It seemed like a good investment—a company that repurposes and refits old shipping containers into hydroponic growing “pods” for local Denver agriculture, as well as the state’s burgeoning cannabis industry. These refurbished containers, complete with installed grow lighting, were known as “PharmPods.” They were marketed as portable hydroponic greenhouses that would solve the problem of finding viable land for agriculture by creating vertical growing spaces in urban areas.
An affiliated company, Vertifresh, was responsible for selling lettuce to local restaurants that was alleged to be grown in PharmPods.
Unfortunately, while the “pods” were real, the company that sold them wasn’t.
Sears and Dittman owned the majority of the stock in FusionPharm, but concealed Sears’ involvement in order to sell stocks to others. The principals misrepresented their sales and income with monies that came from illegal stock trading, and used the money to make the company look not only profitable, but growing. At one point, the company’s shares sold at $8.70 per share. However, a large supply of fake shares were also sold into the market through a company called Microcap Management. These stocks and transfers went from April 2011 through May 2014.
Two years ago, the SEC suspended trading on FusionPharm because of the lack of information on the company’s stock ownership.
According to the SEC, Sears made $12.2 million selling these company shares and represented himself as a broker-dealer, but concealing the fact that he was an owner. While showing investors what a great company FusionPharm was, they were reporting investor money as revenue.
The SEC has barred both men, plus a FusionPharm employee, Cliffe Bodden, from participating any future penny stock sales offerings, as well as Sears’ companies. Sears can no longer practice as an accountant in front of the SEC, and Sears and Dittman can no longer be an officer, advisor or director of any public company. They each face five years in prison.
In February of 2013, a judge sentenced Bodden, who helped create many of the fraudulent documents, to 74 months in prison in a separate action involving fraud with investors.
Additional information from the US District Attorney’s office in the District of Colorado has a website with additional case information, and a page for victims of the case.
Did You Purchase Stock In FusionPharm?
While the company is no longer, you may be able to recover monies if you were defrauded by a cannabis company. Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida, and represent investors nationwide to help recover investment losses due to stockbroker misconduct and other investment-related wrongdoing. Most cases handled on a contingent fee basis. This means that you won’t any pay legal fees unless we are successful. Call us toll free at 800-975-4345, or use our online contact form to get in touch.