California weed startup accused of running $60M Ponzi scheme

A California marijuana company is being accused of a Ponzi scheme, in which the owners allegedly raised more than $60 million from investors only to spend it on personal expenses including luxury cars, jewelry and adult entertainment, federal investigators said.

The company, Integrated National Resources Inc., which operates under the name WeedGenics, was shut down by the U.S. Securities and Exchange Commission after its owners promised investors they’d used funds for cannabis facilities that didn’t exist,according to a complaint filed on May 16 by the SEC.

Rolf Max Hirschmann and Patrick Earl Williams, the company owners, lied about the existence of cannabis facilities in Adelanto, California, and Las Vegas, the complaint said. Since at least June 2019, Hirschmann and Williams told 350 investors they would use their funds to expand WeedGenics facilities, “which they guaranteed would produce up to 36 percent returns,” the SEC alleged.

After receiving the funds, Hirschmann and Williams allegedly transferred the money through multiple accounts, and Hirschmann used a fake name, Max Bergmann, when communicating with investors. Williams, who is listed on the company website as the vice president, reportedly worked “behind the scenes” and spent investor funds on his rap career under the name BigRigBaby.

WeedGenics and the company owners did not respond to SFGATE’s request for comment.

“Rolf Hirschmann and Patrick Williams allegedly had no real company, no product, and no business, yet despite this, they promised investors everything and then delivered nothing,” said Michele Wein Layne, director of the SEC’s Los Angeles office, in the agency’s news release. “This action demonstrates that, despite the defendants’ extensive efforts to avoid detection, the SEC has the ability to uncover fraud to protect investors.”

The SEC requested emergency measures against the company, its owners and several defendants, including a temporary restraining order, an order freezing their assets and the appointment of a temporary receiver over Integrated National Resources Inc.

The U.S. District Court in the Central District of California scheduled a hearing for the case on June 2.

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