Thirteen families handed over a combined $2.15 million (enough to buy a median-priced American home outright and still have $500,000 left over) to a man who the SEC now alleges had no legitimate plan to grow their wealth — only a plan to take it.

They Called It “Passive Wealth.” The SEC Calls It Fraud.

From approximately August 2019 through May 2021, Joshua Thomas Jackson — operating under the banner of his company Passive Wealth Builders LLC — sold promissory notes to 13 investors. A promissory note is essentially a written IOU: the investor hands over money, and the company promises to pay it back with interest. These are legally classified as securities under federal law, meaning they come with strict rules about disclosure and honesty.

Jackson also operated through two additional entities he wholly owned and controlled: Pocket Bell LLC and Street Divy Inc. The SEC’s complaint alleges that Jackson acted both individually and through these three companies to carry out the scheme — using each entity as an instrument of the broader fraud.

The pitch was straightforward and seductive: give us your money, we will use it to buy and renovate real homes, and you will get paid back with returns. According to the SEC, that pitch was a lie from the start.

The Mechanics of the Alleged Deception

The SEC alleges that Jackson told investors their funds would be used in one of three specific ways: to purchase and renovate residential properties identified for each individual investor, to fund larger real estate development projects, or some combination of both. These representations were material — meaning they were the kind of promises that directly influenced a reasonable person’s decision to invest.

The complaint further alleges that Jackson made these representations while knowing they were false, or at minimum while acting with reckless disregard for their truth. Under federal securities law, that standard — known as scienter — is what separates civil fraud from an honest mistake.

None of the promissory notes Jackson sold were registered with the SEC. Selling unregistered securities is itself a federal violation, separate from the fraud allegations. This means investors had none of the legal protections that registration requires, including mandatory disclosure of risks and the company’s true financial condition.

The Non-Financial Ledger

What the Dollar Amount Cannot Capture

They Were Sold a Dream Designed to Be Broken

The 13 people who invested in Joshua Thomas Jackson’s operation were not naive. They were people who had heard the language of financial independence — “passive income,” “real estate wealth,” “your money working for you” — and decided to take a calculated risk on someone who presented himself as a guide into that world. That is not gullibility. That is the exact response that predatory marketing is engineered to produce in rational adults.

Real estate investment is one of the oldest and most widely recommended paths to building intergenerational wealth in America. For people who do not have access to institutional investors, hedge funds, or family capital, pooling money through notes and private offerings is one of the few doors that appears to be open. Jackson allegedly stood at that door and used it as a trap. The betrayal is not just financial; it is a betrayal of the specific hope that ordinary people can build security outside of a system that is already stacked against them.

Every one of those 13 investors made a decision at a real moment in their real lives. They reviewed a pitch. They signed a note. They transferred money they had earned and saved. The SEC complaint does not tell us who these people are, what sacrifices they made to accumulate those funds, or what they planned to do with the returns. But the structure of the scheme tells us something important: the notes were sold individually, tied to specific properties for specific investors. That means Jackson looked each person in the eye — or its digital equivalent — and made them a personalized promise he allegedly had no intention of keeping.

The Slow-Motion Collapse: How Jackson Allegedly Strung Investors Along

When investors stopped receiving the payments they were owed, Jackson did not come clean. According to the SEC complaint, he instead deployed a series of delay tactics designed to keep investors from taking action while he remained in control of their money. He allegedly presented investors who had stopped receiving payments with a false menu of options: let him find a new buyer for the property, accept a buyout of their interest at a significant loss, or purchase gift cards as some form of resolution.

The gift card detail is worth pausing on. Gift cards are a hallmark of consumer fraud precisely because they are nearly impossible to trace and impossible to reverse. Legitimate real estate businesses do not resolve investor disputes with gift cards. The SEC’s inclusion of this detail in the complaint signals that Jackson allegedly used these tactics to quietly reduce his liability while giving investors the psychological impression that something was being done about their situation.

The buyout-at-a-loss option is equally revealing. If an investor had put in $50,000 (roughly 14 months of take-home pay for the median American worker), Jackson allegedly offered to buy back their interest for less than they paid. This meant investors faced a brutal choice: accept a guaranteed loss and walk away, or continue waiting for a resolution that the SEC alleges was never coming. That is a designed trap, and the emotional weight of watching hard-earned money disappear while being offered a “deal” to lose even more of it is a specific kind of financial trauma.

The Dignity of Ordinary Investors, Stripped Away

There is a specific humiliation in being defrauded by someone who used the language of empowerment to do it. “Passive Wealth Builders” is a name that promises agency, growth, and independence. It promises the investor will be the winner in this transaction. The SEC alleges the reality was the opposite: investors were the mark, and Jackson was the one building wealth — from their money, at their expense.

The SEC’s complaint covers a period from August 2019 through May 2021. That window spans the COVID-19 pandemic, one of the most economically destabilizing events in living memory for working Americans. We do not know how many of these 13 investors were facing layoffs, reduced hours, or other pandemic-era financial stress when they made the decision to trust Jackson with their savings. The timing is not incidental. Economic desperation and the search for alternative income streams exploded during the pandemic, and fraudsters who were already operating accelerated their activity during that window.

Legal Receipts

Direct From the SEC’s Complaint — Their Words, Not Ours

“Jackson fraudulently sold approximately $2.15 million in promissory notes to 13 investors.” SEC Complaint — Paragraph 1 (Summary Allegation)

“Jackson told investors that their funds would be used either to purchase and renovate residential properties, specific to each investor, or to fund larger real estate development projects.” SEC Complaint — Core Misrepresentation Allegation

“When investors stopped receiving payments from Jackson, he would present investors with options, such as: having Jackson find another buyer for the property; having Jackson buy out the investor’s interest at a significant loss to the investor; or purchasing gift cards.” SEC Complaint — Description of Stall and Harm Tactics

“While engaging in the course of conduct described above, the Defendant acted at least negligently.” SEC Complaint — Scienter Allegation (Paragraph 39)

“By reason of the foregoing, the Defendant, directly and indirectly, has violated and, unless enjoined, will continue to violate Sections 5(a)(2) and 5(a)(3) of the Securities Act [15 U.S.C. §§ 77e(a)(2) and 77e(a)(3)].” SEC Complaint — Count II: Unregistered Securities Violation

“By reason of the foregoing, the Defendant, directly and indirectly, has violated and, unless 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].” SEC Complaint — Count I: Securities Fraud Violation

The Numbers at a Glance

Societal Impact Mapping

Economic Inequality: Who Gets Targeted, and Why

The “passive income” and “real estate wealth” marketing space disproportionately targets people who have been systematically excluded from traditional investment vehicles. Institutional investing requires accreditation thresholds — income above $200,000 per year or net worth above $1 million — that most working Americans will never reach. Private real estate notes, marketed as “accessible” alternatives, fill that gap. Predatory operators know this, and they use the language of inclusion to identify their victims.

The SEC’s complaint identifies 13 investors and a total of approximately $2.15 million (enough to seed a small community development fund for an entire neighborhood). That averages out to roughly $165,000 per investor — a staggering amount representing years of savings for most working families. When that money disappears into an alleged fraud scheme, the victims do not get a bailout. There is no FDIC insurance on a promissory note. There is no automatic recovery mechanism. The SEC seeks disgorgement, but disgorgement requires the money to still exist.

The scheme also operated during a period — 2019 through 2021 — when real estate values were climbing sharply in many U.S. markets, creating enormous FOMO (fear of missing out) among working people watching homeownership and investment become increasingly out of reach. That desperation is not a character flaw in investors; it is a structural condition that fraudsters actively exploit. Jackson’s alleged scheme plugged directly into that anxiety.

Public Health: The Financial Trauma No One Counts

Financial fraud produces documented, measurable health outcomes. Research consistently links financial loss — especially loss tied to fraud and betrayal — to elevated rates of depression, anxiety disorders, sleep disruption, and stress-related physical illness. These outcomes are amplified when the loss involves retirement savings, home equity, or money set aside for children’s education. The SEC complaint does not tell us what these 13 investors planned to do with their returns, but the structure of the scheme — promising passive income for retirement or wealth-building — suggests this was long-term money, not short-term speculation capital.

The mental health cost of waiting is also significant. Jackson allegedly strung investors along after payments stopped, offering fake options and stall tactics. That period of uncertainty — watching money disappear while being offered gift cards as compensation — produces a specific psychological harm that clinicians call “prolonged stress exposure.” Victims are not just hurt at the moment of loss; they are harmed across every week they spend waiting for a resolution that does not come.

The “Cost of a Life” Metric

What Now?

Who Is Accountable — and What You Can Do

The Defendant Named in the SEC Complaint

• Joshua Thomas Jackson — Named defendant; alleged to have acted individually and through entities he wholly owned and controlled
• Passive Wealth Builders LLC — Defendant entity; the primary marketing vehicle for the alleged scheme
• Pocket Bell LLC — Defendant entity; operated as an instrument of the alleged fraud
• Street Divy Inc. — Defendant entity; operated as an instrument of the alleged fraud

Regulatory Watchlist

The following agencies have jurisdiction over conduct of this type. If you or someone you know has invested with any of the entities named above, contact them directly:

The SEC’s Requested Remedies

• Permanent injunction barring Jackson and his entities from future securities violations
• Disgorgement of all ill-gotten gains plus prejudgment interest
• Civil monetary penalties under the Securities Act and Exchange Act
• Any other relief the court deems appropriate

What Everyday People Can Do Right Now

If you are looking at a private promissory note investment, check the SEC’s EDGAR database before you sign anything — registration of securities is a legal requirement, not a formality. Report suspected securities fraud to the SEC at sec.gov/tcr. Connect with your local tenant and community finance advocacy organizations, who often run free investment fraud education workshops. Real wealth-building in community happens through mutual aid, credit unions, and transparent cooperative structures — not through a company whose name promises you passive returns while hiding how your money is actually used.