The two co-founders of CanaFarma Hemp Products have been billed with fraudulently increasing $15 million from investors by producing phony statements about the “farm to table” hemp startup and its management.
The U.S. Securities and Exchange Fee claimed Vitaly Fargesen and Igor Palatnik misrepresented CanaFarma as a “fully integrated” hemp company and inflated its earnings in elements for two personal offerings of shares even though pocketing $four million of the trader funds for their personalized use and functions unrelated to CanaFarma.
They also touted the high quality of CanaFarma’s management group, which was purportedly led by CEO David Lonsdale when, in actuality, he “was CEO in title only, producing no substantive choices and getting path from Fargesen and Palatnik,” the SEC claimed in a civil complaint.
Fargesen and Palatnik have also been indicted on connected felony fraud rates.
“Fargesen and Palatnik had been just employing the trappings of a startup to run an aged-time rip-off: lying to investors to take money for themselves,” Manhattan U.S. Lawyer Audrey Strauss claimed in a news launch.
According to the SEC, CanaFarma’s mentioned business prepare was grow hemp at two farms in New York and procedure it into hemp goods these types of as “Yooforic” chewing gum that it would market place straight to shoppers. Lonsdale, the president of boutique finance business Lonsdale Team, was hired in March 2019.
Fargesen and Palatnik, who had been vice presidents of the company on paper, “told [Lonsdale] and others at CanaFarma that [he] would act as a mere figurehead CEO and would not make any real choices,” the SEC claimed.
CanaFarma, having said that, allegedly did not manufacture Yooforic alone, licensing output to a 3rd celebration and leaving the hemp it grew in storage, unused. “Fargesen told an specific … that CanaFarma was producing payments to the very first hemp farm ‘just for the story,’” in accordance to the SEC.
For its next giving, the company claimed that in March 2020, it was “achieving nearly $1,000,000 for each thirty day period revenue” but achieved “only around $44,000 in earnings in March 2020” and “never achieved $1 million in monthly revenue” even though it was conducting the fund raises.
Tafadzwa Ufumeli by using Getty Visuals