(This story has been updated to reflect that the accused could not be reached for comment.)
A Washington state cannabis farm was the focus of a multimillion-dollar Ponzi scheme, an illegal example of the sudden-riches mentality in the legal marijuana industry, according to federal officials.
Investors plowed $4.85 million into the alleged scheme from Green Acres Farms near Anacortes, Washington, according to a U.S. Securities and Exchange Commission complaint.
Many of the investors – lured by promises of huge profits – used retirement funds or family loans.
Instead of investing the proceeds into the marijuana farm, Robert Russell, of Duvall, and his California-based executive partner, Guy Scott Griffithe, spent $3.5 million of investors’ money on luxuries such as a 2008 Bentley Continental, a 2012 Mercedes Benz C-Class, a 2015 Porsche Panamera and a yacht, the SEC said.
Neither Russell nor Griffithe could be reached for comment. An attorney who is reportedly representing Robert Russell did not respond to an interview request from the Associated Press.
The SEC’s complaint, filed in federal court in Santa Ana, California, charges Russell and Griffithe with civil violations of federal securities law and seeks return of “ill-gotten gains.”
No criminal charges were filed.
“Griffithe and Russell exploited popular interest in the cannabis industry to obtain millions of dollars from investors who thought they were buying into a profitable business,” Melissa R. Hodgman, associate director of the SEC’s Enforcement Division, said in a statement.
The SEC said Green Acres Pharms was never profitable.
The Washington State Liquor and Cannabis Board has permanently discontinued Green Acres Pharms’ license to produce and process cannabis.
– Associated Press