TikToker Teddy Miller built a social media following on the syndicators’ sales-pitch: invest in value-add multifamily and reap outsize returns.
As Miller put it, “Our business is rebuilding shitholes because that is our focus and our focus is on making money; if it wasn’t, we wouldn’t be in business very long.”
The syndicator’s business imploded last month.
Miller, a West Virginian, was indicted on 12 counts of wire fraud, one of money laundering and two of obstruction, according to the U.S. Attorney’s office for the Southern District of West Virginia. He also faces a lawsuit by the Securities and Exchange Commission for alleged securities fraud.
The SEC declined to comment beyond its public filings. Miller’s attorney did not respond to a request for comment.
Miller’s TikToks are rife with red flags. He guarantees returns, outright rejects SEC regulations and calls his investment program Bear-Lute “100 percent legal.” And yet, he managed to lose the money of 170 investors, folks he roped in through a combination of “no-B.S,” anti-establishment “life lessons” and guaranteed returns.
The $370,000 he raised — most of which he spent on himself —is small potatoes compared to what other players in the space have gathered. But his scheme, which dragged on for nearly two years, speaks to how little oversight regulators afford smaller operators.
It brings into question whether the law that spawned online fundraising has also invited fraud.
In soliciting investors via TikTok, Miller should have been operating under Regulation D 506(c). The securities rule, passed in 2012, allows firms to raise capital online from accredited investors, or those making more than $200,000 a year.
“Not only did Miller fail to inquire whether investors were accredited, he also bragged about his willingness to accept anyone as an investor,” the SEC’s suit reads. Miller also failed to submit the form associated with the regulation.
Instead, the influencer focused on his brand. Dressed in designer tees and flashy shades, he harnessed TikTok to paint himself as a philanthropic millionaire scooping up distressed properties, hiring homeless people to renovate them and generating returns of more than 20 percent.
A dirty mouth and hustler attitude add dimension.
“You can’t make money if you are a f*cking p*ssy,” is a catchphrase of his, the SEC notes.
It’s unclear who comprises the 100,000 followers Miller boasts on TikTok (the influencer’s Instagram and Youtube accounts have been deactivated). But the comments section shows that many took his promises and persona at face value.
“Thank you, for being a decent human being!!” writes one follower on a February post.
“I think I just might have to start putting some cash into this. Maybe a couple thousand a month,” a comment on another reads.
“I just invested with you 🤗 can’t wait to see how everything works,” writes a new investor.
Many commenters are out of work, others are looking to switch careers and it’s not hard to imagine how Miller’s occasional TikToks showing his tropical vacations would whet their appetite to invest.
The 170 people who sank money into Bear-Lute never received disbursements, according to the SEC. For retail investors, “a couple thousand a month” in losses could be a serious financial blow.
Those allegedly defrauded by Miller could get some money back; the SEC is seeking disgorgement of ill-gotten gains among other requests for relief, according to its suit.
The syndicator is facing a maximum prison sentence of 290 years for his various criminal charges.
As Miller awaits sentencing, TikTok is playing judge and jury.
Three days before his Aug. 6 arrest, Miller posted one of his “life lessons” on TikTok, captioned, “Don’t be a vacation…be a partner.” The video devolved into a misogynistic rant.
The comments are ruthless: “Next vacation is Federal Prison lol.”
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