Home>702Times>SEC Halts Alleged Offering Fraud and Ponzi Scheme by Cannabis Company Operating in Las Vegas

SEC Halts Alleged Offering Fraud and Ponzi Scheme by Cannabis Company Operating in Las Vegas

By TheNevadaGlobeStaff, May 25, 2023 8:10 pm

LAS VEGAS – The Securities and Exchange Commission (SEC) has obtained an emergency order to halt an alleged ongoing offering fraud and Ponzi-like scheme by a cannabis company claiming to have a growing facility in Las Vegas.

In a release, the SEC stated that National Resources Inc., doing business as WeedGenics, and its owners, Rolf Max Hirschmann and Patrick Earl Williams, raised over $60 million from investors under the guise of expanding their cannabis operations. However, the SEC alleges that the majority of the funds were used for Ponzi-like payments totaling $16.2 million and personal enrichment.

WeedGenics’ website asserts ownership of a 52,000 square foot cultivation facility in Nevada and a 150,000 square foot expansion facility in Adelanto, California. However, the SEC asserts that these facilities do not exist.

According to the complaint filed in court, Hirschmann and Williams have been making false promises to investors since at least June 2019, guaranteeing substantial returns and expansion of WeedGenics facilities. In reality, the defendants did not own or operate any facilities. Instead, they diverted investors’ funds to enrich others and for personal use, including entertainment, jewelry, luxury cars, and real estate.

To evade detection, Hirschmann, operating as the face of the company, used the alias “Max Bergmann” when communicating with investors. Meanwhile, Williams, the company’s Vice President, operated behind the scenes while utilizing investor funds for his career as a rap musician known as “BigRigBaby.”

The court has granted the SEC emergency relief against INR, Hirschmann, Williams, and several relief defendants, including a temporary restraining order, freezing of assets, and appointment of a temporary receiver. A hearing is scheduled for June 2 to determine whether to issue a preliminary injunction and appoint a permanent receiver.

The SEC’s complaint charges the defendants with violating securities laws’ antifraud provisions. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and officer and director bars. Disgorgement with prejudgment interest is also sought from the named relief defendants.

Credits: Fox 5 Vegas

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