An Oregon man has been fined $60,000 by the Department of Consumer and Business Services for swindling $80,000 from an investor for a marijuana-related enterprise, the Oregonian reports.
The department concluded that Todd Grange scammed the Colorado investor into financing a business called THC Pharmaceutical, which the state called a “sham public offering.” Grange claimed that he had been in business for five years and had raised $9 million from 27 different investors; however, the fraudulent company was never incorporated in Oregon — or anywhere else.
“This is a classic case of a fraudster going out there and pitching an investment that is clearly too good to be true using the hot new industry as the hook,” Jake Sunderland, spokesman for the department, said in the report. “Sometimes it’s oil. Sometimes it’s gold and sometimes it’s silver. In this case, it’s marijuana.”
Grange told the investor that his $25,000 investment would be worth about $1 million in shares after THC Pharmaceutical merged with a publicly traded company. The investor never received any shares because “there is no evidence” that any merger was planned and “would be impossible because THCP did not exist,” the order said.
State investigator Chris Aldrich called the ploy a “pyramid scheme.”
“There is no evidence to support that THCP is anything but an internet website which solicits funds,” he wrote in an affidavit included in the order.
Grange appealed the order but dropped out of the appeals process. In order to procure restitution, the parties must negotiate a resolution, but it does not appear that Grange is willing to cooperate in those negotiations. The case could go next to an administrative law judge.