Colorado Securities Commissioner Tung Chan has filed civil fraud charges against Michael Cole and Sage Income LLC of Lakewood, Colorado. The November 6, 2026, complaint accuses them of securities fraud and unlicensed activities in violation of the Colorado Securities Act.

According to the complaint, Cole allegedly raised $5.2 million from 14 investors. He did this through promissory notes in his company, Sage Income LLC. The company claimed to use its own artificial intelligence (AI) software to trade securities. It said the trades would earn higher than average market returns of between 9 percent and 15 percent a year.

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The complaint alleges that Sage actually lost money from November 2019 through December 2024. Cole allegedly told investors the AI software had worked well in the past, but that was not true.

The complaint also alleges that Cole admitted to investigators that investor money was used to build and train the AI software through trial and error. Bank records allegedly show Cole used investor money to pay interest to earlier noteholders in a Ponzi-like scheme.

Cole is not licensed to offer or sell securities in Colorado.

"We believe that Mr. Cole used the promise of AI investing to defraud Coloradans, including his own brother, parents and colleagues," said Commissioner Chan. "We have seen a lot of the same old scams that mask themselves behind the excitement of new technology like AI. We recommend that investors slow down and research before investing and remember that if it's too good to be true, it usually is."

Anyone who has invested in Sage Income LLC, or knows someone who has, should contact the Colorado Division of Securities at Dora_SecuritiesWebsite@state.co.us or 303-894-2320. Complaints can also be filed at securities.colorado.gov/file-a-complaint.