What happened to the $ 650 million cannabis ponzi program?

Last May, the US Department of Justice indicted Reva Joyce Stachniw of Illinois and Ron Throgmartin of Georgia of running a Ponzi program that raised $ 650 million from investors across the country.

Based on the Colorado Grand Jury’s indictment, it lasted from late 2017 to early 2019, causing investors to suffer millions in losses. Court documents state that Reva and Ron, along with a conspirator named Mark Ray, committed fraud by falsely showing their victims that their financial investments were backed by legitimate companies in the cattle industry. To solicit money, they used fake documents for their Colorado-based marijuana business, Universal Herbs LLC.

Investor victims were promised gains of around 10-20% in just a few weeks. However, neither Ray, Throgmartin nor Stachniw have revealed to their victims that they are actually using their money to pay other investors via a classic Ponzi investment system and to make money themselves, says the Justice Department. Above all, Throgmartin and Stachniw have apparently made millions with it, even if they invest little or no money of their own in their business.

Throgmartin and Stachniw were both charged with conspiracy on bank fraud and remittance fraud, conspiracy in financial transactions involving property from unknown illegal activities, and remittance fraud on five counts. If convicted, both face a maximum of 30 years in prison on top of a $ 1 million fine for conspiracy to commit bank and wire fraud, a $ 250,000 fine for wire fraud and 20 years in prison. A federal district judge will finalize the verdict after considering U.S. sentencing guidelines and other legal issues.

Not the first cannabis ponzi program

Participating in Ponzi schemes related to the cannabis industry is not a new event.

In February 2020, a Seattle cannabis farm owner was charged with running a Ponzi program that grossed $ 4.85 million from at least two dozen investors in California, Arizona, Washington, and Texas.

60-year-old Robert Russell of Duvall has been charged by the US Securities and Exchange Commission for violating federal securities law, the Seattle Times reports. There was also a complaint with the SEC, filed in a California federal court on Jan. 21, finding that investors were drawn to the offer because of Russell’s generous profits from his cannabis farm. Green Morning Pharms. Russell worked with a co-conspirator, Guy Scott Griffithe of California, who used $ 3.5 million of investor capital on “extravagant luxuries, inappropriate personal expenses and unrelated business ventures,” according to the SEC complaint. These included a yacht and luxury vehicles.

Authorities say the cannabis farm, which closed in December last year, never made a profit.

What exactly is a Ponzi scheme?

A Ponzi scheme is a type of scam in which fraudulent investments promise high returns. Operators try to lure victims by showing that there is little risk when returns are typically made for past investors while later investors take the blow. It’s similar to pyramid schemes, where both scams are based on using the funds of later investors to repay the original investors.

Furthermore, both scams will eventually be discovered when there are no more new investors and there is a clear lack of cash. At this point, the scams will resolve on their own. Companies that join Ponzi programs end up spending all of their time and effort looking for new customers to invest in. The money then goes to the original investors for their returns.

And how do you avoid one?

Whether you are in the cannabis industry or have another business in another industry, anyone can be lured into a Ponzi scheme. Since the cannabis industry is considered “hot,” scammers know this is a lucrative opportunity for their victims.

Here are signs to look out for:

1. Unusually High Returns: Exceptionally high investment returns are a big red flag to any scam. While there are many ways to implement a Ponzi program, they follow the same principles: All investors are promised unusually high returns when compared to normal investment opportunities. In other words, it sounds too good to be true.

2. Consistently high performance: Anyone who has ever dealt with investments knows that the markets will always rise and fall over time. Because of this, your investment in a legitimate business will reflect these changes. Ponzi schemes and scams will attempt to attract victims with constant, steady returns regardless of market conditions.

3. Guaranteed Returns: Another important cautionary note is guaranteed returns because any well-worth investor will know that it is impossible. Even if you invest a small amount, there is always some risk. Always be suspicious of anyone who offers guaranteed returns on your investment.

4. Unregistered Investments: Always request a copy of SEC registration or proof that the company is registered with government regulators for any investment. Don’t take anyone’s word for it who promises to be a legitimate, registered business without seeing evidence.

5. Complicated, Mysterious Functions: Many Ponzi schemes involve mysterious strategies. That’s because they are fraudulent. Don’t listen to people who tell you that the incredibly high returns are due to a secret in their investment strategy; they can also use cryptic language that is difficult to understand. If you are too trusting, it can cause problems.

Remember to stay away from Ponzi and pyramid schemes in the future.

HEMP AND CANANBIS SCAM, READ MORE ..

CBD OIL FOR DOGS ARE POPULAR, EVEN THE CHAMING DOG OWNERS!