The Securities and Exchange Commission said Thursday it is charging a cannabis cultivation and distribution company, its CEO and others with engaging in a long-running scheme that raised more than $30 million from more than 100 investors around the country and fleeced millions these means to enrich themselves.
The complaint, Securities and Exchange Commission v. American Patriot Brands Inc., et al., filed in US District Court in San Juan, Puerto Rico, said Newport Beach, Calif.-based American Brands Inc. produced only a small amount of salable cannabis a year, yet marketed itself as one of the largest cannabis growers in the country and provided “wildly inflated financial information to support extremely high earnings.”;
It said APB officials siphoned off millions in investor funds to a company partly owned by CEO Robert Y. Lee and another company, and also used investment proceeds to enrich themselves.
The complaint says APB is still actively marketing securities to potential investors “using the same false and misleading claims.”
The SEC charges the defendants with violations of federal securities laws and unjust enrichment.
The company could not be reached for comment.