Chicago area businessman, partner accused of defrauding investors out of millions
CHICAGO (CBS) — Some clients of a Chicago area businessman and his partner thought they were investing their savings in a clean energy hydrogen plant. But that plant never even existed – and the clients now say the pair stole millions from them. They have filed a class-action lawsuit in Cook County Circuit Court.
Businessman Paul Croft and his partner, J.D. Frost, took self-promotion to a new level on social media with a podcast, TikToks, and a YouTube show called "The Rhino Zone."
"You see things on social media that, you know, they are doing it with Lamborghinis and gold chains and all that stuff," said Sid Larson. "I'm like, unfortunately, that, for me, looked good enough."
Larson, a client of Croft & Frost, said their social media made them seem legit, so he agreed to invest $85,000 in their scheme.
Financial records show Croft and Frost raised about $30 million for a hydrogen plant that was supposed to be, at one point, in Indiana.
"The problem is that it never was anything," said attorney Alex Loftus of the firm Loftus & Eisenberg Ltd. "They spent about $200,000 on architects, and that's about it."
Loftus said the hydrogen plant never existed. Loftus has spoken to about 100 clients who say they were defrauded in that scheme and a real estate scheme, taking $50 million in all.
"Of which about $46 million went into their own pockets," Loftus said. "Instead, the money went to pay off their creditors and buy Ferraris."
Loftus said the money paid for Croft's incredible car collection and Frost's $27,000-per-month American Express bill.
Then, according to the lawsuit, Croft & Frost's accounting firm shut down with no notice in September, right before a filing deadline, leaving dozens of employees with unpaid wages and leaving clients in the lurch. Croft and Frost went silent after that, and have not responded to multiple requests for comment for this story.
"They're complete frauds," Larson said. "What they did is wrong and they knew it was wrong."
Larson said he was gutted when he found out his investment was not being invested.
"Let it stop here," said Larson. "I want Paul and J.D. ... like, I want them to pay for it."
Larson and other victims taking part in the class-action lawsuit against the pair are speaking out in hope that Croft & Frost won't be able to continue defrauding clients.
"They lied about what they were selling. It's a false promise," Loftus said. "When something's such a mess, we need government help to come in and help clean up the mess."
On Friday morning, a Cook County judge also entered a judgment for $500,000 against Frost in a related case. The plaintiffs hope federal investigators might also take a look.
