Texas Investor Alleges Massive Fraud Scheme at Alkaline Water Startup

The royalty statements sent to Stephen McCord appeared unremarkable at first glance—a collection of documents detailing the performance of his investment in Plus Brand Industries Inc. But when McCord began looking deeper into the electronic files, he discovered something far more sinister than mere poor performance. According to a federal lawsuit filed on October 29 in the U.S. District Court for the District of Wyoming, the alkaline water startup allegedly employed a deceptive tactic to conceal the true nature of its financial health: hiding crucial sales data in plain sight by using white text against a white background.

The lawsuit, which seeks to recover at least $3 million in losses, paints a picture of a company that allegedly functioned more as a vehicle for deception than a viable beverage enterprise. McCord, a Texas-based investor, alleges that between October 2023 and June 2025, he was systematically misled by the company’s leadership, enticed by promises of "absolutely no risk" and astronomical returns that allegedly never materialized.

A Pattern of Alleged Deception

According to the complaint, McCord’s involvement with Plus Brand Industries was extensive. Over the course of nearly two years, he purchased multiple royalty investment units at a price of $25,000 each, invested in a promissory note promising a 22 percent annual interest rate, and acquired millions of shares of preferred stock. Despite these significant outlays, the filing claims that McCord has seen a return of only $90,000.

The promises made to McCord were, according to the lawsuit, grandiose and detached from reality. The company’s founder and CEO allegedly told the investor that his capital would "make 100X in the next six months." Furthermore, the CEO reportedly claimed that the company was in the midst of "multiple patent valuations" that were expected to push the company’s worth past the billion-dollar mark.

However, the reality of the company’s internal reporting, as described in the lawsuit, was far less glamorous. McCord received five monthly statements throughout 2024. Each document contained a column explicitly labeled "GROSS SALES," yet on the printed face of these documents, the column remained conspicuously blank. Instead, the statements utilized the phrase "baseline monthly return" to describe payments made to the investor—a term that, according to the legal filing, does not exist anywhere within the actual royalty agreements signed by the parties.

The deception, the complaint alleges, was buried in the digital source files. When McCord examined the electronic versions of these statements, he discovered that the "GROSS SALES" column was not empty at all. Each cell contained a numerical figure, but it had been formatted in white text. When viewed on a standard computer screen against a white background, the numbers were invisible. Upon closer inspection, McCord realized that these hidden figures were not representative of product revenue, as the label suggested. Instead, they represented the total amount of capital the company had raised from investors that month—calculated by multiplying the number of royalty units sold by the $25,000 unit price. The lawsuit alleges that Plus Brand was essentially masking its reliance on new investor capital by masquerading it as operational revenue, using that money to pay out "royalties" to earlier investors in a manner reminiscent of a Ponzi scheme.

The Celebrity Connection and Regulatory Red Flags

The lawsuit also highlights an elaborate effort by the company to bolster its credibility through association with high-profile figures. In March 2025, McCord received an email from Plus Brand containing a press release announcing that legendary boxer Floyd Mayweather Jr. had completed a "$30 million" equity investment in the firm. The company touted the deal as the "first time that Plus Brand has taken in meaningful outside capital."

The reality, according to the complaint, was significantly different. The underlying agreement was not a cash investment, but rather a non-binding term sheet for promotional services. The company’s Chief Operating Officer eventually admitted to McCord that the cash investment "has not yet been completed." By October 2026, the situation had deteriorated to the point that the founder allegedly conceded in writing that no such multi-million dollar investment had ever occurred and that the company had generated zero revenue since its last update to shareholders.

Beyond the misrepresentation of investments, the lawsuit alleges fundamental failures in the company’s corporate governance. Despite McCord holding four signed preferred stock agreements, the company’s own capitalization table—the document provided to a valuation firm in 2025—contained no mention of preferred stock and did not list McCord as an equity holder.

The circumstances surrounding McCord’s introduction to the company are also under scrutiny. The lawsuit alleges that the individual who facilitated the investment was not registered to sell securities in Texas and was currently barred by the Financial Industry Regulatory Authority (FINRA). Furthermore, the complaint claims that the company’s founder admitted to paying this individual approximately $1 million over three years to act as a finder for the firm. This payment was allegedly never disclosed to the Securities and Exchange Commission (SEC); in an amended Form D filing in May 2024, the company reported zero sales compensation or finders’ fees.

Perhaps most damaging to the credibility of the company’s leadership are the allegations regarding the founder’s past. The lawsuit asserts that the founder was convicted of a felony in Michigan in 2005. According to the filing, the state’s financial regulator at the time determined that the conviction "involved fraud, dishonesty, or breach of trust," leading to an order that barred the founder from participating in certain roles within the financial industry. The complaint alleges that none of this history was ever disclosed to McCord, depriving him of critical information regarding the character and background of the person to whom he was entrusting his capital.

Legal Recourse and Pending Claims

The federal lawsuit brings a total of 12 counts against Plus Brand Industries, including allegations of federal securities violations under the Exchange Act, violations of Texas securities laws, common law fraud, breach of contract, and breach of fiduciary duty.

McCord is seeking a comprehensive legal remedy, requesting that the court allow him to unwind his purchases entirely or, alternatively, award him damages of no less than $2,910,000. He is also seeking the full payment of the promissory note with the stipulated 22 percent annual interest, a formal court declaration confirming his ownership of the shares he believes he purchased, a complete financial accounting of the company, and the reimbursement of his attorney’s fees.

As the litigation proceeds, the allegations remain, for now, claims made in a civil complaint. The facts have yet to be tested in a court of law, and no judicial findings or rulings have been issued to substantiate the claims. The case stands as a stark warning about the risks associated with private equity investments in small startups, particularly when financial disclosures are opaque, and the transparency required by law is allegedly traded for complex, hidden maneuvers. For Stephen McCord, the pursuit of justice will now move to the federal courts, where he hopes to hold the company accountable for what he describes as a calculated and multi-layered fraud.