The Securities and Exchange Commission (SEC) filed a complaint against Robert Russell on January 21 in a federal court in Santa Anna, California. The complaint accuses Russell and his partner, Guy Scott Griffithe, of defrauding investors of $4.85 million dollars, the Seattle Times reports.
No charges have been filed in the case, but the SEC has charged Russell and Griffithe with a host of civil violations and seeks the return of their fraudulent gains. Robert’s wife Sonya was also listed in the complaint as a “relief defendant.”
The complaint alleges that the men promised investors large profits from their now-defunct Green Acre Farms in Anacortes, Washington. The SEC says many investors cashed in their retirements or took loans from family members to invest, while the Russells and Griffithe allegedly took $3.5 million of the money and spent it on luxury cars, a 65-foot yacht, and other luxury goods.
Using shell companies in California, Griffithe is alleged to have enticed “at least” 25 investors to invest in SMRB, Green Acre Farms’ parent company.
“Griffithe and Russell exploited popular interest in the cannabis industry to obtain millions of dollars from investors who thought they were buying into a profitable business.” — Melissa R. Hodgman, the associate director of the SEC’s Enforcement Division, via the Seattle Times
Green Acre Farms has sold a total of $6,495,454 of cannabis products since they were granted a producer/processor license in February 2016, according to 502data.com, a website dedicated to tracking Washington State cannabis revenue. During the last month of sales before the farm closed in December, the company sold $96,010 in cannabis; throughout the life of the business, sales were frequently above $150,000 a month. Despite these seemingly large receipts, according to the SEC complaint, Green Acre Farms was never profitable.
Get daily cannabis business news updates. Subscribe