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Safe healthcare investment turned out to be shaky student debt

La Jolla's MWM promised couple eight percent a year

William M. Malloy III, who says his fortune goes back to the early 1800s, has been sued in federal court for his alleged role in a Ponzi scheme that is rocking the state of Oregon. In March of last year, the Securities and Exchange Commission filed suit against Aequitas, a Portland firm allegedly running a scheme that bilked 1500 investors of $300 million.

Malloy, from a 2012 San Diego Metro feature story called "40 under 40."

Aequitas told clients that their money would be placed in safe healthcare investments. However, that was not true. Aequitas was actually putting money into student debt related to Corinthian Colleges, one of the most scandalous for-profit institutions that was hit with federal and state charges and ultimately collapsed.

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Malloy's company, La Jolla-based MWM, sold Aequitas-related investments to Thomas Neal Sterchi Jr. and Kristine Sterchi, who together lost $300,000. MWM and Mehta are being sued, along with Malloy, in a suit moved to federal court from state court May 30.

According to the suit, Malloy and Mehta solicited Sterchi to invest his money through MWM. "Sterchi was extremely hesitant," according to the suit, because he had recently been skinned by another investment advisor. Malloy and Mehta said they were investment experts, according to the suit, and MWM was a large organization. Actually, the firm only consisted of Malloy, who wasn't licensed, and Mehta had only had a license since 2012, says the suit.

Through MWM, the plaintiffs' money went into Income Opportunity Capital. They were told it would pay 8 percent year. But according to the suit, the money was diverted to Aequitas and into the deeply ailing Corinthian. According to the suit, Malloy's firm gave the plaintiffs false information.

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William M. Malloy III, who says his fortune goes back to the early 1800s, has been sued in federal court for his alleged role in a Ponzi scheme that is rocking the state of Oregon. In March of last year, the Securities and Exchange Commission filed suit against Aequitas, a Portland firm allegedly running a scheme that bilked 1500 investors of $300 million.

Malloy, from a 2012 San Diego Metro feature story called "40 under 40."

Aequitas told clients that their money would be placed in safe healthcare investments. However, that was not true. Aequitas was actually putting money into student debt related to Corinthian Colleges, one of the most scandalous for-profit institutions that was hit with federal and state charges and ultimately collapsed.

Sponsored
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Malloy's company, La Jolla-based MWM, sold Aequitas-related investments to Thomas Neal Sterchi Jr. and Kristine Sterchi, who together lost $300,000. MWM and Mehta are being sued, along with Malloy, in a suit moved to federal court from state court May 30.

According to the suit, Malloy and Mehta solicited Sterchi to invest his money through MWM. "Sterchi was extremely hesitant," according to the suit, because he had recently been skinned by another investment advisor. Malloy and Mehta said they were investment experts, according to the suit, and MWM was a large organization. Actually, the firm only consisted of Malloy, who wasn't licensed, and Mehta had only had a license since 2012, says the suit.

Through MWM, the plaintiffs' money went into Income Opportunity Capital. They were told it would pay 8 percent year. But according to the suit, the money was diverted to Aequitas and into the deeply ailing Corinthian. According to the suit, Malloy's firm gave the plaintiffs false information.

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