A South Carolina man is facing civil charges after allegedly running a $20 million Ponzi scheme to fund his lavish lifestyle—and scoop up a million dollars worth of TikTok coin.
Michael French, 40, and two of his companies were charged on Tuesday by the Securities and Exchange Commission, which accused him of defrauding over 400 investors to whom he’d sold millions of high-yield promissory notes. The complaint states that during the two-year scam, which ended around September 2022, French “misappropriated at least $13.2 million of investor proceeds to make Ponzi payments to earlier investors and to pay for his personal expenses.”
Among those personal expenses were luxury cars, homes for both him and his parents, a personal performance coach, a trainer, a chef, and over $1 million in payments to TikTok for “coins” to give to social media creators.
It was not immediately clear if French has retained a lawyer.
The charges come one month after French was arrested in Florida for allegedly stalking and tampering with a witness that had information about his alleged fraud scheme. A Fort Myers police report obtained by The Daily Beast states that the witness was a woman French met through TikTok and started sending $1,000 a day as one of her biggest supporters.
At one point, he claimed he was going to “kill himself” if she did not answer him and began telling others they were in a romantic relationship, police said. Eventually, French was arrested outside of her house on Feb. 28, at which point authorities learned that he had been claiming he was “a sniper” and was consistently messaging her through various phone numbers.
Officers found a 9mm firearm in his rental car and several notes written in Sharpie, including one that read “STOP HELPING THEM,” the report says.
The SEC complaint details French’s downward spiral, from a wannabe businessman to an alleged scam artist. It notes that despite French’s lack of formal financial training or experience working with a financial firm, he still tried to craft a “financial-guru persona on TikTok.” As of Wednesday afternoon, French’s TikTok profile had zero videos and about 300 followers.
By April 2020, the SEC states, French began using two of his lending companies to sell high-yield promissory notes nationwide, assuring investors the notes were “a safe investment because he had industry experience, including underwriting the loans in which investor funds would be invested.”
French allegedly told investors that the notes promised 12 percent returns after just one year and were backed by a low-risk investment program.
“French also told prospective investors that neither he nor his entities would receive any payment unless and until investors had received their promised returns,” the complaint filed in
United States District Court for the Northern District of Georgia states. “In reality, the investment was a sham.”
The complaint states that the investment funds were pooled into one of French’s holding company’s bank accounts—which were controlled and owned by him.
French and his lending company “engaged in a multi-year course of conduct designed to deceive investors and to use the investment proceeds in an undisclosed manner,” the complaint states. In addition to the sham lending program, investigators detail how French misappropriated the funds for his own personal enrichment.
Over the course of two years, French allegedly purchased six homes with approximately $1.5 million of his investor’s funds. He also spent over $650,000 on several luxury and classic cars, including a 1969 Chevrolet Chevelle and a 1965 Lincoln Continental.
Some of the money was also used to buy TikTok “coins,” which are given to creators on the social media app to support them.
Ultimately, the complaint states, French’s lending company began defaulting on its interest and principal obligations under the notes—spurring him to tell investors “a variety of lies in an attempt to placate them.” By the fall of 2022, French allegedly cut off all communication with his investors, selling most of his cars, and putting his homes on the market.
In February 2023, he was arrested for allegedly stalking the TikTok creator in Florida. The police report notes that the social media influencer and French spoke on a professional basis for months after he began sending her thousands of dollars in “coin” starting in August 2022.
A former management trainer, the creator told police that French told her he wanted “help to become a better manager in his business and wanted” training. During those conversations, the police report states, French told her his employees did not listen to him—a fact that seemed weird to her because he spoke about being successful.
On Jan. 22, 2023, the woman said that while on TikTok Live, French contacted her “and stated that if she does not contact him then he will kill himself.” She told police that she ended her Live and contacted him. Days later, she said that another creator told her that French “was telling people that he was in a romantic relationship” with her—which he denied.
The police report states that she eventually learned French “was under investigation for stealing millions of dollars from investors” and blocked him immediately. That prompted French to allegedly contact her on various phone numbers—and eventually track her down in Fort Myers, where she had moved four months prior. In February, she said she called the police when she saw him outside her window in a blue shirt with an object in his hand, the police report states.
“The forgery charge relates to French’s alleged forgery of FBI documents. Included in the forged documents is a document falsely stating that several entities, including the Commission, have released French from investigation,” the SEC complaint notes.
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