Two men, Joseph James and Michael Bronner were indicted for their involvement in a public company focused on hemp-derived CBD products. The two allegedly used unlawful means to gain control of the company’s assets after falsely claiming they had discovered a new type of hemp seed that could be processed into cannabidiol oil, according to the indictment.
The “Two men indicted for fraud linked to public hemp CBD company” is a recent article that discusses the indictment of two men on charges of fraud related to their involvement in a public hemp CBD company. The article also features an image of a marijuana plant. Read more in detail here: hemp stock.
According to a federal grand jury indictment recently delivered by a federal grand jury in New York, a hemp CBD firm listed on both the Canadian and Frankfurt stock markets was used as a vehicle for securities and wire fraud.
New Jersey residents Vitaly Fargesen and Igor Palatnik are accused of collecting cash based on fraudulent and deceptive promises made by their firm, CanaFarma. According to a now-unsealed indictment handed down by a grand jury in the Southern District of New York, the two are also accused of failing to invest requested cash as promised and manipulating the company’s public stock price.
The men allegedly generated more than $14 million, including investments in private CanaFarma shares, and utilized at least $4 million of that money for their own personal gain and to advance the alleged fraud, according to the indictment.
CanaFarma began by selling Yooforic, a hemp-infused chewing gum, and then expanded to include hemp-based medicines and skin treatments. According to the indictment, the corporation advertised itself as a “fully integrated cannabis enterprise handling the complete cannabis spectrum from seed to delivery of consumer product,” yet all of the items were obtained from third-party suppliers.
Prosecutors claim the firm gathered 128,000 pounds of hemp in 2019 via a New York hemp farmer, but did not process, sell, or utilize any of it in any product. Despite assurances to investors that the business plan featured a “Fully Certified Clean Processing Facility,” the firm never constructed a hemp processing facility.
Fargesen and Palatnik, as well as two unnamed co-conspirators, are accused of carrying out intricate financial transactions and filing false financial reports to hide their tracks. Many of the accusations in the indictment hinge on the co-conspirators’ cooperation; both defendants face counts of conspiracy to conduct securities and wire fraud, both of which carry lengthy prison terms.
“We were quite disappointed to see charges filed here after complying with the government’s numerous information requests over the last year or so,” Fargesen’s attorney, Jeffrey Lichtman, stated in an email.
“As will be proven at trial,” he said, “the government’s prosecution is almost entirely based on two renegade workers who looted the firm before fleeing into the arms of the authorities and confessing their own fraud.”
A request for comment from Palatnik’s counsel was not returned.
“Just as a lesson to anybody who believes they can manipulate people’s investments in this way—just that’s not the case,” FBI Assistant Director-in-Charge Michael J. Driscoll is quoted as saying in a news statement announcing the indictment and arrests of the CanaFarma leaders.
Recent public transactions
CanaFarma announced last month that it will undertake an acquisition in the dietary supplement and functional foods industry, agreeing to buy Avitas Bio Corp., a branded health and wellness firm with unique nutraceuticals and healthy snacks. VitaWin Healthy Snacks is a brand of luxury chocolate candies, confectionary, and other food items infused with CBD developed by Avitas Bio.
In June, high-profile health and wellness business Vertical Wellness decided to combine with CanaFarma, forming a corporation led by Vertical Wellness CEO J. Smoke Wallin, who was funded by former Sports Illustrated swimsuit model-turned-entrepreneur Kathy Ireland. Because of CanaFarma’s status on the Canadian Securities Exchange, the acquisition was billed as creating Vertical Wellness “the first house of CBD brands to go public.”
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