"The Securities and Exchange Commission today charged American Patriot Brands Inc. (APB), a cannabis cultivation and distribution company, its CEO, and five other entities and individuals for their participation in a long-running scheme in which they raised more than $30mln from more than one hundred investors across the country and siphoned off millions of those funds to enrich themselves," the statement said.
SEC file a complaint in the US District Court for the District of Puerto Rico. The court documents showed that since at least 2016, APB, its CEO Robert Lee and other current and former executives provided investors with a number of false statements regarding the company’s activities, including its financial condition and the scope of operations, the statement noted.
"The complaint alleges that APB funneled millions in investor proceeds to the APB executives’ personal accounts and spent tens of thousands on the executives’ personal expenses," it added.
The complaint charged APB, those individuals and three APB subsidiaries with violating the antifraud provisions of the federal securities laws. The commission seeks permanent injunctive relief, disgorgement with prejudgment interest, civil penalties, and officer and director bars against charged persons, according to the statement.