SEC v. CanaFarma Hemp Products Corp.

CanaFarma Hemp Products Corp., Barone and Chumenko, along with CanaFarma and its two co-founders, Vitaly Fargesen and Igor Palatnik, allegedly raised millions of dollars from investors. While raising these funds purportedly to operate CanaFarma, Fargesen and Palatnik allegedly made misrepresentations to investors, including claims that CanaFarma was a fully integrated company that was processing hemp from its own farm, when in fact it had not processed any hemp and its products used hemp oil supplied by third parties. The amended complaint alleged that Barone and Chumenko, at the direction of Fargesen, made unsupported changes to CanaFarma's financial model in order to disguise an expected series of payments to Fargesen and Palatnik. Additionally, the amended complaint alleged that Fargesen and Palatnik - in some instances with the assistance of Barone and Chumenko - misappropriated at least $4 million of investor funds.

Summary generated from official Securities and Exchange Commission press release