SEC Shuts Down WeedGenics $60 Million Cannabis Offering Fraud

The Securities and Exchange Commission (SEC) has taken urgent action to halt an alleged fraudulent scheme conducted by Integrated National Resources Inc. (INR), also known as WeedGenics, and its owners, Rolf Max Hirschmann and Patrick Earl Williams. The SEC claims that Hirschmann and Williams raised over $60 million from investors under the pretense of expanding their cannabis operations but instead misappropriated the majority of the funds. They allegedly made Ponzi-like payments totaling $16.2 million and used the money to enrich themselves.

According to the complaint, Hirschmann and Williams deceived investors since June 2019 by promising to use the raised funds to develop WeedGenics facilities, guaranteeing high returns of up to 36%. However, it is alleged that they never owned or operated any legitimate facilities; it was all a fraudulent scheme. The complaint further alleges that once they received investors’ money, Hirschmann and Williams transferred it through multiple accounts to benefit others and used it for personal expenses such as entertainment, jewelry, luxury cars, and real estate. Hirschmann operated under the false identity of “Max Bergmann” when communicating with investors, while Williams, acting as Vice President of the company, spent investor funds on his public career as a rap musician known as “BigRigBaby.”

Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office, stated, “Rolf Hirschmann and Patrick Williams allegedly had no real company, no product, and no business, yet despite this, they promised investors everything and then delivered nothing.” Layne emphasized that the SEC has the capability to uncover fraud and protect investors, even in cases where the defendants have taken significant measures to evade detection.

The court has granted the SEC emergency relief, including a temporary restraining order, asset freeze, and the appointment of a temporary receiver over INR and the other defendants. A hearing is scheduled for June 2, 2023, to determine whether a preliminary injunction should be issued and a permanent receiver appointed.

The SEC’s complaint accuses the defendants of violating securities laws’ antifraud provisions and seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and officer and director bars. The SEC also aims to recover funds with prejudgment interest from the relief defendants named in the lawsuit.