September 16, 2016

An SEC investigation found that William J. Sears and his brother-in-law Scott M. Dittman recorded and trumpeted revenues for purported sales of “Pharm Pods” — containers used for growing marijuana sold by their company Fusion Pharm Inc. — which was really just money “round-tripped” from illegal stock sales by hidden affiliates.  An SEC investigation found that Sears orchestrated the scheme while Dittman served as the CEO and sole officer of Fusion Pharm.  They hired Cliffe R. Bodden to help them create fraudulent corporate documents that enabled Fusion Pharm to issue common stock to three other companies controlled by Sears, who then illegally sold the restricted stock into the market for $12.2 million in profits while hiding the companies’ connection to Fusion Pharm.  Sears then transferred some of his illegal proceeds back to Fusion Pharm so the money could be falsely reported as revenue and the company issued press releases and financial reports that misled investors to believe the revenue came from sales of PharmPods.  Sears, Dittman, Bodden, Fusion Pharm, and Sears’ three other companies agreed to settle the SEC’s charges with monetary sanctions to be determined at a later date.  SEC

Tagged in: Financial and Investment Fraud,