By Chris Prentice
NEW YORK (Reuters) - The U.S. Securities and Exchange Commission (SEC) on Tuesday said it obtained an order to shut down an alleged Ponzi-like scheme run by two individuals who raised nearly $62 million from investors for a sham cannabis business.
Since at least June 2019, Rolf Max Hirschmann and Patrick Earl Williams promised investors returns as high as 36% on funds they said would go toward expanding facilities for Integrated National Resources, or WeedGenics, in California and Nevada, the SEC said in a statement and court filing.
Those facilities did not exist, according to the SEC.
Hirschmann and Williams used most of the funds to pay off other investors, finance home upgrades, and buy luxury cars, jewelry and "adult entertainment," the SEC said in a complaint filed in federal court in California.
Neither Hirschmann nor Williams could be reached immediately for comment.
Williams, 34, lives in Florida and spent the money on his career as a rap musician known as "BigRigBaby," the SEC said.
Hirschmann, 52, lives in Idaho and went by "Max Bergmann" while communicating with investors, according to regulators.
"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," Michele Wein Layne, director of the SEC's Los Angeles regional office, said in the statement.
WeedGenics described itself as a vertically-integrated manufacturer of cannabis products on its website.
"It was all a sham," the SEC said.