Colorado’s legal marijuana market has seen its share of foul play. Marijuana entrepreneur, Scott Pack, is presently under investigation for what has been dubbed “the largest fraud case in the history of Colorado’s marijuana industry.”
Back in April, Scott Pack’s legal matters arose when two investors, Pierre and Christophe Raygot, alleged Pack and his investment team persuaded them out of $500,000. Pack’s team included his father, Michael, as well as Rudy Saenz, hedge fund manager of Harmony & Green, Pack’s company.
The first occasion transpired in 2015, when non-Colorado residents did not have authority to invest into marijuana businesses, since the law has changed. The Raygots are both foreign nationals, one from Thailand and the other from Portugal. It was believed that Pack would bring them into the marijuana business, without being residents of the state. Henry Baskerville, legal representative of the Raygots’ maintains his clients were deceived.
“At the time, Pierre could not invest directly in a marijuana business,” Baskerville said in an interview. “So, it was represented to him that the legal way he could still participate in the industry was to invest in a company that would eventually own or manage properties in which a grow would operate. But he was given some conflicting information about what the structure would be, which is what we’ve tried to convey in the second amended complaint.”
Baskerville stated several statements were made by Pack and his team involving the business that blatant lies. Particularly, the valuation of Harmony & Green, where the investment was going, as well as the allegation that Pack was raising money for another grow facility, which was never executed.
“There were a number of times Scott represented over Facebook Messenger that they were obtaining new grows and looking for money to purchase a new facility—but it appears that those representations were not true,” Baskerville said.
Baskerville added, “From what we’ve been able to gather so far, it appears that the money was funneled directly into the marijuana business, and we believe it was used to repay other investors or funneled into the Packs’ pockets”.
A new lawsuit has since been filed, according to Baskerville which “provides more details about what we believe to be false statements made to our clients.”
“There’s a back-and-forth where Scott said they received $5 million in funding. We think that’s false, too. And there’s a long, detailed Facebook conversation where Scott said they needed a bridge loan of $400,000 because they had the opportunity to purchase a property for $1.6 million. Scott said they only needed the money for 30 to 90 days, and because they’d be getting a mid-month cash infusion of $500,000, the risk would be virtually nothing. But as far as we can tell, that was completely made up.” Baskerville stated.
While Pack has upheld his innocence throughout the lawsuit, Harmony & Green’s website contradicted his innocence. A post by an anonymous author gave its clients an honest apology regarding its CEO.
The post stated, “Harmony & Green’s former employees would like to offer a public apology to the company’s investors and their families. The CEO, Scott Pack, and his partner, Rudy Saenz, defrauded you. You have been disregarded, lied to and kept in the dark. So were we. You deserved better. You are good people who trusted in a vision that was peddled to you by people who never had any intention of living up to its lofty idealism”.
The post has since been taken down.
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