A California startup that raised $60 million to develop a marijuna-growing operation was actually a Ponzi scheme with the money used to buy luxury cars, houses and adult entertainment and to sustain the rap career of one of the company’s founders, federal regulators said. The Securities and Exchange Commission alleged in a civil complaint filed in California federal court that WeedGenics and its owners, Rolf Max Hirschmann and Patrick Earl Williams, promised investors that their money would be used to expand existing operations in California and Nevada.
But investigators say the company, which was legally registered as Integrated National Resources Inc., was a sham and never operated any marijuana-related businesses at all. “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,” said Michele Wein Layne of the SEC. Instead, the agency said the money was mostly funneled into the pockets of Hirschmann, 52, of Eagle, Idaho, and Williams, 34, of St. Petersburg, Fla., with $16.7 million being used to pay back earlier investors. The SEC says that between 2019 and April of this year, the pair managed to raise $60 million f …
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