Marijuana Business|Goes Up in Smoke


LAS VEGAS (CN) — It’s not the marijuana business that got three men and their five companies in trouble — it’s the securities violations.
     The lead defendant, Hemp Inc. — formerly known as Marijuana Inc. — is run by its 65-year-old CEO Bruce Hay Perlowin of Las Vegas. He’s also one of its major shareholders.
     “This long-running and profitable scheme resulted in the sale of hundreds of millions of unregistered and purportedly unrestricted Hemp shares to public investors,” the SEC says in its June 20 federal complaint. “The execution of this scheme involved, among other things, purported gifts and consulting agreements that do not appear to have been bona fide and fraudulent statements made to commission-registered broker-dealers.”
     Also sued is Jed M. Perlowin, 55, of Parkland, Fla., and the companies he “at least nominally controls,” Diversified Investments, and Quantum Economic Protocols, both Nevada LLCs.
     Also sued is 64-year-old Barry Keith Epling, of Las Vegas, and his companies, Ferris Holding and Hobbes Equities, both Nevada corporations.
     Essentially, the men gave hundreds of millions of unregistered Hemp shares to one another, and to their companies, to be sold into the market, the SEC says.
     For instance: “On August 1 and November 14, 2012, Ferris received a combined total of 100,000,000 Hemp common shares (50,000,000 on each date) as gifts from Harmony Financials, LLC (‘Harmony’) in recognition of ‘affection and appreciation for over 20 years of friendship and loyal assistance,'” the SEC says in the complaint.
     It adds: “During the relevant period, the majority of Ferris’s revenue and all of Hobbes’ revenue came from the sale of Hemp shares.”
     It’s unclear from the 16-page complaint how much money was made, or lost, but the SEC says that in June 2013, when Bruce Perlowin resigned from Quantum — to which he had transferred 168 million shares of Hemp — and Perlowin’s brother Jed took over Quantum, “(a)t the time, the company had an asset value, based upon its ownership of Hemp stock, of over $9,000,000.”
     “The defendants’ scheme involved, among other things, the use of nominees, phony gifting of stock, bogus consulting agreements, and forged documentation, all of which were utilized to avoid registration requirements and sell Hemp securities,” the SEC says.
     Boys, boys. The SEC seeks disgorgement, injunctions and penalties for six counts of securities fraud.

%d bloggers like this: