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Alaska couple face fraud charges over marijuana ‘bud & breakfast’

An Alaska couple convinced investors they planned to build a "bud and breakfast" with glass ceilings so patrons could get high and see the northern lights.

(CN) — A couple in Alaska faces federal charges in what prosecutors say was a scheme to get people to invest in a fake legal marijuana business to build a “marijuana theme park” in a town almost 100 miles south of Fairbanks. 

According to the indictment, announced Wednesday by the Justice Department, Brian Keith Corty and his wife Candy Corty of Delta Junction, Alaska, started a company called Ice Fog Holdings in 2017 with the intent to grow, develop, manufacture and sell medical and recreational marijuana and marijuana products.

Prosecutors say that over the course of three years, the couple and others solicited investors to buy shares in the company, telling investors that Ice Fog was already generating income and that its application with the Alaska Marijuana Control Office was nearing approval. 

According to the indictment, in 2018 the couple then bought a hotel called the Midway Lodge near Delta Junction that they told their investors they planned to turn into both a site to grow, cultivate and sell marijuana and a "marijuana theme park" complete with a “bud and breakfast” with glass ceilings in rooms so patrons could lie in bed and watch the northern lights. 

But the couple did not have any “meaningful current or prospective revenue stream and little to no prospect to obtain a license from the Alaska Marijuana Control Office,” prosecutors say in the indictment.

Instead the couple enriched themselves and their associates to the tune of $722,000 by telling their investors to make stock and unit share transactions electronically to bank accounts in Delta Junction, prosecutors say. The largest investment came from an investor in New York, who wired $200,000 to the Delta Junction bank account according to the indictment. 

The couple faces charges of wire fraud, conspiracy to commit wire fraud, and a criminal forfeiture action.

“It’s an important case,” said Assistant U.S. Attorney Ryan Tansey. “Alaska is a small place, and $722,000 is a lot of money anywhere, but especially in Alaska.”

Tansey said he has never seen a case of someone starting a fake marijuana business. 

Alaska voters made recreational marijuana legal in 2015.

The couple's attorneys did not respond to requests for comment by press time. 

Categories / Business, Criminal, Regional

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