A Chicago-area investment adviser allegedly funneled his own father-in-law’s retirement accounts into a pooled fund, used the inflated asset base to attract outside investors, and then lost more than $3.6 million through trading failures and personal spending, according to parallel federal enforcement actions filed this month. John Myers, who operated through Sterling Capital, LLC, and its investment arm Sterling Capital Investments, LLC, raised approximately $4 million from roughly 28 investors between January 2022 and at least July 2025. Both the Securities and Exchange Commission and the U.S. Attorney’s Office for the Northern District of Illinois have now moved against him, with a federal indictment filed on June 4, 2026.
How family retirement money bought Myers extra time
The core of this case is not just the size of the loss but the sequence that made it possible. By channeling a close relative’s retirement savings into Sterling Capital Investments early on, Myers appears to have built an initial capital base that looked legitimate to prospective investors. Family money, unlike capital from arm’s-length participants, rarely comes with the same due-diligence demands or redemption pressure. That cushion likely gave Myers room to absorb early trading shortfalls without triggering the kind of withdrawal requests that would have exposed the fund’s real performance.
The SEC’s complaint states that over $3.6 million of the approximately $4 million raised is now gone, consumed by trading losses and personal use. The gap between what investors believed they held and what actually remained widened over more than three years, a timeline that suggests the fund’s reported returns bore little resemblance to reality for an extended stretch. False account statements overstating portfolio values kept investors from acting on the true state of their money.
Those allegedly fabricated statements did more than just calm nerves. Consistently positive or stable numbers can create a powerful social proof effect, especially when early investors are family members. If the father-in-law’s account appeared to be growing, prospective clients might reasonably conclude that Myers’ strategy was working. That perception, in turn, would have made it easier to bring in additional retirement rollovers and taxable brokerage accounts, deepening the pool of capital at risk.
Parallel SEC and DOJ charges against Sterling Capital
The federal indictment, filed as United States v. John Myers (Case No. 1:26-cr-00278), covers an alleged scheme running from October 2022 through November 2025. According to the U.S. Attorney’s summary, Myers solicited funds from victims through Sterling Capital Investments, created false documentation including fabricated account statements, and used incoming investor money to repay earlier participants. That last detail is the hallmark of a Ponzi-like operation: new cash masks old losses until the inflow stops.
The SEC’s civil action and the DOJ’s criminal case overlap in their core allegations but differ slightly in their stated timeframes. The SEC places the conduct as beginning in January 2022, while the indictment narrows the start to October 2022. Both agencies agree the scheme persisted into at least mid-to-late 2025. The criminal case carries the possibility of prison time, while the SEC action seeks injunctive relief, disgorgement of ill-gotten gains, and civil penalties aimed at compensating victims and deterring similar conduct.
Corporate registration records confirm Sterling Capital, LLC, as a formally registered legal entity. The fund was not an informal arrangement; it carried the structural trappings of a legitimate investment vehicle, which made it easier for Myers to present it as a credible destination for retirement savings and other long-term capital. The indictment’s charging document details how that structure allegedly helped Myers open custodial accounts, move client assets, and issue statements that appeared professional even as losses mounted.
Open questions for Myers’ remaining investors
Several important details are absent from the public filings so far. Neither the indictment nor the SEC complaint spells out how much of the roughly $400,000 not yet characterized as lost might still be recoverable, or how much sits in traceable accounts versus being dissipated through trading and spending. It is also unclear whether any third-party custodians or service providers raised concerns about inconsistent instructions, unusual withdrawals, or mismatched account balances.
For remaining investors, the parallel nature of the cases creates both opportunity and uncertainty. Restitution can be ordered in the criminal case, but any recovery will depend on what assets prosecutors can locate and freeze. The SEC’s push for disgorgement and civil penalties may result in a separate pool of funds, yet those amounts often overlap with criminal restitution and can be diluted by administrative costs. Investors will want to track both dockets closely to understand where they stand in the priority line.
There are also open questions about the role of family relationships in the resolution of the case. If the father-in-law’s retirement money was among the earliest funds committed, courts may have to decide whether those insider contributions should be treated differently from later outside investments. In other Ponzi-style collapses, early participants who withdrew money have sometimes been sued by receivers to claw back “fictitious profits” for redistribution. Here, where the family member appears to have suffered losses rather than gains, the analysis could be more straightforward but still emotionally fraught.
Finally, the Myers case underscores a recurring lesson for retail investors: legal entities, polished statements, and family endorsements are weak substitutes for independent verification. Third-party custodians, direct online access to accounts, and regular, reconciled statements from established brokers are basic safeguards. When an adviser both holds the money and reports the performance, the risk of undisclosed losses or misappropriation rises sharply. As regulators move forward, the outcome of these actions will signal how aggressively authorities intend to police that boundary in the years ahead.
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Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
