HENDERSON, Iowa (KMTV — A Henderson, Iowa man is taking his bank to small claims court after losing money in an international investment scam in which his bank was defrauded.
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John Scherle invested more than $6,000 through TS Prosperity, the investment arm of Treynor-based TS Bank, which was among more than 100 victims of a scheme federal prosecutors described as "Ponzi-like."
"I got a phone call, and they said 'We, we lost your money.' And I said, 'Oh, well the market goes up and down and, you know, things happen.' You know, I guess. And they said, 'No. WE LOST YOUR MONEY,'" Scherle said.
The retired widower and local musician said he had instructed the bank to invest his money conservatively.
"I thought the money was going to go in like, IBM or Tesla or the stock market, but apparently they put the money in a very risky foreign exchange scam in the Bahamas," Scherle said.
The investment firm Mediatrix, run by Michael Stewart and Bryant Sewall, misled investors by providing false information about the company's operations, profits, and history. Court records show Mediatrix claimed to have earned a 1,600% return for investors since its founding and never had an unprofitable month; results that would raise red flags among investment advisors.
"And it was a scam, and it scammed several dozen people — hundreds of people — from across the country. And Treynor Bank was one of them," Scherle said.
TS Prosperity confirmed by email that it was among those scammed by Mediatrix.
"TS Prosperity Group can confirm, that in 2019 it was one of the over 100 victims of Mediatrix's crimes that impacted individuals and companies throughout the U.S.," the bank stated, in part.
Scherle believes the bank should reimburse his losses.
"You lost it. You get it back. Pay me back," Scherle said.
In his small claims court filing, Scherle argues that TS Prosperity didn't follow his instructions to avoid high-risk investments. The bank has asked the Pottawattamie County Small Claims Court to "stay" Scherle's claim, noting that "Plaintiff was aware his investments are not FDIC insured, may lose value, are not guaranteed, not a deposit and not insured."
The bank's attorney also pointed out that TS Prosperity is considered a victim in the case.
Scherle disagrees with that characterization.
"Well, they're not victims. They didn't do their due diligence. And they just plain invested our money in a very risky, unsafe – not conservative as we directed them to do," he said.
The judge issued a stay, meaning Scherle's case won't proceed until litigation against Mediatrix is concluded.
Sewall and Stewart were convicted in 2024. Sewall was sentenced to 23 years in prison, while Stewart hasn't been sentenced yet. A third partner received a one-year prison sentence.
According to court documents, Bryant Sewall was ordered to pay $93 million in restitution. TS Prosperity was third on the list at $6.6 million. The SEC says more than $125 million was put at risk in the scheme.
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STATEMENT FROM TS BANK SPOKESPERSON
“TS Prosperity Group can confirm, that in 2019 it was one of the over 100 victims of Mediatrix’s crimes that impacted individuals and companies throughout the U.S. With the involvement of the Department of Justice and Securities and Exchange Commission, the federal prosecution of Mediatrix has been ongoing for six years in Colorado federal court. The legal proceedings against Mediatrix are still pending, so we would need to refer you to the Department of Justice and the Securities and Exchange Commission for additional information regarding this case.”
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