Cannabis pod company execs face fraud charges

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The U.S. Attorney’s Office for Colorado has charged two men who ran a Denver-area company that transformed shipping containers into growing pods for food and cannabis with securities fraud, mail fraud and wire fraud.

William Sears, 50, and Scott Dittman, 47, were also barred from securities trading,  the Denver Business Journal reported. Their company is named FusionPharm Inc.

Federal authorities allege that Sears and Dittman hid their stock ownership in the business from securities regulators. Sears was also charged with filing a false income tax return.

Dittman and Sears held a majority of the shares in FusionPharm, but the two allegedly covered up Sears’ involvement so they could peddle the shares to investors and falsely prop up the business, the Denver Business Journal reported.

The Securities and Exchange Commission, meanwhile, alleged that Sears presented himself as a securities dealer and made $12.2 million by selling FusionPharm shares while concealing his connection to the company. Some of that money went back to FusionPharm and was falsely reported as revenue, investigators allege.

The SEC separately launched administrative proceedings against Beverly Hills, California, attorney Tod DiTommaso, a former corporate counsel to FusionPharm, alleging he wrote letters that provided false legal cover for Dittman’s and Sears’ stock sales.

The FBI, the Internal Revenue Service, and the U.S. Postal Inspection Service participated in the investigation.

If convicted, Sears and Dittman could face up to five years in federal prison and $250,000 in fines.