Former owner of Canada-based jar company accused of defrauding investors over $ 1 million

Embezzled funds used for his own personal use and that of his family, as well as to “make Ponzi-type payments to lull previous investors to sleep.”

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Geoffrey Thompson, former owner and operator of an unidentified Canada-based cannabis company that did business in Colorado, has been charged with defrauding investors over US $ 950,000 ($ 1.2 million) .

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The 53-year-old Florida man, formerly of Frankfort, Ill., Is due to be arraigned later this week after being charged with one count of wire fraud in connection with the scheme, a statement from the Office of the United States Attorney, Northern District of Illinois. Electronic fraud carries a penalty of up to 20 years in federal prison.

According to criminal information filed late last week in US District Court in Chicago, the man solicited and obtained money from investors in 2018 and 2019. He allegedly falsely stated that “the funds would be used. to develop the activities of the company and holding an initial public offering (IPO) of securities, ”the press release noted.

  1. It is alleged that Fargesen and Palatnik raised funds from investors with false and misleading statements regarding the company's management, products and financial data, manipulated public stock prices and pocketed at least $ 4 million of US dollars ($ 4.9 million) from CanaFarma funds for their own benefit.

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  2. The former mayor

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  3. Former CannTrust Holdings Inc CEO Peter Aceto seen in the company's cannabis production plant in Fenwick, Ont., In 2018.

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But that does not appear to have been the case; criminal information reports that the company was unable to complete an IPO at the time. As such, it is alleged that the accused knowingly distorted the financial position of the company.

Instead, the embezzled funds were used for his personal use and that of his family, as well as to “make Ponzi-like payments to lull previous investors to sleep.”

The scheme ended in a loss of at least US $ 952,000 ($ 1.2 million) from victim investors, the statement added.

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“The public is reminded that information is not proof of guilt. The accused is presumed innocent and has the right to a fair trial during which the government is responsible for proving his guilt beyond a reasonable doubt, ”he emphasizes.

While not related to the charge, the United States Securities and Exchange Commission (SEC) filed a complaint in the fall of 2020 against a man of the same name “for leading a series of offers of unregistered securities for a cannabis company ”that he controlled.

The complaint contends that, from at least July 2014 to June 2019, he raised more than US $ 19 million ($ 24.3 million) from approximately 500 investors “by selling unregistered securities in violation of federal laws on securities “, and further claims to have embezzled 2.7 million US dollars. ($ 3.5 million) from investor funds for its own benefit.

The man “is currently working as a consultant for a new cannabis-related company looking to raise funds from investors,” noted the 2020 SEC complaint.

Earlier this year, JD Supra – which publishes and distributes content produced daily by trade experts across many industries and fields – noted that there appears to be a recent trend in securities enforcement actions focused on l ” accuracy and completeness of important investor information, investor solicitation activities and properly conduct compliant securities offerings.

In October, two men were charged with securities fraud, wire fraud and related offenses related to a scheme to defraud investors in a Canadian cannabis and hemp company.

In September, three men in the United States were involved in a cannabis-related scheme in which they allegedly raised around US $ 2 million ($ 2.6 million) from retail investors through separate companies, but ended up using the money for personal matters.

And last May, a woman from Illinois and a man from Georgia were charged with fraud and conspiracy after they allegedly duped approximately 650 million U.S. dollars ($ 787 million) investors into telling them that their money supported legitimate investments, including livestock and cannabis.

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