The U.S. Securities and Exchange Commission (SEC) obtained an emergency order to halt a Ponzi-like cannabis fraud scheme by Integrated National Resources Inc. (INR) d/b/a WeedGenics, and its owners, Rolf Max Hirschmann and Patrick Earl Williams. They have raised more than $60 million from investors and used the majority of funds to make $16.2 million in Ponzi-like payments and to enrich themselves.
According to the complaint, since at least June 2019, Hirschmann and Williams have promised investors they would use raised funds to expand WeedGenics facilities, which they guaranteed would produce up to 36%. In reality, Hirschmann and Williams never owned or operated any facilities—it was all a sham.
The SEC complaint alleges that when Hirschmann and Williams received investors’ funds, they transferred the money through multiple accounts to enrich others and for personal use such as entertainment, jewelry, luxury cars, and residential real estate. The complaint further alleges that in an attempt to avoid detection, Hirschmann, acting as the face of the company, used the fake name Max Bergmann the entire time he communicated with investors, while Williams, as Vice President of the company, worked behind the scenes while spending investor funds on his more public career as a rap musician known as “BigRigBaby.”
The court granted the SEC emergency relief against INR, Hirschmann, Williams, and several relief defendants, including a temporary restraining order, an order freezing their assets, and appointment of a temporary receiver over INR and the entity relief defendants. A hearing is scheduled for June 2, 2023, to consider whether to issue a preliminary injunction and appoint a permanent receiver.
The SEC charges the defendants for violating the securities laws’ antifraud provisions. The regulator seeks permanent injunctions, conduct-based injunctions, disgorgement with prejudgment interest, civil penalties, and officer and director bars. The SEC also seeks disgorgement with prejudgment interest from the named relief defendants.
