The co-founders of CanaFarma in New York were accused on Tuesday of baseless revenue projections and lying about where their hemp was coming from.
Vitaly Fargesan and Igor Palatnik started CanaFarma in 2019, and told investors their hemp was being produced on their own farm, but in actuality was bought through a third party.
The cofounders also claimed they would eventually sell hemp chewing gum along with other hemp-derived products, which never happened.
$4 million of the investor’s money were used for personal use by Fargesen and Platanik.
The SEC in New York is seeking permanent injunctions, disgorgement and prejudgment interest, and civil penatlies, according to HempIndustryDaily.
Read the statement by the SEC here.