SEC Charges Florida Man As Part Of $60 Million Investment Fraud Case
On May 23rd, 2023, the Securities and Exchange Commission (SEC) officially announced the shutdown of a company called “WeedGenics”—a $60 million cannabis-related securities offering. Securities fraud charges have been filed against the company—and its owners Rolf Max Hirschmann and Patrick Earl Williams—for allegations of a “Ponzi-like” investment fraud scheme. In this post, our Miami securities fraud attorney provides an in-depth overview of the charges filed in this case.
SEC Charges: More Than $60 Million Raised From Investors as Part of “Ponzi-Like” Scheme
The SEC filed a complaint in the United States District Court for the Central District of California. It cites a company called Integrated National Resources Inc. (WeedGenics) and its owners Rolf Max Hirschmann of Eagle, Idaho and Patrick Earl Williams of St. Petersburg, Florida. According to the allegations raised by the federal agency, Mr. Hirschmann and Mr. Williams conned investors with promises of expanding their non-existent cannabis facilities and providing high returns.
The funds that were raised from investors (more than $60 million) were misappropriated. Using a Ponzi-like system, the SEC contends that Mr. Hirschmann and Mr. Williams moved money around to keep the scheme afloat, while siphoning off more than $16 million in investor funds. The SEC emphasizes that Integrated National Resources Inc. had no real company, product, or business operations.
The SEC Named More than a Dozen Relief Defendants
As part of the securities fraud complaint, the SEC also named more than a dozen relief defendants, including both business entities and individuals. A relief defendant is a person or entity who has received ill-gotten gains as a result of others’ illegal activity, but is not accused of wrongdoing themselves. The relief defendant holds the funds “in relief” for the actual defendants. The aim of naming them in a lawsuit is to recover those funds and return them to the defrauded parties.
Ponzi Scheme Victims Have the Right to Take Action to Seek Financial Relief
Broadly defined, a Ponzi scheme is a type of investment fraud whereby the perpetrators generate “returns” for the original and early investors through revenue paid by new investors. There may be little to no legitimate business activities. Essentially, they promise high returns with little risk, but these schemes are destined to collapse when there are insufficient new investors to pay out the earlier ones. Unfortunately, victims of Ponzi schemes may be left with significant financial losses. If you have been a victim of a Ponzi scheme, seeking legal counsel is crucial. An investment fraud lawyer can help guide you through the complex process of recovery, ensuring your rights are protected and your best interests are respected.
Schedule a Completely Confidential Case Review With an SEC Losses Attorney
At Carlson & Associates, P.A., our Miami securities fraud attorneys are committed to helping investors get justice and full and fair compensation for their losses. If you or a family member sustained significant financial harm as a consequence of investment fraud, we are prepared to help. Contact our Miami law firm today to arrange your confidential initial case evaluation.
Source:
sec.gov/news/press-release/2023-97