized in written
MCA Purchase Agreements.  Following what Investor B thought was Baker’s example, Investor B
secured and used a HELOC to fund approximately $200,000 of his subsequent investments in the
MCA venture.
72. In all, Investor B invested approximately $954,000 between March and October
2020, and he received just over $159,000 in purported interest and principal payments from the CFS
Checking Account.
(iii) Investor C
73. Also in early February 2020, Baker solicited an investment from another BA
member, who resided in Florida (“Investor C”).
74. Baker and Investor C discussed the MCA venture investment opportunity by phone
and via Skype messaging.
75. In describing the MCA venture, Baker told Investor C:
(i) that he had a partner and before he and his partner loaned money to any small

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business, they made sure there was hard collateral to protect the MCA loans, in the form of
real estate or other assets;
(ii) that if he and his partner were not receiving the MCA interest payments from
an MCA merchant-recipient, they would get their money back by obtaining and selling the
collateral; and
(iii) that he and his partner reviewed the finances and credentials of potential
MCA merchant-recipients to make sure that each business was qualified to receive an MCA
loan.
76. As Baker knew, or was reckless in not knowing, these statements were false and
misleading.  Again, there were no MCA loans.  There was no qualification or review process for
MCA loan recipients.  There was no collateral from MCA loan recipients, and neither Baker nor
Natario had undertaken the process of obtaining or selling collateral in the event of an MCA loan
recipient defaulting.
77. Baker promised Investor C an investment rate of return of approximately 18%.
Baker told Investor C that this rate was far better than Investor C could obtain by trading on the
stock market, and that nowhere else could Investor C get returns so high in just 12 weeks.
78. The above statements by Baker led Investor C to believe that if he invested in the
MCA venture, he would earn a high profit in a short period of time and his investment would be
safe and protected.
79. On or around February 11, 2020, after discussing the investment with Baker,
Investor C invested $150,000, wiring the funds to the CFS Checking Account as Baker instructed
him to do.
80. At the time of his initial investment, Investor C asked if there was paperwork for the
investment.  Baker told him there was not, explaining that paperwork and other administrative
matters were too much of a hassle.
81. Between late February and early March 2020, Natario wired purported interest
payments to Investor C, each in the amount of $14,750, and totaling $44,250.  In fact, these were
Ponzi payments funded, at least primarily, by new investor money.

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82. On or around March 4, 2020, Baker messaged Investor C on Skype, “Let me know
when you want to add more and I will get you squared away ... We have some really big deals
coming up that are available whenever you [and your brother] are.”  (Investor C’s brother had also
invested.)  In truth, there were no upcoming MCA deals, “really big” or otherwise, as Baker knew
or was reckless in not knowing.
83. Just over an hour later, Investor C responded to Baker on Skype:  “Awesome great to
hear man” and said he and his brother were “definitely on board with adding more” money to their
MCA investments.
84. On or around March 12, 2020, Investor C invested another $100,000.
85. Investor C continued to receive Ponzi payments between mid-March and mid-July
2020, and during that time invested another $250,000.
86. Investor C ultimately invested a total of over $500,000 in the purported MCA
venture, and he received approximately $447,000 in principal and purported interest.
(iv) Investor D
87. Early in the scheme, in February 2020, Baker also solicited an investment from a
Florida resident who was also a member of the BA (“Investor D”).
88. Baker met with Investor D in person at least once, and they otherwise communicated
by phone and text message, to discuss the MCA investment opportunity.
89. In soliciting Investor D’s investment, Baker told her that:  (i) investor funds would
be used to finance MCA loans to businesses; (ii) she would be paid high returns very quickly; (iii)
the MCA loans would be collateralized; (iv) multiple MCA loans had already been provided to
several merchant-recipients; and (v) MCA recipients’ failure to pay was “very minimal.”  These
statements were false and misleading, as discussed above.
90. Baker provided Investor D with an MCA Purchase Agreement between her and
Creative Financing dated February 14, 2020.
91. Based on her conversations with Baker, Investor D decided to invest $25,000 in mid-
February 2020.
92. Between late February and early May 2020, Natario, almost weekly, wired purported

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interest payments to Investor D, each in the approximate amount of $2,458, and totaling
approximately $27,041.  In fact, these were Ponzi payments funded by new investors’ money.
93. On or around May 5, 2020, Investor D made an additional investment, rolling over
the initial $25,000 and wiring an additional $30,000 to the CFS Checking Account Natario
controlled.
94. Investor D made additional investments in the amount of $50,000 each, in July,
August, September, and twice in November of 2020.  In all, Investor D committed over $300,000 to
the purported MCA venture, and she ultimately received only approximately $84,500 in principal
and purported interest from Natario.
(v) Investor E
95. In late May 2020, three months after the scheme had begun and during which time
no MCA loans had been made, Baker solicited a $150,000 investment from a BA member residing
in Florida (“Investor E”).
96. Baker told Investor E that Natario was Baker’s “business partner” and that the MCA
investment opportunity was “bigger than anything he had ever worked on” and “as safe as safe can
be.”
97. After receiving purported investment returns in October 2020, Investor E committed
another $120,000 to the MCA venture in late October and November 2020.  Investor E ultimately
recovered only approximately $36,500 of the $270,000 he had invested in total.
98. Between May and November 2020, Investor E asked Baker for information
concerning the purported MCA transactions, including the identity of the MCA recipients.  In
response, Baker told Investor E the requested information was proprietary and confidential and
would not be shared.  That statement was false and misleading because there were no MCA
transactions or MCA recipients, so there was no such information to be considered proprietary or
confidential.
(vi) Investor F
99. Later in the scheme, in early November 2020, Baker solicited at least three MCA
investments, totaling approximately $390,000, from another BA member residing in Florida

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(“Investor F”).
100. In soliciting Investor F’s investments during that period, Baker made several
materially false and misleading statements, including that:  (i) the MCA investment was safe; (ii)
investor funds would be used to finance MCA transactions to generate investor returns at a 16%
rate; and (iii) the default rate on the MCA loans was “miniscule.”
101. These statements to Investor F were false and misleading, because investor funds
were not used on MCAs but to pay other investors, rendering the investments far from safe.
Likewise, there was no MCA default rate because there were no MCAs.
102. Further, Baker told Investor F that Baker was invested in the same MCA venture and
that he had refinanced his home for $3.9 million to generate liquidity to invest.  Investor E later
learned that Baker did not even own a home.
103. Before investing in the MCA venture, Investor F spoke with several BA members
who had already invested, who told Investor F that they were making money from their MCA
investments.  Of course, the investors with whom Investor F spoke did not know the money they
were “making” was simply the invested principal of other investors.
104. Based on those conversations and Baker’s representations, verbally and in the MCA
Purchase Agreements Baker provided, Investor F decided to make multiple investments, totaling
approximately $390,000, including funds from his retirement accounts.
105. At least two of Investor F’s investments were memorialized in MCA Purchase
Agreements.  One agreement was signed by an “Authorized Signatory” of Investor F’s individual
retirement account (“IRA”), and also by Investor F, who added by hand, “Read And Approved.”
Another agreement was signed by Investor F on behalf of an entity he controlled, and by Baker as
“Patch Baker, CEO” for “Flowallet Underwriter.”  However, both agreements identified “Creative
Financing Inc.” as the “Company” with whom investors were contracting and did not otherwise
mention Flowallet or define the term “Flowallet Underwriter.”
106. Between November 5 and 11, 2020, Investor F transferred, or caused to be
transferred, $390,000 from his three accounts to the CFS Checking Account controlled by Natario.
107. After November 11, 2020, Investor F never received any purported interest payments

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or the return of his principal.  Baker and Natario simply misappropriated Investor F’s funds, and
Defendants used them to, among other things, make purported interest payments to other investors,
enabling them to conceal and extend the scheme for a longer period of time.
E. Defendants Continue to Deceive Investors and the Scheme Collapses
108. By December 2020, Natario had dissipated most of the funds, including by sending
more than $1 million to Baker.  As a result, the Ponzi payments to most investors halted
temporarily, and Baker and Natario stopped processing investor withdrawal requests.
109. Around the same time, several investors, including Investor A, repeatedly tried to
access Flowallet to check the status of their investments but could not gain access.
110. Meanwhile, Defendants continued to mislead investors and solicit additional
investments to perpetuate their fraudulent scheme.
111. For example, on or around January 15, 2021, Investor C asked Baker, on Skype,
“How [have] loan applications been since November?  Everything is as usual?”  As reflected in the
screenshot below, Baker responded:  “Yo Homie!  The MCAs are crankin!”—creating the false and
misleading impression that the MCA venture was not only legitimate but thriving, and that Investor
C’s investment remained safe.

112. But, at the time, Investor C’s and others’ investments were not safe.  By the end of
January 2021, the CFS Checking Account balance was less than zero, and the total balance of all
three accounts Natario controlled was $132.
113. To further their scheme, Defendants solicited additional investments, including from
a small number of earlier investors who had continued to receive Ponzi payments from Natario or

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who were not aware that Defendants were defaulting on payments owed to other investors.
114. From January through February 2021, Defendants were able to solicit and obtain
$495,000 in additional investments, including $165,000 from an earlier investor, a Nevada resident
who had already invested $250,000 (“Investor G”).  In soliciting Investor G’s initial, $250,000
investment in or around September 2020, Baker had told Investor G that he (Baker) had invested
over $45 million in the MCA venture—a false statement Baker knew to be a lie.
115. Almost immediately, Natario used nearly all the $495,000 in newly invested funds to
make more Ponzi payments to earlier investors and to pay and otherwise enrich himself, see infra §
IV.
116. By the end of February 2021, the CFS Checking Account had a balance of
approximately $58, and the total balance of the three accounts Natario controlled was
approximately $139.
117. From the spring through the fall of 2021, several investors repeatedly attempted to
reach Baker (and later, Natario) and figure out what had happened to their investment proceeds and
why their withdrawal requests were not being processed.
118. During that period, Baker set up a Zoom videoconference call with a group of BA
investors, including Investors A and B, to address their complaints and answer their questions.
Natario joined the call.
119. On the Zoom call, Baker and Natario represented that they were having issues with
the bank (at which the CFS Checking Account was held) distributing investment proceeds and were
working diligently to correct the issue.  Neither Baker nor Natario told investors on the call that
their withdrawal requests had not been processed because their investment proceeds were gone—
having been used not to fund MCA transactions, as promised, but to carry out their fraudulent
scheme.
120. Baker separately told investors that, due to the high volume and constant nature of
transactions, the bank had frozen the CFS Checking Account.
121. In response to an April 13, 2021, Skype message from Investor C inquiring about his
withdrawal request, which had not been approved, Baker told Investor C, “it is trapped in [the

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bank]” and that it “[s]hould be cleared up soon.”
122. It was not cleared up soon.  Between April and June 2021, Investor C sent several
Skype messages to Baker inquiring about his MCA investment.  Baker replied only once, on May
25, 2021, telling Investor C that he (Baker) had been “traveling almost non-stop”; that he was “still
working on the bank”; and that “it’s been a nightmare for me on this side.”
123. After the Zoom call with some of the BA investors, Baker generally stopped
responding to investor emails and calls.
124. By the summer of 2021, many investors, who had been unable to reach or
communicate with Baker, continued to pressure Natario to return their invested principal and
promised interest.
125. For example, Investor B continued to ask Natario about the status of his investment
in the summer of 2021.  In response, in or around August 2021, Natario created and sent Investor B
a sham monthly statement for a “Creative Foam” account at the bank.
126. That statement falsely reflected a July 2021 ending balance of approximately $5.8
million.  In truth, the balance for that account at the time was $18.
127. Natario used the fake statement to lead Investor B to believe his funds were safe and
there was sufficient liquidity to make the promised principal and interest payments.
128. However, as Natario well knew, Investor B’s funds were gone and there was no
sufficient liquidity to pay Investor B or any other investor.
129. In November 2021, Natario executed release agreements and promissory notes with
multiple investors, including Investors A, B, C, and D (or entities they controlled and through which
their MCA investments had been made).  In the release agreements, Natario “accepted
responsibility and “agree[d] to be personally liable for” repaying the plaintiffs’ invested principal.
130. Natario never made any of the payments owed on the promissory notes.
131. As a result of this conduct, on August 24, 2022, a group of investors brought a civil
action against Natario in Florida State court, suing for breach of the promissory notes, captioned
Roka Solo 401k Trust, et al. v. Natario, Case No. 22-CA-003326.
132. As reflected in the Consent Judgment and Final Order entered in that case on

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September 19, 2022, Natario and plaintiffs reached a settlement agreement requiring Natario pay
the plaintiffs approximately $5.65 million, plus interest.  The plaintiff investors have thus far been
unable to collect any of the amounts owed to them by Natario.
III. DEFENDANTS OFFERED AND SOLD THE MCA INVESTMENTS AS SECURITIES
133. Natario and Baker offered and sold the MCA investments, including the MCA
Purchase Agreements, as investment contracts and thus securities.
134. An “investment contract” is “a contract, transaction, or scheme” whereby the
investor (1) invests his or her money, (2) in a “common enterprise” and (3) is “led to expect profits”
derived “from the efforts of the promoter or a third party.”  SEC v. W.J. Howey Co., 328 U.S. 293,
298-99 (1946).
135. These three prongs of the Howey test are satisfied here.
136. First, investors paid money that was sent to the CFS Checking Account controlled
by Natario.
137. Second, the “common enterprise” prong is satisfied because (i) Baker told
investors their investments would be pooled together and used to fund the MCA venture, and
investor funds, in fact, were pooled in a single account—the CFS Checking Account Natario
controlled and used to make the Ponzi payments; (ii) the MCA Purchase Agreements specified that
each investor would “receive his pro rata share” of the loan repayments made by the (supposed)
MCA recipients; and (iii) Defendants pitched to investors, and the MCA Purchase Agreements
outlined, a single MCA venture on which investors’ fortunes would depend.
138. Third, investors were led by Defendants to reasonably expect profits derived from
the efforts of others, including the Defendants, Creative Foam Shapes, Creative Financing, and the
purported MCA recipients.  The MCA Purchase Agreements provided just that:  investors would
receive the stated, high interest rate (up to 18%) through the efforts of “the Company” (Creative
Financing or Creative Foam Shapes), which would provide MCAs to, and receive repayments from,
certain small businesses.

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IV. DEFENDANTS MISAPPROPRIATED INVESTOR FUNDS AND ENRICHED THEMSELVES
139. As a result of the scheme detailed herein, Natario and Baker defrauded investors of
over $10 million and enriched themselves.  Each of Natario and Baker obtained money directly or
indirectly by means of their untrue statements to investors of material facts and their omissions of
material facts in connection with their offers and sales of the MCA investments.
140. Natario received all investor funds, more than $10 million, in the CFS Checking
Account that he controlled.
141. During the period February 2020 through February 2021, Natario used an aggregate
of approximately $3 million to make Ponzi payments to investors.
142. In August 2020, Natario hosted Baker and one investor for an all-expenses-paid trip
to Las Vegas, using investor funds to pay for, among other things, first-class travel, chauffeur
service, and a suite at the Bellagio hotel and casino.
143. Natario also used investor funds to enrich himself.  For example, beginning in March
2020, Natario used over $1.14 million to buy real property in his name or the names of entities he
controlled.
144. Natario further used investor funds to pay off amounts charged to his personal credit
cards, to make additional payments to himself totaling approximately $625,000, and to make
withdrawals of approximately $1.5 million.
145. Baker was also enriched by Defendants’ scheme.  Between late February 2020 and
early December 2020, Natario transferred to Baker over $1 million from the CFS Checking Account
that housed investors’ funds.  In all, Natario made approximately 28 payments to Baker during that
time period, ranging in amount from $5,625 to $100,000.
146. Baker has contended that these payments derived entirely from various transactions
or deals in which Natario had invested him or from a variety of business arrangements that he had
with Natario, although Baker has been unable to provide support for those purported arrangements.
147. All but one payment to Baker came from the CFS Checking Account that held the
investor funds from the sale of MCA investments; Baker participated in the scheme and knew that
the investor funds had been deposited into that account.  (The source of the one other payment to

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Baker was a Creative Foam Shapes’ savings account at the same bank, which Natario also
controlled).
148. In addition, Natario used investor funds from the CFS Checking Account to pay
Creative Foam Shapes’ actual business expenses.  The CFS Checking Account included funds from
Creative Foam Shapes that were commingled with MCA investor funds.  However, Creative Foam
Shapes’ funds were not sufficient to cover the Ponzi payments to earlier MCA investors or the
amounts Natario paid to himself and Baker.
V. DEFENDANTS’ TOLLING AGREEMENTS WITH THE SEC
149.  Each Defendant has entered into two tolling agreements with the SEC, in which
each agreed to toll any statute of limitations applicable to the conduct and claims alleged herein for
the period between February 1 and June 1, 2025.
CLAIMS FOR RELIEF
CLAIM ONE
Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]
(Against Both Defendants)
150. The SEC re-alleges and incorporates by reference paragraphs 1 through 149 above.
151. By engaging in the conduct described above during the relevant time period, each
Defendant, directly or indirectly, in the offer or sale of securities by the use of means or instruments of
transportation or communication in interstate commerce or by use of the mails: (a) knowingly or
recklessly employed one or more devices, schemes, or artifices to defraud; (b) knowingly, recklessly,
or negligently obtained money or property by means of one or more untrue statements of a material
fact or by omitting to state a material fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading; and (c) knowingly, recklessly, or
negligently engaged in one or more transactions, practices, or courses of business which operated or
would operate as a fraud or deceit upon the purchaser.
152. By reason of the foregoing, each of the Defendants violated, and unless restrained
and enjoined will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

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CLAIM TWO
Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78(b)] and Rule 10b-5
Thereunder [17 C.F.R. § 240.10b-5]
(Against Both Defendants)
153. The SEC re-alleges and incorporates by reference paragraphs 1 through 149 above.
154. By engaging in the conduct described above during the relevant time period, each
Defendant, directly or indirectly, in connection with the purchase or sale of a security, and by the
use of means or instrumentalities of interstate commerce, of the mails, or of the facilities of a
national securities exchange, knowingly or recklessly:  (a) employed one or more devices, schemes,
or artifices to defraud; (b) made one or more untrue statements of a material fact or omitted to state
a material fact necessary in order to make the statements made, in the light of the circumstances
under which they were made, not misleading; and (c) engaged in one or more acts, practices, or
courses of business which operated or would operate as a fraud or deceit upon other persons.
155. By reason of the foregoing, each Defendant violated, and unless restrained and
enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule
10b-5 thereunder [17 C.F.R. § 240.10b-5].
PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that this Court enter a Final Judgment:
I.
Finding that Defendants committed the securities law violations alleged in this Complaint;
II.
Permanently enjoining Defendants from violating, directly or indirectly, Section 17(a) of the
Securities Act [15 U.S.C. § 78q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and
Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
III.
Permanently enjoining Defendants from participating, directly or indirectly, including, but
not limited to, through any entity owned or controlled by each of them, in the issuance, purchase,
offer, or sale of any security, provided, however, that such injunction shall not prevent each of them
from purchasing or selling securities for each of their own personal accounts, pursuant to Section

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21(d)(1) and (5) of the Exchange Act [15 U.S.C. § 78u(d)(1) and (5)];
IV.
Ordering Defendants to disgorge all ill-gotten gains they received directly or indirectly, with
prejudgment interest thereon, as a result of the violations alleged in this Complaint, pursuant to
Sections 21(d)(3), (5), and (7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), (5), and (7)];
V.
Ordering Defendants to pay civil monetary penalties pursuant to Section 20(d) of the Securities
Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)];
VI.
Granting such other and further relief as this Court may determine to be necessary or
appropriate.
VII.
Retaining jurisdiction over this action in accordance with the principles of equity and the
Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and
decrees that may be entered.
JURY TRIAL DEMAND
 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands a trial by jury in
this action of all issues so triable.
Dated: May 21, 2025   Respectfully submitted,

U.S. SECURITIES AND EXCHANGE
COMMISSION

/s/ Nicholas C. Margida
Nicholas C. Margida
Counsel for Plaintiff
Securities and Exchan
ge Commission

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Nicholas C. Margida (VA Bar No. 73176) 
Securities and Exchange Commission  
100 F Street, N.E. 
Washington DC 20549 
Email: [email protected]  
Telephone: (202) 551-8504  

UNITED STATES DISTRICT COURT 

DISTRICT OF NEVADA 
 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 
 

vs. 

JOEL J. NATARIO and  
JEFFERSON SCOTT (a/k/a “PATCH”) 
BAKER,  

 
Defendants.  
 

  
 
Case No. 25-CV-00895 
 
COMPLAINT 
 
JURY DEMAND 

 

Plaintiff Securities and Exchange Commission (the “SEC”), for its Complaint against 

Defendants Joel J. Natario (“Natario”) and Jefferson Scott (a/k/a “Patch”) Baker (“Baker”) 

(collectively, “Defendants”), alleges as follows: 

JURISDICTION AND VENUE 

1. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), and 

22(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)], 

and Sections 21(d)(1), 21(d)(3)(A), 21(e), and 27(a) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e), and 78aa(a)].  

2. In connection with the conduct alleged in this Complaint, Defendants have, directly 

or indirectly, made use of the means or instrumentalities of interstate commerce, of the mails, or of 

the facilities of a national securities exchange. 

3. Venue is proper in this district pursuant to Section 22(a) of the Securities Act [15 

U.S.C. § 77v(a)], and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)], because some of the 

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transactions, practices, or courses of conduct constituting violations of the federal securities laws 

occurred within this district.   

4. For example, during the time of the conduct alleged in the Complaint, the relevant 

securities were offered and sold in this district, and Defendants solicited certain investors residing in 

this district.  Further, Defendants used the bank accounts of a Nevada corporation headquartered in 

this district to obtain and misappropriate investor funds and carry out the fraudulent scheme. 

SUMMARY 

5. This is a civil enforcement action concerning a fraudulent scheme—featuring Ponzi 

payments whereby early investors were paid returns from later investors’ money—carried out by 

Defendants beginning no later than February 2020 and continuing through at least August 2021.  

During that period, Defendants lied repeatedly to investors, including about how investor funds 

would be used, and engaged in other fraudulent and deceptive conduct.   

6. Between February 2020 and February 2021, Natario and Baker defrauded 

approximately 23 investors out of more than $10 million, soliciting and selling investments in a 

purported venture involving merchant cash advances (“MCAs”)—short-term loans to small 

businesses in need of immediate capital.  Natario and Baker developed written purchase agreements 

they provided to investors and later signed.  In those purchase agreements, they falsely promised 

investors that their money would be placed in MCAs and that the investors would earn 16% to 18% 

returns for every 12-week investment period.  However, unbeknownst to investors, but as Natario 

and Baker each knew, or were reckless in not knowing, there were no MCAs and thus no MCA 

venture.  And any purported returns paid to investors were financed, not from any actual MCA 

transactions, but with other investors’ money through Ponzi payments.  

7. Natario and Baker had clear roles in carrying out this fraudulent scheme.  Natario, 

through the bank accounts of a Nevada company he acquired at the end of 2019, received and 

controlled all invested funds, and made all the Ponzi payments in furtherance of the scheme.  Baker, 

meanwhile, solicited investors in the purported MCA venture, mostly from a private networking 

group of entrepreneurs in Tampa, Florida, to which he belonged. 

8. In addition to the false and misleading statements he and Natario made in the written 

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purchase agreements, Baker also told investors, among other misrepresentations, that the default 

rate for the MCA loans (that were never actually made) was minimal, miniscule, or four percent 

(depending on which investor he was misleading at the time).  Baker also told investors he had 

personally invested millions of dollars in the MCA venture and had taken out a home equity line of 

credit to do so—statements that Baker knew to be false and misleading.  Incredibly, Baker—in 

soliciting a $250,000 investment from a Nevada resident (Investor G, see infra § II(E)) in or around 

September 2020—falsely represented that he had invested over $45 million in the MCA venture. 

9. Ultimately, Natario used nearly $3 million in investor funds to make purported 

“interest” (but, really, Ponzi) payments to investors, creating the false and misleading appearance 

that the MCA venture was successful.  As a result, many investors, at Baker’s urging, chose to “roll 

over” their principal and interest into new MCA investments, enabling Defendants to perpetuate the 

scheme.   

10. Defendants also used investor funds to enrich themselves.  Natario sent Baker over 

$1 million during the life of the scheme, and Natario also used investor funds to pay credit card 

bills, purchase real property, and pay for personal travel and vacations. 

11. By February 2021, investor withdrawal requests were outpacing Defendants’ ability 

to fraudulently solicit additional investments.  In response to investor questions and complaints, 

Baker and Natario offered various false and misleading excuses, including that the bank had frozen 

the relevant account.   

12. Later in 2021, Baker stopped responding to investors altogether, and Natario 

continued to deceive investors.  For example, in August 2021, Natario sent one investor a sham 

monthly bank statement that he had doctored to reflect a fictitious account balance of approximately 

$5.8 million.  In truth, the balance for that account at the time was $18. 

13. By engaging in this conduct and as alleged further herein, the Defendants each 

violated Section 17(a) of the Securities Act [15 U.S.C. § 77q], and Section 10(b) of the Exchange 

Act, [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. §240.10b-5] thereunder. 

14. The SEC seeks permanent injunctions; disgorgement of Defendants’ ill-gotten gains 

derived from the conduct alleged in the Complaint, plus prejudgment interest thereon; and civil 

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penalties against Defendants.  

THE DEFENDANTS 

15. Natario is 54 years old and has no fixed address, having recently lived in Naples, 

Florida, Ludlow, Massachusetts, and Scottsdale, Arizona.  At the time of the securities law 

violations alleged herein, Natario resided in Las Vegas, Nevada, and owned a Nevada corporation 

called Creative Foam Shapes, Inc. (“Creative Foam Shapes”).  Creative Foam Shapes was a closely-

held manufacturing company, headquartered in Las Vegas, that purportedly sold advertising 

displays and insulation for construction projects.  Natario acquired Creative Foam Shapes, and 

gained access to its bank accounts, in December 2019.  The company ceased operations in early 

2021, and its corporate charter was revoked in 2022. 

16. Baker is 47 years old and resides in Montgomery County, Pennsylvania.  At the time 

of the securities law violations alleged herein, Baker resided in Barnstable, Massachusetts.  Baker is 

the co-owner and CEO of Mobius Media Solutions, Inc., a small marketing company incorporated 

in Massachusetts and headquartered in Hyannis, Massachusetts. 

FACTS 

I. DEFENDANTS MEET AND CREATE THE MERCHANT CASH ADVANCE VENTURE 

17. In the summer of 2019, Natario and Baker met at a meeting of a private networking 

group located in Tampa, Florida, called the Board of Advisors (“BA”). 

18. The BA was comprised of entrepreneur members who were required to apply and 

pay an annual fee of approximately $25,000 to join the group.  The BA held quarterly in-person 

meetings and weekly videoconference calls, at which members would network and make 

investment pitches and other presentations. 

19. At the BA meeting where Natario and Baker met in the summer of 2019, Natario 

presented himself to the BA as a successful entrepreneur from Phoenix, Arizona, and he began 

floating investment ideas to Baker and other members present at the meeting. 

20. One of the investment ideas Natario discussed with Baker was a merchant cash 

advance business opportunity.  This business venture would involve soliciting investments and 

loaning invested funds to small businesses in need of short-term capital, such as those who may not 

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have been able to secure a bank loan; then, they would purportedly use the high interest collected on 

those loans to pay returns to investors.  

21. Natario and Baker continued discussing the MCA opportunity throughout 2019.  As 

a result of those discussions, the two agreed to pursue the MCA venture.  Natario was to take the 

lead on identifying small businesses in need of short-term MCA financing.  Meanwhile, Baker 

would take the lead on soliciting investments in the MCA venture from BA members—which Baker 

began to do in or by early 2020.   

II. DEFENDANTS’ FRAUDULENT SCHEME 

22. Defendants engaged in a fraudulent scheme, in connection with soliciting and selling 

investments in the purported MCA venture, by:  (i) making materially false and misleading 

statements, including in written MCA purchase agreements, about the use of investor funds, 

promised returns, and the purported MCA venture; (ii) using later investors’ principal to make 

Ponzi payments to earlier investors, to further the scheme and secure additional investments; and 

(iii) engaging in other fraudulent conduct to create the false and misleading appearance that the 

MCA venture was successfully yielding profits and that investor funds were safe, including by 

deploying a deceptive online investor portal and disseminating a fake bank account statement to at 

least one investor.  

A. The MCA Purchase Agreements  

23. Beginning in mid-February 2020, Baker and Natario sold investments in the MCA 

venture to, and raised approximately $10 million from, approximately 23 investors, the 

overwhelming majority of whom were BA members.   

24. In soliciting the MCA investments, Baker and Natario told investors their money 

would be used to fund MCA transactions, and they promised investors rates of return ranging from 

16% to 18% for a 12-week period.  In fact, Defendants never used the invested money to fund MCA 

transactions, but rather misappropriated investors’ money for their own benefit and otherwise used 

the money to make supposed “interest” payments owed to earlier investors.  At least some of these 

payments to earlier investors were classic Ponzi payments, used to facilitate the fraudulent scheme.   

25. With few exceptions, the MCA investments were memorialized in written purchase 

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agreements (the “MCA Purchase Agreements”).   

26. Baker and Natario were both responsible for developing and utilizing the MCA 

Purchase Agreements.  Natario was listed as the signatory on, and in fact signed and dated, all but a 

few of the MCA Purchase Agreements.  Baker provided the written agreements to investors and 

signed the few agreements that did not have Natario’s signature.  

27. The parties to the MCA Purchase Agreements were the respective MCA investor (or 

“Purchaser”) and the “Company,” which sold the investments.  For some agreements, the 

“Company” identified was Creative Foam Shapes—a Nevada corporation that purportedly created 

advertising displays and insulation for small construction projects.  Natario acquired Creative Foam 

Shapes in late December 2019.   

28. For other MCA Purchase Agreements, however, the selling “Company” was 

identified as “Creative Financing Inc.,” which was purportedly a Nevada corporation with a 

principal place of business at the same address as Creative Foam Shapes.  In fact, “Creative 

Financing, Inc.” was a fictitious company name.  It was never incorporated or registered in Nevada 

or any other state or jurisdiction. 

29. The MCA Purchase Agreements contained several materially false and misleading 

statements, including: 

(i) that the “Company” was engaged in “Merchant Cash Advance Transactions”; 

(ii) that the “Company” would use investor money to fund “a portion” of the 

MCAs to be loaned to the MCA merchant “Recipients” as part of those transactions;  

(iii) that “[i]n exchange” for the Purchaser’s investment funds, each investor 

“shall acquire from the Company a property interest … in the accounts receivable and/or 

other assets” of the MCA Recipient; and 

(iv) that, by the end of the 12-week investment period, the Company would pay 

investors their “pro rata share” of the MCA amounts repaid to the Company by the MCA 

Recipient, plus the promised 16% to 18% interest. 

30. As Defendants knew, or were reckless in not knowing, these representations were 

false and misleading.  No MCAs were ever made to any small-business merchants.  No such 

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merchant ever provided accounts receivable or other assets as collateral.  And no interest was ever 

earned on an MCA.  And to the extent investors received any purported “interest” payments, these 

payments were not generated from any MCA transaction but were made from a bank account that 

held other investors’ money. 

31.  Natario and Baker each knew, or were reckless in not knowing, that these statements 

were false and misleading when they made them, because they each knew, or were at least reckless 

in not knowing, that there was no MCA venture or opportunity whatsoever and therefore that 

investors were not going to earn “interest” from any actual MCA transactions, but only from the 

principal investments of other investors.  

B. The Ponzi Payments to Investors 

32. Upon, or around the time of, executing the MCA Purchase Agreements or otherwise 

agreeing to invest in the MCA venture, investors would remit invested funds—ranging from as low 

as $10,000 to as high as $700,000—to Creative Foam Shapes’ business checking account (the “CFS 

Checking Account”) at a large, national bank.  Upon acquiring Creative Foam Shapes in December 

2019, Natario gained access to, and control of, the CFS Checking Account and two other accounts 

at the same bank. 

33. For the entirety of Defendants’ scheme, all investor funds were deposited and pooled 

in the CFS Checking Account.  And substantially all of the purported “interest” payments to 

investors were made from the same CFS Checking Account.  (The remaining payments were made 

from the other two accounts Natario controlled.)  By using new investor funds to pay out previous 

investors, the Defendants were making or facilitating traditional Ponzi payments.   

34. For most if not all of the MCA investments made during the scheme, approximately 

10 to 14 days after an investor made his or her investment in the purported MCA venture, Natario 

would initiate weekly, purported “interest” payments to investors.  This had the effect of creating 

the false and misleading appearance that those payments had been generated via MCA transactions, 

and more broadly that the MCA venture was real and successful.  In fact, those payments were not 

funded by any MCA transactions but were paid out of, or derived from, the same CFS Checking 

Account into which other investors had paid their funds.  

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35. By the end of February 2020, just weeks into the scheme, investors had transferred 

approximately $620,000 to the CFS Checking Account, and Natario had wired back approximately 

$127,000 in ostensible interest payments.  By the end of March 2020, Baker and Natario had raised 

around $1.5 million and had made ostensible interest payments and return of capital totaling 

approximately $520,000.   

36. In March 2020, just weeks into the scheme, Baker began to solicit additional 

investments from those who had already invested and to whom Natario had made Ponzi payments. 

37. In doing so, Baker encouraged those who had already invested to “roll over” their 

principal and interest into additional 12-week MCA investments, under the same terms as those 

investors’ initial investments.   

38. Many of those investors, encouraged by the false and misleading appearance that 

Defendants had created of a successfully operating business, decided to roll over their principal and 

accruing interest into new MCA investments.   

39. Having investors’ principal and (supposedly) accruing interest “reinvested” reduced 

the cash-flow pressure on Defendants because they did not need to return the principal to those 

investors.  In other words, that left more funds available in the CFS Checking Account for Natario 

to continue making Ponzi payments, thereby enabling Defendants to make the MCA venture appear 

operational and successful for a longer period. 

C. The Flowallet Investor Portal 

40. At the outset of the scheme in February 2020, Baker created and used spreadsheets to 

track the investments and calculate the amounts owed to investors.  In those spreadsheets, Baker 

also recorded wire transfer amounts and information as it became available, including as provided 

by Natario, who controlled the CFS Checking Account.   

41. By March 2020, Defendants had secured several MCA investments, and it became 

too complex and burdensome for Baker to track the investments manually.  So, he began seeking a 

way to automate the tracking process.  Baker started working with a software developer to create a 

web-based system to track the funds paid in and due to be paid out.  The result was a web-based 

portal named “Flowallet.” 

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42. Baker used Flowallet to track the MCA investments.  The information and data used 

to initially populate the Flowallet portal were derived from the spreadsheets Baker had used 

previously to track those investments, which Baker provided to the software developer.  

43. Baker arranged for MCA investors to be given Flowallet login credentials, and he 

told investors they could access the Flowallet portal to view their investments, the growth in their 

investments, and the interest they had accrued.   

44. For each investor, Flowallet would display, and investors could see, information for 

each “Account” (i.e., each MCA Purchase Agreement or investment), including, as shown in the 

screenshot below (from the Flowallet account of Investor A, see infra § II(D)(i)): 

(i) the number and amount of “Received deposit[s]” (or principal invested), 

(ii) the “Interest Paid” (which reflected the amount of interest owed to the 
investor, not what the investor had actually received), 

(iii) the “Total” (summing (i) and (ii)), and  

(iv) the purported “Growth Rate” (the percentage by which the investor’s 
principal had grown).   

 

45. Baker led investors to believe that the “Total” (reflected in their Flowallet 

“Dashboard”) represented an available balance from which they could request redemptions or 

withdrawals.  In fact, as Baker and Natario each knew, or were reckless in not knowing, there were 

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not sufficient funds available if all investors were to request withdrawals of their “Total” amounts 

(of principal and accrued interest) at the same time. 

46. For example, Baker told Investor B (see infra § II(D)(ii)) that Flowallet was a visual 

representation of Investor B’s MCA investment and was intended to give him and other investors 

clarity on the status and availability of investor funds.  Based on what Investor B’s Flowallet 

account displayed under the “Total,” Investor B believed he had approximately $2.3 million 

available for him to withdraw.  The Flowallet portal, and the information it reflected, was a factor in 

Investor B choosing to make additional investments in the MCA venture.  

47. Baker also told investors that on Flowallet they could request withdrawals directly in 

or from Flowallet.  For example, on September 8, 2020, an investor asked Baker by text message, 

“How do I do a withdrawal?”  Baker responded the same day, “It’s on the Flowdays tab” and in 

another text immediately thereafter, “Click on a date and enter the [withdrawal amount] number.” 

48. Several investors did, in fact, submit withdrawal requests in Flowallet, and as Baker 

had told investors, those withdrawal requests were displayed on Flowallet—specifically, on a sub-

page called “Flowdays,” which reflected the status of each request as having been “Requested,” 

“Rejected,” or “Approved.” 

49. The Flowallet portal was not connected to any financial institution, and thus the 

process of fulfilling investor withdrawal requests was not automated.  Instead, investor withdrawal 

requests were processed manually by Baker, who would approve or reject the request in Flowallet, 

and by Natario, who, if the request was approved, would authorize the corresponding wire transfer 

from the CFS Checking Account (or one of the other two accounts he controlled).  

50. Flowallet did not provide or display any identifying information concerning the 

purported MCA transactions (apart from the amount of “Interest Paid” to investors from these 

supposed transactions) or the entities that purportedly received MCAs financed by investor funds.  

D. Additional Material Misrepresentations and Deceptive Acts  

51. In carrying out the scheme, Defendants made several materially false and misleading 

statements to investors (in addition to those they made in the MCA Purchase Agreements), and 

engaged in other deceptive conduct.    

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52. Baker, in particular, made numerous material misrepresentations in soliciting 

investors, convincing investors to reinvest, and otherwise carrying out the fraudulent scheme. 

53. Representative examples of Baker’s material misrepresentations to, and both Baker’s 

and Natario’s deceptive acts toward, specific investors, are set forth below. 

(i) Investor A  

54. In soliciting investors, Baker made oral, material misrepresentations similar to those 

that he and Natario made to investors in the MCA Purchase Agreements:  that investor funds would 

be used to make MCA loans to small businesses, and that the interest earned as a result of those 

MCA transactions would be used to fund promised 16% to 18% returns.   

55. For example, in or around November 2020, Baker solicited a BA member (“Investor 

A”) to make a $700,000 investment in “Creative Financing” through a North Dakota corporation 

controlled by Investor A.   

56. In soliciting Investor A’s investment, Baker described the opportunity as an MCA 

investment that would yield an 18% rate of return.  Baker told Investor A the MCA investment was 

very solid and that Investor A could start withdrawing money from his account after only two 

months.   

57. In addition, Baker showed Flowallet to Investor A and explained that, on Flowallet, 

Investor A could see and track his investment and learn when he would receive investment 

distributions.   

58. Based on Baker’s representations, Investor A believed his investment would earn the 

promised 18% return and decided to invest.   

59. On or around November 23, 2020, Investor A wired $700,000 to the CFS Checking 

Account controlled by Natario.   

60. Investor A did not receive any purported interest payments, and only approximately 

$25,000 of his invested principal was returned, well after Defendants’ scheme had collapsed.  

(ii) Investor B  

61. In February 2020, Baker began soliciting investments from another BA member, 

who resided in Texas (“Investor B”).  Baker pitched the MCA venture investment opportunity to 

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Investor B primarily by phone.   

62. During those phone calls, Baker told Investor B that Natario, who by that time was 

also a BA member, was his partner and that Baker and others in the BA group were on the ground 

floor of this investment opportunity. 

63. In soliciting Investor B’s initial and subsequent MCA investments, beginning in 

February 2020 and continuing through early October 2020, Baker made the following materially 

false and misleading representations to Investor B: 

(i) Baker told Investor B that he (Baker) had invested over $1 million of his own 

money in the MCA venture. 

(ii) Baker told Investor B that he (Baker) had secured a home equity line of credit 

(“HELOC”) to generate additional liquidity to invest in the MCA venture. 

(iii) Baker told Investor B that the MCA loans to the supposed merchants were 

collateralized at 150% of the loan value and that they would be able to recover all funds via 

the merchant-recipients’ collateral. 

(iv) Lastly, Baker told Investor B that the MCA venture had experienced a 

merchant-recipient default rate of only four percent. 

64. These misrepresentations were false and misleading.  Baker had not invested over $1 

million in the MCA venture, nor had he obtained a HELOC to do so.  Further, because no MCA 

loans were actually made, such loans could not be collateralized (at 150% or otherwise) and there 

could be no default rate (of four percent or otherwise).  Baker knew he had not invested $1 million 

of his own money to invest or obtained a HELOC to do so.  And he knew, or was reckless in not 

knowing, that there were no MCA loans made, rendering his collateralization and default-rate 

statements false and misleading.   

65. The material misrepresentations Baker made created, and were designed by Baker to 

create, the false and misleading appearance that investing in the MCA venture was safe, legitimate, 

worthwhile, and a great opportunity to make considerable returns in a short period of time. 

66. Based on Baker’s misrepresentations, Investor B invested a total of approximately 

$954,000 in the MCA venture between March 1 and October 6, 2020.   

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67. Specifically, on March 1, 2020, Investor B signed an MCA Purchase Agreement (on 

behalf of an entity he controlled) to invest $100,000.  Natario signed the agreement on behalf of 

Creative Foam Shapes the same day.   

68. After executing the agreement, Investor B wired $100,000 from his entity’s bank 

account to the CFS Checking Account. 

69. Section 4(C) of the March 1, 2020, MCA Purchase Agreement provided that Investor 

B would receive purported “interest” payments, derived from MCA transactions, “every week.”  

Between March 1 and April 6, 2020, four payments (ranging in amount from $9,833 to $11,800) 

were wired from the CFS Checking Account to Investor B. 

70. On April 8, 2020, Investor B signed another MCA Purchase Agreement (on behalf of 

another entity he controlled), investing an additional $160,000 in the MCA venture.  Natario also 

signed this agreement on behalf of Creative Foam Shapes.   

71. For Investor B’s subsequent investments, Baker encouraged Investor B to “roll over” 

or reinvest his principal and accrued interest into new investments.  After Investor B’s March and 

April 2020 investments, Investor B’s subsequent investments were not memorialized in written 

MCA Purchase Agreements.  Following what Investor B thought was Baker’s example, Investor B 

secured and used a HELOC to fund approximately $200,000 of his subsequent investments in the 

MCA venture. 

72. In all, Investor B invested approximately $954,000 between March and October 

2020, and he received just over $159,000 in purported interest and principal payments from the CFS 

Checking Account. 

(iii) Investor C  

73. Also in early February 2020, Baker solicited an investment from another BA 

member, who resided in Florida (“Investor C”). 

74. Baker and Investor C discussed the MCA venture investment opportunity by phone 

and via Skype messaging. 

75. In describing the MCA venture, Baker told Investor C: 

(i) that he had a partner and before he and his partner loaned money to any small 

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business, they made sure there was hard collateral to protect the MCA loans, in the form of 

real estate or other assets;  

(ii) that if he and his partner were not receiving the MCA interest payments from 

an MCA merchant-recipient, they would get their money back by obtaining and selling the 

collateral; and 

(iii) that he and his partner reviewed the finances and credentials of potential 

MCA merchant-recipients to make sure that each business was qualified to receive an MCA 

loan. 

76. As Baker knew, or was reckless in not knowing, these statements were false and 

misleading.  Again, there were no MCA loans.  There was no qualification or review process for 

MCA loan recipients.  There was no collateral from MCA loan recipients, and neither Baker nor 

Natario had undertaken the process of obtaining or selling collateral in the event of an MCA loan 

recipient defaulting. 

77. Baker promised Investor C an investment rate of return of approximately 18%.  

Baker told Investor C that this rate was far better than Investor C could obtain by trading on the 

stock market, and that nowhere else could Investor C get returns so high in just 12 weeks. 

78. The above statements by Baker led Investor C to believe that if he invested in the 

MCA venture, he would earn a high profit in a short period of time and his investment would be 

safe and protected.  

79. On or around February 11, 2020, after discussing the investment with Baker, 

Investor C invested $150,000, wiring the funds to the CFS Checking Account as Baker instructed 

him to do.   

80. At the time of his initial investment, Investor C asked if there was paperwork for the 

investment.  Baker told him there was not, explaining that paperwork and other administrative 

matters were too much of a hassle. 

81. Between late February and early March 2020, Natario wired purported interest 

payments to Investor C, each in the amount of $14,750, and totaling $44,250.  In fact, these were 

Ponzi payments funded, at least primarily, by new investor money.  

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82. On or around March 4, 2020, Baker messaged Investor C on Skype, “Let me know 

when you want to add more and I will get you squared away … We have some really big deals 

coming up that are available whenever you [and your brother] are.”  (Investor C’s brother had also 

invested.)  In truth, there were no upcoming MCA deals, “really big” or otherwise, as Baker knew 

or was reckless in not knowing.  

83. Just over an hour later, Investor C responded to Baker on Skype:  “Awesome great to 

hear man” and said he and his brother were “definitely on board with adding more” money to their 

MCA investments.  

84. On or around March 12, 2020, Investor C invested another $100,000.  

85. Investor C continued to receive Ponzi payments between mid-March and mid-July 

2020, and during that time invested another $250,000.   

86. Investor C ultimately invested a total of over $500,000 in the purported MCA 

venture, and he received approximately $447,000 in principal and purported interest.  

(iv) Investor D  

87. Early in the scheme, in February 2020, Baker also solicited an investment from a 

Florida resident who was also a member of the BA (“Investor D”). 

88. Baker met with Investor D in person at least once, and they otherwise communicated 

by phone and text message, to discuss the MCA investment opportunity.  

89. In soliciting Investor D’s investment, Baker told her that:  (i) investor funds would 

be used to finance MCA loans to businesses; (ii) she would be paid high returns very quickly; (iii) 

the MCA loans would be collateralized; (iv) multiple MCA loans had already been provided to 

several merchant-recipients; and (v) MCA recipients’ failure to pay was “very minimal.”  These 

statements were false and misleading, as discussed above.  

90. Baker provided Investor D with an MCA Purchase Agreement between her and 

Creative Financing dated February 14, 2020. 

91. Based on her conversations with Baker, Investor D decided to invest $25,000 in mid-

February 2020. 

92. Between late February and early May 2020, Natario, almost weekly, wired purported 

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interest payments to Investor D, each in the approximate amount of $2,458, and totaling 

approximately $27,041.  In fact, these were Ponzi payments funded by new investors’ money.  

93. On or around May 5, 2020, Investor D made an additional investment, rolling over 

the initial $25,000 and wiring an additional $30,000 to the CFS Checking Account Natario 

controlled.  

94. Investor D made additional investments in the amount of $50,000 each, in July, 

August, September, and twice in November of 2020.  In all, Investor D committed over $300,000 to 

the purported MCA venture, and she ultimately received only approximately $84,500 in principal 

and purported interest from Natario.  

(v) Investor E  

95. In late May 2020, three months after the scheme had begun and during which time 

no MCA loans had been made, Baker solicited a $150,000 investment from a BA member residing 

in Florida (“Investor E”).   

96. Baker told Investor E that Natario was Baker’s “business partner” and that the MCA 

investment opportunity was “bigger than anything he had ever worked on” and “as safe as safe can 

be.”   

97. After receiving purported investment returns in October 2020, Investor E committed 

another $120,000 to the MCA venture in late October and November 2020.  Investor E ultimately 

recovered only approximately $36,500 of the $270,000 he had invested in total.  

98. Between May and November 2020, Investor E asked Baker for information 

concerning the purported MCA transactions, including the identity of the MCA recipients.  In 

response, Baker told Investor E the requested information was proprietary and confidential and 

would not be shared.  That statement was false and misleading because there were no MCA 

transactions or MCA recipients, so there was no such information to be considered proprietary or 

confidential.  

(vi) Investor F  

99. Later in the scheme, in early November 2020, Baker solicited at least three MCA 

investments, totaling approximately $390,000, from another BA member residing in Florida 

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(“Investor F”). 

100. In soliciting Investor F’s investments during that period, Baker made several 

materially false and misleading statements, including that:  (i) the MCA investment was safe; (ii) 

investor funds would be used to finance MCA transactions to generate investor returns at a 16% 

rate; and (iii) the default rate on the MCA loans was “miniscule.”   

101. These statements to Investor F were false and misleading, because investor funds 

were not used on MCAs but to pay other investors, rendering the investments far from safe.  

Likewise, there was no MCA default rate because there were no MCAs.   

102. Further, Baker told Investor F that Baker was invested in the same MCA venture and 

that he had refinanced his home for $3.9 million to generate liquidity to invest.  Investor E later 

learned that Baker did not even own a home. 

103. Before investing in the MCA venture, Investor F spoke with several BA members 

who had already invested, who told Investor F that they were making money from their MCA 

investments.  Of course, the investors with whom Investor F spoke did not know the money they 

were “making” was simply the invested principal of other investors. 

104. Based on those conversations and Baker’s representations, verbally and in the MCA 

Purchase Agreements Baker provided, Investor F decided to make multiple investments, totaling 

approximately $390,000, including funds from his retirement accounts. 

105. At least two of Investor F’s investments were memorialized in MCA Purchase 

Agreements.  One agreement was signed by an “Authorized Signatory” of Investor F’s individual 

retirement account (“IRA”), and also by Investor F, who added by hand, “Read And Approved.”  

Another agreement was signed by Investor F on behalf of an entity he controlled, and by Baker as 

“Patch Baker, CEO” for “Flowallet Underwriter.”  However, both agreements identified “Creative 

Financing Inc.” as the “Company” with whom investors were contracting and did not otherwise 

mention Flowallet or define the term “Flowallet Underwriter.” 

106. Between November 5 and 11, 2020, Investor F transferred, or caused to be 

transferred, $390,000 from his three accounts to the CFS Checking Account controlled by Natario.   

107. After November 11, 2020, Investor F never received any purported interest payments 

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or the return of his principal.  Baker and Natario simply misappropriated Investor F’s funds, and 

Defendants used them to, among other things, make purported interest payments to other investors, 

enabling them to conceal and extend the scheme for a longer period of time. 

E. Defendants Continue to Deceive Investors and the Scheme Collapses 

108. By December 2020, Natario had dissipated most of the funds, including by sending 

more than $1 million to Baker.  As a result, the Ponzi payments to most investors halted 

temporarily, and Baker and Natario stopped processing investor withdrawal requests.  

109. Around the same time, several investors, including Investor A, repeatedly tried to 

access Flowallet to check the status of their investments but could not gain access.  

110. Meanwhile, Defendants continued to mislead investors and solicit additional 

investments to perpetuate their fraudulent scheme. 

111. For example, on or around January 15, 2021, Investor C asked Baker, on Skype, 

“How [have] loan applications been since November?  Everything is as usual?”  As reflected in the 

screenshot below, Baker responded:  “Yo Homie!  The MCAs are crankin!”—creating the false and 

misleading impression that the MCA venture was not only legitimate but thriving, and that Investor 

C’s investment remained safe.   

 

112. But, at the time, Investor C’s and others’ investments were not safe.  By the end of 

January 2021, the CFS Checking Account balance was less than zero, and the total balance of all 

three accounts Natario controlled was $132. 

113. To further their scheme, Defendants solicited additional investments, including from 

a small number of earlier investors who had continued to receive Ponzi payments from Natario or 

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who were not aware that Defendants were defaulting on payments owed to other investors.   

114. From January through February 2021, Defendants were able to solicit and obtain 

$495,000 in additional investments, including $165,000 from an earlier investor, a Nevada resident 

who had already invested $250,000 (“Investor G”).  In soliciting Investor G’s initial, $250,000 

investment in or around September 2020, Baker had told Investor G that he (Baker) had invested 

over $45 million in the MCA venture—a false statement Baker knew to be a lie. 

115. Almost immediately, Natario used nearly all the $495,000 in newly invested funds to 

make more Ponzi payments to earlier investors and to pay and otherwise enrich himself, see infra § 

IV.   

116. By the end of February 2021, the CFS Checking Account had a balance of 

approximately $58, and the total balance of the three accounts Natario controlled was 

approximately $139. 

117. From the spring through the fall of 2021, several investors repeatedly attempted to 

reach Baker (and later, Natario) and figure out what had happened to their investment proceeds and 

why their withdrawal requests were not being processed. 

118. During that period, Baker set up a Zoom videoconference call with a group of BA 

investors, including Investors A and B, to address their complaints and answer their questions.  

Natario joined the call.   

119. On the Zoom call, Baker and Natario represented that they were having issues with 

the bank (at which the CFS Checking Account was held) distributing investment proceeds and were 

working diligently to correct the issue.  Neither Baker nor Natario told investors on the call that 

their withdrawal requests had not been processed because their investment proceeds were gone—

having been used not to fund MCA transactions, as promised, but to carry out their fraudulent 

scheme.  

120. Baker separately told investors that, due to the high volume and constant nature of 

transactions, the bank had frozen the CFS Checking Account. 

121. In response to an April 13, 2021, Skype message from Investor C inquiring about his 

withdrawal request, which had not been approved, Baker told Investor C, “it is trapped in [the 

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bank]” and that it “[s]hould be cleared up soon.” 

122. It was not cleared up soon.  Between April and June 2021, Investor C sent several 

Skype messages to Baker inquiring about his MCA investment.  Baker replied only once, on May 

25, 2021, telling Investor C that he (Baker) had been “traveling almost non-stop”; that he was “still 

working on the bank”; and that “it’s been a nightmare for me on this side.”   

123. After the Zoom call with some of the BA investors, Baker generally stopped 

responding to investor emails and calls.  

124. By the summer of 2021, many investors, who had been unable to reach or 

communicate with Baker, continued to pressure Natario to return their invested principal and 

promised interest. 

125. For example, Investor B continued to ask Natario about the status of his investment 

in the summer of 2021.  In response, in or around August 2021, Natario created and sent Investor B 

a sham monthly statement for a “Creative Foam” account at the bank.   

126. That statement falsely reflected a July 2021 ending balance of approximately $5.8 

million.  In truth, the balance for that account at the time was $18.    

127. Natario used the fake statement to lead Investor B to believe his funds were safe and 

there was sufficient liquidity to make the promised principal and interest payments.   

128. However, as Natario well knew, Investor B’s funds were gone and there was no 

sufficient liquidity to pay Investor B or any other investor.  

129. In November 2021, Natario executed release agreements and promissory notes with 

multiple investors, including Investors A, B, C, and D (or entities they controlled and through which 

their MCA investments had been made).  In the release agreements, Natario “accepted 

responsibility and “agree[d] to be personally liable for” repaying the plaintiffs’ invested principal.   

130. Natario never made any of the payments owed on the promissory notes.   

131. As a result of this conduct, on August 24, 2022, a group of investors brought a civil 

action against Natario in Florida State court, suing for breach of the promissory notes, captioned 

Roka Solo 401k Trust, et al. v. Natario, Case No. 22-CA-003326.   

132. As reflected in the Consent Judgment and Final Order entered in that case on 

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September 19, 2022, Natario and plaintiffs reached a settlement agreement requiring Natario pay 

the plaintiffs approximately $5.65 million, plus interest.  The plaintiff investors have thus far been 

unable to collect any of the amounts owed to them by Natario.  

III. DEFENDANTS OFFERED AND SOLD THE MCA INVESTMENTS AS SECURITIES 

133. Natario and Baker offered and sold the MCA investments, including the MCA 

Purchase Agreements, as investment contracts and thus securities.  

134. An “investment contract” is “a contract, transaction, or scheme” whereby the 

investor (1) invests his or her money, (2) in a “common enterprise” and (3) is “led to expect profits” 

derived “from the efforts of the promoter or a third party.”  SEC v. W.J. Howey Co., 328 U.S. 293, 

298-99 (1946).   

135. These three prongs of the Howey test are satisfied here.   

136. First, investors paid money that was sent to the CFS Checking Account controlled 

by Natario.  

137. Second, the “common enterprise” prong is satisfied because (i) Baker told 

investors their investments would be pooled together and used to fund the MCA venture, and 

investor funds, in fact, were pooled in a single account—the CFS Checking Account Natario 

controlled and used to make the Ponzi payments; (ii) the MCA Purchase Agreements specified that 

each investor would “receive his pro rata share” of the loan repayments made by the (supposed) 

MCA recipients; and (iii) Defendants pitched to investors, and the MCA Purchase Agreements 

outlined, a single MCA venture on which investors’ fortunes would depend.  

138. Third, investors were led by Defendants to reasonably expect profits derived from 

the efforts of others, including the Defendants, Creative Foam Shapes, Creative Financing, and the 

purported MCA recipients.  The MCA Purchase Agreements provided just that:  investors would 

receive the stated, high interest rate (up to 18%) through the efforts of “the Company” (Creative 

Financing or Creative Foam Shapes), which would provide MCAs to, and receive repayments from, 

certain small businesses.   

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IV. DEFENDANTS MISAPPROPRIATED INVESTOR FUNDS AND ENRICHED THEMSELVES 

139. As a result of the scheme detailed herein, Natario and Baker defrauded investors of 

over $10 million and enriched themselves.  Each of Natario and Baker obtained money directly or 

indirectly by means of their untrue statements to investors of material facts and their omissions of 

material facts in connection with their offers and sales of the MCA investments. 

140. Natario received all investor funds, more than $10 million, in the CFS Checking 

Account that he controlled.  

141. During the period February 2020 through February 2021, Natario used an aggregate 

of approximately $3 million to make Ponzi payments to investors. 

142. In August 2020, Natario hosted Baker and one investor for an all-expenses-paid trip 

to Las Vegas, using investor funds to pay for, among other things, first-class travel, chauffeur 

service, and a suite at the Bellagio hotel and casino. 

143. Natario also used investor funds to enrich himself.  For example, beginning in March 

2020, Natario used over $1.14 million to buy real property in his name or the names of entities he 

controlled. 

144. Natario further used investor funds to pay off amounts charged to his personal credit 

cards, to make additional payments to himself totaling approximately $625,000, and to make 

withdrawals of approximately $1.5 million.  

145. Baker was also enriched by Defendants’ scheme.  Between late February 2020 and 

early December 2020, Natario transferred to Baker over $1 million from the CFS Checking Account 

that housed investors’ funds.  In all, Natario made approximately 28 payments to Baker during that 

time period, ranging in amount from $5,625 to $100,000.      

146. Baker has contended that these payments derived entirely from various transactions 

or deals in which Natario had invested him or from a variety of business arrangements that he had 

with Natario, although Baker has been unable to provide support for those purported arrangements.   

147. All but one payment to Baker came from the CFS Checking Account that held the 

investor funds from the sale of MCA investments; Baker participated in the scheme and knew that 

the investor funds had been deposited into that account.  (The source of the one other payment to 

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Baker was a Creative Foam Shapes’ savings account at the same bank, which Natario also 

controlled).   

148. In addition, Natario used investor funds from the CFS Checking Account to pay 

Creative Foam Shapes’ actual business expenses.  The CFS Checking Account included funds from 

Creative Foam Shapes that were commingled with MCA investor funds.  However, Creative Foam 

Shapes’ funds were not sufficient to cover the Ponzi payments to earlier MCA investors or the 

amounts Natario paid to himself and Baker.  

V. DEFENDANTS’ TOLLING AGREEMENTS WITH THE SEC 

149.  Each Defendant has entered into two tolling agreements with the SEC, in which 

each agreed to toll any statute of limitations applicable to the conduct and claims alleged herein for 

the period between February 1 and June 1, 2025.  

CLAIMS FOR RELIEF 

CLAIM ONE 
Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)] 

(Against Both Defendants) 

150. The SEC re-alleges and incorporates by reference paragraphs 1 through 149 above. 

151. By engaging in the conduct described above during the relevant time period, each 

Defendant, directly or indirectly, in the offer or sale of securities by the use of means or instruments of 

transportation or communication in interstate commerce or by use of the mails: (a) knowingly or 

recklessly employed one or more devices, schemes, or artifices to defraud; (b) knowingly, recklessly, 

or negligently obtained money or property by means of one or more untrue statements of a material 

fact or by omitting to state a material fact necessary in order to make the statements made, in light of 

the circumstances under which they were made, not misleading; and (c) knowingly, recklessly, or 

negligently engaged in one or more transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon the purchaser.  

152. By reason of the foregoing, each of the Defendants violated, and unless restrained 

and enjoined will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

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CLAIM TWO 
Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78(b)] and Rule 10b-5 

Thereunder [17 C.F.R. § 240.10b-5] 
(Against Both Defendants) 

153. The SEC re-alleges and incorporates by reference paragraphs 1 through 149 above. 

154. By engaging in the conduct described above during the relevant time period, each 

Defendant, directly or indirectly, in connection with the purchase or sale of a security, and by the 

use of means or instrumentalities of interstate commerce, of the mails, or of the facilities of a 

national securities exchange, knowingly or recklessly:  (a) employed one or more devices, schemes, 

or artifices to defraud; (b) made one or more untrue statements of a material fact or omitted to state 

a material fact necessary in order to make the statements made, in the light of the circumstances 

under which they were made, not misleading; and (c) engaged in one or more acts, practices, or 

courses of business which operated or would operate as a fraud or deceit upon other persons.  

155. By reason of the foregoing, each Defendant violated, and unless restrained and 

enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 

10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that this Court enter a Final Judgment: 

I. 

Finding that Defendants committed the securities law violations alleged in this Complaint;  

II. 

Permanently enjoining Defendants from violating, directly or indirectly, Section 17(a) of the 

Securities Act [15 U.S.C. § 78q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; 

III. 

Permanently enjoining Defendants from participating, directly or indirectly, including, but 

not limited to, through any entity owned or controlled by each of them, in the issuance, purchase, 

offer, or sale of any security, provided, however, that such injunction shall not prevent each of them 

from purchasing or selling securities for each of their own personal accounts, pursuant to Section 

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21(d)(1) and (5) of the Exchange Act [15 U.S.C. § 78u(d)(1) and (5)]; 

IV. 

Ordering Defendants to disgorge all ill-gotten gains they received directly or indirectly, with 

prejudgment interest thereon, as a result of the violations alleged in this Complaint, pursuant to 

Sections 21(d)(3), (5), and (7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), (5), and (7)]; 

V. 

Ordering Defendants to pay civil monetary penalties pursuant to Section 20(d) of the Securities 

Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]; 

VI. 

Granting such other and further relief as this Court may determine to be necessary or 

appropriate. 

VII.  

Retaining jurisdiction over this action in accordance with the principles of equity and the 

Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and 

decrees that may be entered. 

JURY TRIAL DEMAND 

 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands a trial by jury in 

this action of all issues so triable. 

Dated: May 21, 2025   Respectfully submitted, 
 
U.S. SECURITIES AND EXCHANGE 
COMMISSION 
 
/s/ Nicholas C. Margida  
Nicholas C. Margida 
Counsel for Plaintiff 
Securities and Exchange Commission 

 

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