The President and CEO of an Indiana energy drink company was arrested over the weekend on charges that he took in at least $600,000 from several investors in what the Indiana Secretary of State likened to a Ponzi scheme. Eric Nicholas Morgan, of Evansville, Indiana, was arrested by Indiana authorities and charged with fifteen counts of securities fraud. Morgan is being held on a $10,000 cash bond.
Morgan was the President and CEO of Liquid Ninja, an Indiana-based company that marketed a new energy drink to local stores and groceries. According to Indiana Secretary of State Connie Lawson, Morgan solicited funds from investors under the guise that those funds would be used to invest in Liquid Ninja. For example, one elderly couple was approached by Morgan, who served as their financial advisor (despite not being registered as such), beginning in late 2012 about Liquid Ninja. In April 2014, the couple invested $250,000 with Morgan and received a promissory note in return that promised an annual 7.5% return for two years. At the end of the two years, the couple was told they could either redeem their principal investment or receive a 15% ownership interest in the company. Secretary of State Lawson alleged that neither Lawson nor the product he was selling were licensed in Indiana.
Instead of using investor funds for the Liquid Ninja business, Lawson alleges that Morgan used the funds for his own personal use. According to authorities, nearly $150,000 was withdrawn from Liquid Ninja's bank account seven days after the elderly couple's $250,000 investment and used to obtain a cashier's check made payable to an unrelated individual. In December 2014, an Indiana newspaper reported that Liquid Energy had shut its doors. The company's website has also been taken down.