Integrated National Resources, Inc. dba WeedGenics, Rolf Max Hirschmann aka "Max Bergmann," and Patrick Earl Williams
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25733 / May 23, 2023
Securities and Exchange Commission v. Integrated National Resources, Inc. dba WeedGenics, et al., No. 8:23-cv-00855-JWH (KESx) (C.D. Cal. filed May 16, 2023)
SEC Shuts Down Weedgenics $60 Million Cannabis Offering Fraud
The Securities and Exchange Commission obtained an emergency order to halt an alleged ongoing offering fraud and Ponzi-like scheme by Integrated National Resources Inc. (INR), which does business as WeedGenics, and its owners, Rolf Max Hirschmann and Patrick Earl Williams, who have raised more than $60 million from investors to expand their cannabis operations, but have instead used the majority of funds to make $16.2 million in Ponzi-like payments and to enrich themselves.
According to the complaint, since at least June 2019, Hirschmann and Williams have promised investors they would use raised funds to expand WeedGenics facilities, which they guaranteed would produce up to 36 percent returns, but in reality Hirschmann and Williams never owned or operated any facilities-it was all a sham. The complaint alleges that when Hirschmann and Williams received investors' funds, they transferred the money through multiple accounts to enrich others and for personal use such as entertainment, jewelry, luxury cars, and residential real estate. The complaint further alleges that in an attempt to avoid detection, Hirschmann, acting as the face of the company, used the fake name Max Bergmann the entire time he communicated with investors, while Williams, as Vice President of the company, worked behind the scenes while spending investor funds on his more public career as a rap musician known as "BigRigBaby."
The court granted the SEC emergency relief against INR, Hirschmann, Williams, and several relief defendants, including a temporary restraining order, an order freezing their assets, and appointment of a temporary receiver over INR and the entity relief defendants. A hearing is scheduled for June 2, 2023 to consider whether to issue a preliminary injunction and appoint a permanent receiver.
The SEC's complaint, filed in federal court in the Central District of California, charges the defendants with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions, conduct-based injunctions, disgorgement with prejudgment interest, civil penalties, and officer and director bars. The SEC also seeks disgorgement with prejudgment interest from the named relief defendants.
The SEC's Office of Investor Education and Advocacy encourages investors to review the Investor Alert on Frauds Targeting Main Street Investors, and to access the investor protection resources at Investor.gov.
The SEC's investigation was conducted by Christopher A. Nowlin and Stephen Bucci and supervised by Finola H. Manvelian of the SEC's Los Angeles Regional Office. The litigation will be led by Daniel S. Lim and supervised by Gary Y. Leung.