LOS ANGELES (CN) — Federal investigators say a Beverly Hills man who was serving the tail end of his 135-month fraud sentence in home confinement immediately embarked on a new scam that swindled investors out of more than $9 million for a made-up hemp venture.
Mark Roy Anderson, 68, was indicted Tuesday on five counts of wire fraud related to a scheme in which he falsely told investors that their money would be used for a hemp farm he owned in Central California and to extract CBD from the hemp plants, a variety of cannabis that has a wide range of industrial and medicinal uses.
"Anderson allegedly attempted to maintain a veneer of trustworthiness by taking steps to assure investors Harvest Farms Group was legitimate and 'he was not the Mark Roy Anderson’ with multiple prior fraud convictions,” according to a statement from the U.S. attorney's office in Los Angeles.
An attorney for Anderson didn't immediately respond to a request for comment on the allegations.
Anderson has a string of fraud convictions that goes back more than 30 years. In the mid-1980s he ran a Ponzi scheme that solicited money from investors to purchase and restore historic buildings around the country, according to the affidavit of the FBI agent investigating the hemp fraud. That scheme earned him a 7-year prison sentence.
After he was released, Anderson started a chain of eye-surgery centers, but that venture collapsed after his business partner was arrested on health care fraud charges. Then in the mid-2000s, he set up another Ponzi scheme — this time cheating investors out of $9 million for what the FBI says was a "misdescribed" oil business.
That sent him prison for 135 months, though he got released to home confinement for the last part pursuant to the Elderly Offender Pilot Project because he was already in his 60s by then.
After he was released from federal prison in May 2019, but still serving his sentence, Anderson contacted an Arkansas-based investment manager to pitch his fictitious hemp business, according to the FBI. He told this individual that he owned a farm in Kern County, California, and converted the hemp into medical grade CBD isolate to be sold to companies making CBD products.
Prosecutors say Anderson, a disbarred lawyer, claimed that he was a third- or fourth generation farmer and that he had created a company called Harvest Farm Group, Inc. to operate the hemp business. Pressed to provide the location of his farm, Anderson gave the GPS coordinates of "his farm," which turned out to be the location of a vineyard owned by an unrelated party.
He also provided pictures and videos of the hemp he had supposedly recently harvested at the farm but which afterwards appeared to be stock images found on the internet, prosecutors say.
The Arkansas investment manager fell for Anderson's pitch and raised more than $9 million to invest in the project, according to the indictment.
Anderson used the money to buy a $1.3 million house with surrounding citrus groves in Ojai, California, as well as for more than $650,000 worth of luxury and vintage cars, over $400,000 in cash withdrawals and more than $142,000 in retail purchases and other personal expenses, according to federal prosecutors.
He's being held without bail and faces a maximum sentence of 20 years in prison on each count of wire fraud if convicted.
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