Multi-Million Dollar Investment Fraud Scheme

Why would 300 people invest $9.5 million over a five-year period in a company that sells water that is similar in color to oil? EarthWater, a Dallas (Addison) based operation had a great name, good story, and targeted elderly investors with promises of fast, high-yield returns.

Health and Wellness Product

“EarthWater manufactured and sold bottled water that it claimed was infused with special minerals mined from an 80-million-year-old deposit hidden in a secret location.”  March 2019 Indictment This “magical tonic” had a “rich black color,” and was advertised as “a miracle remedy for HIV and cancer.” Kevin Krause, Dallas Morning News, June 15, 2020. In order to paint themselves as the good guys, Earth Water executives promised to deliver 1,000 bottles of their own Texas Tea to the Dallas Police Department in 2015. Kevin Krause, DMN.


Investors were not providing money to drill oil wells. And the Department of Justice did not mention a Ponzi scheme. Instead, people were tricked into buying inexpensive stocks on the eve of a company going public through an IPO. The IPO never came and was never filed. Often the stocks were sold for 10 to 50 cents/share with a promise that the stock would be valued at $5/share at the time of the impending IPO. Despite claiming they were not taking salaries, the CEO and others were not investing in the company, but instead were personally pocketing investors’ money. March 2019 Indictment

50% Sales Commissions (Placement Fees)

How do the bad guys entice others to join the program? Nine people have been named as the team of fraudsters, including the C-Suite and sales team. They are in various stages of being charged, indicted, and pleading guilty. Although the advertised placement fees were not to exceed 10% of the shares’ purchase price, two salespeople earned 50%, and another earned 30%. That kind of money can really stack up. DOJ June 2020 Press Release

Post Arrest and Still Operating

As of June, CEO, Cengiz Jan “CJ” Comu and COO, John Mervyn Price have pled guilty to mail fraud, wire fraud, and money laundering, but it took more than their arrests to stop the financial fraud. In fact, after the arrest of Harley Barnes of Plano in May, he and another player, Beth Degroot appeared to have been emptying bank accounts to purchase a home.

They “were separately charged by a federal grand jury in the Northern District of Texas with conspiracy to commit wire fraud and bank fraud and obstruction of justice relating to the ongoing investigation into EarthWater, …” Trial is set for October. The continuing scam included opening new bank accounts, increasing Degroot’s salary, paying a bonus to Degroot, and contacting investors in hopes of continuing the scam under a new company name.  DOJ June 2020 Press Release

Despite the many different, unique, and convincing ways people have of divorcing investors from money, some themes remain constant.

  • Prior bad acts. Scam artists usually have a background of crime or other fraudulent activities. CEO, Comu had been “personally barred from selling unregistered securities as a result of actions filed by state and federal security regulators.” However, Comu claimed he was a successful “Wall Street veteran.”  March 2019 Indictment
  • Unsolicited and recurring phone calls. Aggressive phone sales tactics and emails are generally commonplace in investment fraud. People with whom investors have no relationship are often the first contact. People selling stocks on behalf of EarthWater from Florida and Oklahoma kept calling the same investors for more money and pushed the impending IPO deadline to secure immediate investments.

Contact An Experienced Investment Fraud Attorney Today

Each year it seems as if the bad actors get better at developing fraudulent investment schemes that look real. We hope all your financial investments are safe and profitable. But if you find yourself searching for an experienced investment fraud lawyer, we are here to help.

Mark Alexander
5080 Spectrum, Suite 850E
Addison, Texas 75001
Ph: 972.544.6968
Fax: 972.421.1500

Photo of Mark Alexander Mark Alexander

Mark Alexander is the principal of the Firm. In 1979, he earned his undergraduate degree at Wayne State University in Detroit, Michigan, and his law degree at Thomas M. Cooley, Lansing, Michigan, in 1985 (Academic Dean’s List).

Mr. Alexander is licensed…

Mark Alexander is the principal of the Firm. In 1979, he earned his undergraduate degree at Wayne State University in Detroit, Michigan, and his law degree at Thomas M. Cooley, Lansing, Michigan, in 1985 (Academic Dean’s List).

Mr. Alexander is licensed to practice law by the Supreme Courts of the States of Texas (1985) and Michigan (1988), and holds licenses before the following courts: Supreme Court of Texas; Supreme Court of Michigan; United States Court of Appeals for the Fifth and Sixth Circuits; United States District Courts for the Northern, Southern, and Western Districts of Texas; and the Eastern and Western Districts of Michigan. In addition he has been admitted in several other Federal and State Courts to represent Texas clients, who have been engaged in significant litigation in those jurisdictions.

Courts have appointed Mr. Alexander to serve as a receiver, and facilitator in complex litigation lawsuits. Additionally he has been a frequent lecturer for organizations on a variety of business law matters.  Mr. Alexander has also served as an Adjunct Professor of Business Law at Henry Ford College in Dearborn, Michigan. Significantly, Mr. Alexander is AV-rated by Martindale-Hubbell, the highest rating an attorney can receive.

Additionally, due to the complex nature of its practice, the Firm has an on-going relationship with a legal group that provides litigation support services. This group is comprised of a team of attorneys, whose combined capabilities allow the group to provide nearly 24-hour coverage at crucial times for any case. This arrangement is but one example of the innovative, cutting-edge approach that the Firm provides to its clients in order to improve representation at reduced legal fees.