Statement Summary
On May 21, 2025, the SEC charged Joel J. Natario and Jefferson Scott Baker (a/k/a “PATCH”) with orchestrating a $10 million Ponzi scheme under the guise of a merchant cash advance business. Between February 2020 and February 2021, they misled approximately 23 investors about the use of their funds, falsely claiming that returns would derive from actual MCA transactions with promised rates of 16% to 18% per twelve-week period. In reality, no MCAs were conducted, and returns were funded mainly through other investors’ contributions. Additional deceptive practices included the creation of a misleading online investor portal and fake bank statements. The SEC’s complaint alleges violations of the Securities Act and the Securities Exchange Act, seeking injunctive relief and penalties against the defendants.
Original Statement
Joel J. Natario; Jefferson Scott Baker
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26311 / May 23, 2025
Securities and Exchange Commission v. Joel J. Natario and Jefferson Scott (a/k/a “PATCH”) Baker, No. 25-cv-00895-JCM-EJY (D. Nev. filed May 21, 2025)
Charges Filed
SEC Charges Promoters of Purported Merchant Cash Advance Business with Operating $10 Million Ponzi Scheme
On May 21, 2025, the Securities and Exchange Commission filed charges against Joel J. Natario and Jefferson Scott Baker for allegedly operating a Ponzi scheme that raised more than $10 million from approximately 23 investors.
According to the SEC’s complaint, between February 2020 and February 2021, Natario and Baker solicited and sold investments in a purported business venture involving merchant cash advances (“MCAs”)—short term loans to small businesses in need of immediate capital. The SEC alleges that Natario and Baker developed and utilized written MCA purchase agreements that falsely stated, among other things, that investor proceeds would be used to fund a portion of the MCAs and that investors would earn rates of return from 16% to 18% for every twelve-week investment period. As alleged, in reality, there was no MCA venture and no MCAs were made. Instead, according to the complaint, purported returns paid to investors were financed, not by actual MCA transactions, but, at least primarily, by other investors’ money.
The complaint further alleges that Natario and Baker engaged in additional 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.
Legal Proceedings
The SEC’s complaint, filed in the United States District Court for the District of Nevada, charges Natario and Baker with violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks injunctive relief, disgorgement with prejudgment interest, and civil penalties against both defendants.
The SEC’s investigation was conducted by Thomas E. Woods IV and Karaz S. Zaki under the supervision of David Frohlich and Michael Brennan, all of the Home Office. The litigation will be led by Nick Margida and supervised by James Carlson.
