This day in Washington, DC, in the year 2023:
An Outline of the Specific Charges Against the CEO of American Patriot Brands Inc.
The Securities and Exchange Commission (SEC) charged American Patriot Brands Inc. (APB), a company that grows and sells cannabis, its CEO, and five other entities and people today for their parts in a multiyear scheme to steal more than $30 M from over a hundred backers all throughout the country.
The SEC has filed a lawsuit in the U.S. District Court for the District of Puerto Rico against APB, its CEO Robert Y. Lee, and executives Brian L. McLaughlin and Jeremy S. Pallas and J. Bernard Rice.
They are accused of making false and misleading statements to investors about the company’s financial situation, the scope of its operations, the value of its Oregon cannabis farm, and the safety and security of investing in the company since at least the middle of 2016. The complaint says that APB moved millions of dollars from investor earnings to the personal bank accounts of APB executives and spent tens of thousands on the executives’ lavish lifestyles.
The Securities and Exchange Commission complaint names “American Patriot Brands Inc.” as the company in question. and some of its senior executives made up business profits and prospects to lure investors with lies that left investors with almost worthless securities in the end.” Carolyn M. Welshhans, Associate Director of the SEC’s Enforcement Division The SEC is “committed to holding responsible those who seek to profit via falsehoods and fraud,” and this action shows that commitment in action.
Accusations of antifraud violations are made against APB, Lee, Pallas, and Rice, as well as APB subsidiaries DJ&S Property #1 LLC, TSL Distribution LLC, and Urban Pharms LLC. the federal securities laws. It asks for permanent injunctive relief, disgorgement with prejudgment interest, civil penalties, and officer and director bans.
As relief defendants, the case names three related companies: Legion Accounting Services, Inc., Puerto Rico One Corp., and Castro Business Enterprises, Inc. It also asks for disgorgement with prejudgment interest from these three companies.
With the help of accountant Jamie Wohlert, Ms Welshhans and Ms Amy L. Friedman oversaw the SEC investigation done by Andrew Elliott and Brianna Ripa. Samantha Williams will be in charge of the litigation, with James Carlson providing oversight.