A rapper named BigRigBaby and his business partner have been accused by federal regulators of operating a “Ponzi-style scheme” to collect nearly $62 million from investors in a bogus cannabis company.
Patrick Earl Williams, 34, and Rolf Max Hirschmann, 52, have been charged in a civil lawsuit filed by the Securities and Exchange Commission this week.
According to the complaint, Williams, better known online as BigRigBaby, and Hirschmann plundered investors in a fake marijuana grow operation, spending much of the money on “payments to women” and personal expenses like luxury cars, jewelry and adult entertainment.
The duo “allegedly had no real company, product or business, yet they promised investors everything and then delivered nothing,” Michele Wein Layne, director of the SEC’s Los Angeles regional office, said in a statement.
The SEC obtained an emergency order to end Integrated National Resources Inc.’s alleged “ongoing bid fraud and Ponzi-like scheme” that operates under the name WeedGenics.
Patrick Earl Williams, aka BigRigBaby, is seen with a new Corvette model. Williams and his business partner have been accused by federal regulators of running a “Ponzi-like scheme.”
WeedGenics billed itself as a “vertically integrated” cannabis product manufacturer
“This lawsuit demonstrates the SEC’s ability to uncover fraud to protect investors, despite defendants’ extensive efforts to avoid detection,” Layne said.
Attempts to reach Williams and Hirschmann through WeedGenics were unsuccessful, and court records did not show an attorney representing the duo.
As of June 2019 at the latest, Hirschmann and Williams promised investors returns of up to 36 percent on the money they believe would go toward expanding WeedGenics’ cultivation facilities in California and Nevada, according to the SEC in a court filing.
“In truth, however, it was all a sham,” the file continues.
The SEC said the couple spent about $16 million of the investor’s money making payments to other investors, creating the illusion that their company was generating revenue.
Williams received approximately $8 million in investor funds, of which approximately $625,000 was spent on food, jewelry, adult entertainment and other personal expenses, the complaint said.
Williams received about $8 million in investor money, of which about $625,000 went on food, jewelry, adult entertainment and other personal expenses, the SEC said
The complaint included this breakdown of how Williams and Hirschmann allegedly spent the investors’ funds
According to the SEC, Williams spent more than $18,000 to further his music career as BigRigBaby
Williams, who lives in Florida, also spent more than $18,000 to further his music career as BigRigBaby, including payments to producers, DJs and iHeartMedia, according to the SEC.
In addition, according to the complaint, approximately $1,976,000 of investor funds were transferred to Williams’ personal bank accounts or withdrawn in cash.
Hirschmann lives in Idaho and, according to regulators, gave the wrong name “Max Bergmann” when communicating with potential investors.
According to the disclosures, Hirschmann and his companies received approximately $15,673,000 in investor funds, of which approximately $4.8 million was spent on real estate and $2.4 million on luxury automobiles.
He also used about $3.2 million of the investor’s funds to make credit card payments and withdrew $913,000 in cash, the SEC said.
WeedGenics describes itself on its website as a “vertically integrated” manufacturer of cannabis products.
The website says the company has a 52,000-square-foot “annex campus” in Las Vegas and is experiencing “massive expansion” with a new annex facility in Adelanto, California.
In reality, according to the SEC, none of the assets were real and the company produced nothing.
A hearing in the case is scheduled for June 2 to consider whether to issue an injunction and appoint a permanent liquidator.