The Securities & Exchange Commission obtained an emergency order to halt an alleged ongoing offering fraud & Ponzi-like scheme by Integrated National Resources Inc. (INR), which does business as WeedGenics, & its owners, Rolf Max Hirschmann & Patrick Earl Williams, who have raised more than $60 million from investors to expand their cannabis operations, but have instead used the majority of funds to make $16.2 million in Ponzi-like payments & to enrich themselves.
According to the complaint, since at least June 2019, Hirschmann & Williams have promised investors they would use raised funds to expand WeedGenics facilities, which they guaranteed would produce up to 36 percent returns, but in reality Hirschmann & Williams never owned or operated any facilities—it was all a sham. The complaint alleges that when Hirschmann & Williams received investors’ funds, they transferred the money through multiple accounts to enrich others & for personal use such as entertainment, jewelry, luxury cars, & 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.”
“Rolf Hirschmann & Patrick Williams allegedly had no real company, no product, & no business, yet despite this, they promised investors everything & then delivered nothing,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. “This action demonstrates that, despite the defendants’ extensive efforts to avoid detection, the SEC has the ability to uncover fraud to protect investors.”
The court granted the SEC emergency relief against INR, Hirschmann, Williams, & several relief defendants, including a temporary restraining order, an order freezing their assets, & appointment of a temporary receiver over INR & the entity relief defendants. A hearing is scheduled for June 2, 2023 to consider whether to issue a preliminary injunction & appoint a permanent receiver.
The SEC’s complaint charges the defendants with violating the antifraud provisions of the securities laws & seeks permanent injunctions, conduct-based injunctions, disgorgement with prejudgment interest, civil penalties, & officer & director bars. The SEC also seeks disgorgement with prejudgment interest from the named relief defendants.
The SEC’s Office of Investor Education & Advocacy encourages investors to review the Investor Alert on Frauds Targeting Main Street Investors, & to access the investor protection resources at Investor.gov.
The SEC’s investigation was conducted by Christopher A. Nowlin & Stephen Bucci & supervised by Finola H. Manvelian of the SEC’s Los Angeles Regional Office. The litigation will be led by Daniel S. Lim & supervised by Gary Y. Leung.