The Scheme in Plain English: A Ponzi with a Logo

In the summer of 2019, Joel J. Natario, a 54-year-old man who described himself as a successful entrepreneur from Phoenix, Arizona, walked into a private networking event in Tampa, Florida. The event was run by a group called the Board of Advisors, or “BA.” To join, members paid roughly $25,000 per year. This was not a room full of unsophisticated marks. These were small business owners, entrepreneurs, and investors who believed they were among peers.

Natario met Jefferson Scott Baker, known to his circle as “Patch,” a 47-year-old marketing executive who would go on to become the public face of a scheme that had no legitimate business behind it at any point in its existence. The two discussed a concept: a merchant cash advance business, in which pooled investor money would be loaned to small businesses at high interest rates. The high interest rate would then be shared as returns with investors. Natario would run operations. Baker would bring in the money.

The pitch was credible. Merchant cash advances are a real product. Small businesses that cannot get traditional bank financing sometimes use them. The 16% to 18% returns promised over a 12-week period sounded aggressive but plausible in the alternative finance space. Baker was a trusted member of the BA community. Natario had credentials. The plan, on paper, made sense.

Except there was no plan. According to the SEC’s complaint filed on May 21, 2025, no MCA loan was ever made to any small business at any point during the entire scheme. Not one. The promised collateral securing the loans did not exist. The merchant recipients did not exist. The qualified review process Baker described to investors did not exist. The entire venture, from the moment money first arrived in the account in February 2020, was a Ponzi scheme: early investors got paid using the money of later investors, and the whole operation depended on a continuous flow of new victims to keep the earlier ones quiet.

To make the deception durable, Natario and Baker built infrastructure. They created written purchase agreements, a web-based investor portal called “Flowallet,” and a paper trail of wire transfers that looked, at first glance, like a functioning business paying out returns. What investors saw in their Flowallet dashboards, what they received in weekly wire transfers, and what Baker told them on the phone were three separate constructions of a reality that did not exist. The only real thing in this entire operation was the money flowing out of investors’ bank accounts and into one controlled by Natario.

The Money Trail: What Investors Put In vs. What They Got Back

The following chart represents the documented investment amounts and recoveries for the named investors in the SEC complaint. All figures are drawn directly from the source document.

The Non-Financial Ledger: What the Dollar Amounts Cannot Capture

When the SEC files a complaint, the numbers take center stage. Ten million dollars. Twenty-three investors. Sixteen to eighteen percent returns. These figures are precise and prosecutable. But numbers are a filter. They describe the fraud without describing what the fraud actually did to specific human beings who placed real trust in other human beings and had that trust systematically destroyed over the course of nearly two years. This section does not deal in numbers. It deals in what happened.

Consider the situation of the investor the complaint identifies only as Investor B. He lived in Texas. He was a member of a private networking group for entrepreneurs. He was not naive. He was the kind of person who had built something, who had enough savings to consider a $100,000 investment and survive it if it went badly. But Baker did not just take his money. Baker told Investor B that he had personally invested over one million dollars of his own money in this same venture. Baker told him that he had secured a home equity line of credit to invest even more. He told him the loans were collateralized at 150% of their value. He told him the default rate was a mere four percent. Each one of those statements was a deliberate lie. Investor B took out his own home equity line of credit, following what he believed was Baker’s lead, and used it to fund approximately $200,000 of subsequent investments in a venture that had never made a single loan. He ultimately invested $954,000. He got back just over $159,000. The home equity debt he took on to invest in something that never existed remains unaddressed by the complaint.

Investor F’s situation is perhaps the most viscerally infuriating. He invested money from three separate accounts, including funds drawn from his individual retirement account. He had spoken with other BA members who had already invested and were receiving payments. Those members told him they were making money. They were not lying to him. They genuinely believed it. They did not know the money they were receiving was simply the principal of the next wave of investors, recycled and returned to them as fake interest. This is the particular psychological cruelty of a Ponzi scheme: it converts earlier victims into unwitting endorsers, their testimony of satisfaction serving as the most effective sales tool the fraudsters have. Investor F transferred $390,000. After November 11, 2020, he received nothing. No interest payments. No principal returned. No response to his questions. According to the SEC’s complaint, Baker and Natario “simply misappropriated” his funds. Investor F’s retirement savings are gone.

Investor A wired $700,000 in a single transaction on November 23, 2020, through a corporation he controlled. Baker had shown him the Flowallet portal and explained how he could track his investment growing in real time. He described the opportunity as “very solid” and told Investor A he could begin withdrawing money after only two months. By December 2020, Investor A was trying to log into Flowallet and finding he could not gain access. When the Zoom call eventually happened, Baker and Natario told the assembled investors that a bank was having trouble distributing investment proceeds. Investor A received no interest payments at all during the life of the scheme. Only approximately $25,000 of his $700,000 principal was ever returned, and that happened “well after Defendants’ scheme had collapsed.” The fraction returned amounts to roughly 3.5 cents on the dollar.

Investor E explicitly asked Baker, multiple times between May and November 2020, for basic information about the MCA transactions: who the recipients were, what businesses were being funded. Baker told him the information was “proprietary and confidential.” This is a particularly calculated form of deception. Baker did not just lie by making things up. He manufactured a plausible-sounding corporate reason for withholding information that did not exist because the underlying business did not exist. The invocation of “proprietary” information weaponized the language of legitimate business secrecy to suppress the most basic due diligence question an investor could ask. Investor E invested $270,000 total and recovered approximately $36,500.

Investor D, a Florida woman, invested over $300,000 across multiple transactions from February through November 2020. She was shown a purchase agreement dated February 14, 2020. She received small weekly wire payments for months. She had every reason to believe the business was functioning. When she eventually could not get her money back, when Baker stopped responding and Natario continued to stall, she had no recourse that worked. A civil action was eventually filed in Florida state court, and in September 2022 a Consent Judgment required Natario to repay approximately $5.65 million to a group of investors including Investors A, B, C, and D. As of the SEC’s filing date, Natario has paid back nothing. The court order exists on paper. The money does not exist anywhere that the investors can reach.

Legal Receipts: The Document Speaks

Every quotation below is taken verbatim from the SEC’s complaint, Case No. 2:25-cv-00895, filed in the United States District Court, District of Nevada, on May 21, 2025. These are not paraphrases. These are the words the federal government put on record.

“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.” SEC Complaint, ¶5 — Summary

“In fact, ‘Creative Financing, Inc.’ was a fictitious company name. It was never incorporated or registered in Nevada or any other state or jurisdiction.” SEC Complaint, ¶28 — The MCA Purchase Agreements

“No MCAs were ever made to any small-business merchants. No such 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.” SEC Complaint, ¶30 — The MCA Purchase Agreements

“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 not sufficient funds available if all investors were to request withdrawals of their ‘Total’ amounts (of principal and accrued interest) at the same time.” SEC Complaint, ¶45 — The Flowallet Investor Portal

“Incredibly, Baker—in soliciting a $250,000 investment from a Nevada resident (Investor G) in or around September 2020—falsely represented that he had invested over $45 million in the MCA venture.” SEC Complaint, ¶8 — Summary

“Baker told Investor E that 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.” SEC Complaint, ¶98 — Investor E

“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 [F] later learned that Baker did not even own a home.” SEC Complaint, ¶102 — Investor F

“On or around January 15, 2021, Investor C asked Baker, on Skype, ‘How [have] loan applications been since November? Everything is as usual?’ 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.” SEC Complaint, ¶111 — Defendants Continue to Deceive Investors

“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.” SEC Complaint, ¶112 — Defendants Continue to Deceive Investors

“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.” SEC Complaint, ¶126 — The Scheme Collapses

“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.” SEC Complaint, ¶142 — Defendants Misappropriated Investor Funds

“Beginning in March 2020, Natario used over $1.14 million to buy real property in his name or the names of entities he controlled.” SEC Complaint, ¶143 — Defendants Misappropriated Investor Funds

“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.” SEC Complaint, ¶145 — Defendants Misappropriated Investor Funds

“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.” SEC Complaint, ¶146 — Defendants Misappropriated Investor Funds

“As reflected in the Consent Judgment and Final Order entered in that case on 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.” SEC Complaint, ¶132 — Civil Action: Roka Solo 401k Trust, et al. v. Natario, Case No. 22-CA-003326

“Baker told Investor C on Skype, ‘it is trapped in [the bank]’ and that it ‘[s]hould be cleared up soon.’ It was not cleared up soon.” SEC Complaint, ¶¶121–122 — The Scheme Collapses

Societal Impact Mapping: Beyond the Victims Named in the Complaint

The SEC’s complaint names specific investors by letter and documents specific dollar losses. But a fraud of this architecture, targeting a networked community of entrepreneurs and channeling money through fake financial infrastructure, does not injure only the twenty-three individuals who wired funds. Its damage spreads through social networks, financial systems, and public trust. The following analysis maps that damage across three dimensions.

Environmental Degradation

Environmental harm may seem like a remote consideration in a securities fraud case, but the pathway is direct. Natario used investor money to purchase real property: over $1.14 million in real estate bought starting in March 2020, held in his name or the names of entities he controlled. Real estate acquisitions financed by fraud represent a specific kind of market contamination. When fraudulently obtained money enters the property market, it displaces legitimate buyers, inflates localized prices, and launders criminal proceeds into physical assets that are far harder to claw back than cash in a bank account.

The properties purchased by Natario with stolen funds were not merely investment assets. They were community resources: housing units, land, or commercial spaces in neighborhoods where other people live, work, and pay market rates. When a fraudster pumps $1.14 million in dirty money into a local real estate market, the effects on affordability and availability are real, even if they are diffuse and hard to trace to a single transaction. The families and small businesses competing for those same properties in 2020, at a time when the housing market was already under extreme pressure from pandemic-driven demand, were competing against a buyer whose entire capital stack was fraudulent.

Furthermore, the scheme’s collapse left a hollowed-out corporate shell. Creative Foam Shapes, Inc., which had been a functioning, if small, Nevada manufacturing company, saw its corporate charter revoked in 2022 after operations ceased in early 2021. A legitimate business that may have employed workers, rented commercial space, and contributed to local economic activity was used as a vehicle for fraud and then discarded. Whatever environmental footprint that business occupied, whatever community and economic ecosystem it was part of, was destroyed not by market forces but by deliberate misappropriation.

Public Health

Financial fraud produces measurable public health consequences. The literature on financial trauma consistently documents elevated rates of anxiety, depression, sleep disruption, and cardiovascular stress among fraud victims. In this case, the scheme ran from February 2020 through at least August 2021. That timeline overlaps almost exactly with the most acute phase of the COVID-19 pandemic. Investors who had placed hundreds of thousands of dollars in what they believed was a safe, short-term investment with a 12-week return cycle were watching that money disappear while simultaneously navigating pandemic-era economic uncertainty, business closures, and personal health crises.

Investor B took out a home equity line of credit to invest additional funds. When the scheme collapsed, he held debt secured against his home that was generating no return. The psychological and physical health implications of holding substantial secured debt on a home while being stonewalled by the people who took your money, while watching a fake portal claim you have $2.3 million available to withdraw and knowing you cannot access any of it, are not hypothetical. Financial precarity is a documented driver of chronic stress and its downstream effects: hypertension, immune suppression, relationship breakdown, and in severe cases, self-harm.

Investor F invested retirement savings. For older investors, the destruction of a retirement account is not just a financial setback. It is a health crisis. Retirement savings represent a specific class of asset, one that is supposed to fund housing, healthcare, food, and social participation in the years when earning capacity declines. When those savings disappear, the downstream result is often delayed retirement, continued or intensified labor under conditions unsuited to aging bodies, foregone medical care, and social isolation. The SEC’s complaint identifies that Investor F drew from an IRA. That money is almost certainly gone permanently. The human cost of that loss will compound over the remainder of that investor’s life.

Baker’s response to Investor C in May 2021, months after the scheme had fully collapsed and the accounts were empty, claiming he had “been traveling almost non-stop” and that “it’s been a nightmare for me on this side,” is a clinical case study in the contempt that fraudsters hold for their victims. Investors were experiencing genuine financial and health crises. Baker was inconvenienced by the paperwork.

Economic Inequality

This fraud was not random in its targeting. Baker solicited investors almost exclusively through the Board of Advisors, a private networking group with a $25,000 annual membership fee. The scheme was, structurally, a fraud that extracted capital from the entrepreneurial middle class: people who had built enough wealth to write five- and six-figure checks, but who were not so wealthy that the loss of $954,000 or $700,000 was merely an accounting entry. These were people for whom that money represented years of business-building, personal savings, pension funds, and home equity.

The architecture of the enrichment is worth examining in detail. Natario and Baker extracted money from working entrepreneurs and redistributed it upward: first-class flights, a suite at the Bellagio, real estate holdings in Natario’s name, and 28 wire transfers totaling over $1 million to Baker. The fraudsters converted the savings of small business owners into their own personal luxury goods and property holdings. This is the precise mechanism of upward wealth transfer that defines predatory financial schemes. The victims did not have access to the financial regulatory infrastructure, legal resources, or market intelligence that might have protected them. Baker knew this. He specifically targeted people he had built trust with through years of shared membership in a community group.

The aftermath deepens the inequality. Investors filed a civil action in Florida state court in August 2022, obtained a judgment in September 2022 requiring Natario to pay $5.65 million plus interest, and have collected nothing. Obtaining a court judgment is expensive. Enforcing it against a person who has no fixed address, having recently lived in Naples, Florida; Ludlow, Massachusetts; and Scottsdale, Arizona, is a resource-intensive legal process that individual investors in their position cannot easily sustain. Natario signed promissory notes and release agreements in November 2021, accepting personal liability and promising to repay investors, and then simply did not pay. The investors who trusted him are now funding years of civil litigation in addition to having lost their original investments. The cost of pursuing justice is itself a regressive tax on the victims of economic crime.

The small businesses that the fake MCA venture was supposedly serving also bear an indirect cost. The merchant cash advance industry, whatever its own predatory characteristics, serves a real market need: businesses that cannot access traditional bank financing. The existence of fraudulent schemes operating under the MCA banner makes legitimate operators in that space more suspect, raises the skepticism of potential investors, and contributes to an overall degradation of trust in alternative financial products that working-class and small business borrowers depend on precisely because the mainstream banking system already excludes them.

The “Cost of a Life” Metric: What the Money Bought

What Now? The Watchlist, the Defendants, and the Next Step

The SEC filed this complaint on May 21, 2025. As of that filing date, the case is in civil enforcement proceedings. Here is what the public record confirms and what you should be tracking.

The Named Defendants

• Joel J. Natario, age 54. No fixed address. Has recently lived in Naples, Florida; Ludlow, Massachusetts; and Scottsdale, Arizona. At the time of the fraud, resided in Las Vegas, Nevada. Owner of Creative Foam Shapes, Inc. (Nevada corporation, charter revoked 2022). Controlled the CFS Checking Account into which all investor funds were deposited. Signed the majority of MCA Purchase Agreements. Made all Ponzi payments. Purchased real estate with stolen funds. Sent Baker over $1 million. Sent at least one investor a doctored bank statement. Has paid back $0 despite a court judgment requiring $5.65 million in repayment.
• Jefferson Scott “Patch” Baker, age 47. Resides in Montgomery County, Pennsylvania. At time of scheme, resided in Barnstable, Massachusetts. Co-owner and CEO of Mobius Media Solutions, Inc. (Massachusetts marketing company, headquartered in Hyannis, MA). Baker was the primary investor recruiter, the face of the scheme to its victims, and the person who made the false oral representations that sealed the deals. Received over $1 million from the investor account. Has offered no verifiable documentation to support his claimed alternative explanations for those payments.

SEC vs Baker Natario PatchDownload

You can read about this scandal by visiting the SEC’s website where there’s currently a press release: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26311

Bloomberg Law also wrote an article about this, but there’s a heavy paywall: https://news.bloomberglaw.com/litigation/entrepreneur-club-members-victimized-in-ponzi-scheme-sec-says

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Aleeia

I'm Aleeia, the creator of this website.

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