CanaFarma’s co-founders pled guilty to charges related to the misappropriation of nearly $1.8 million of investor money, eliminating the need for a trial that was slated for next week.
According to Law360, Vitaly Fargesen and Igor Palatnik admitted to one count each of conspiracy to commit securities fraud and conspiracy to commit wire fraud. The pleas followed their arrest in October 2021 over allegations that they provided misleading information regarding the hemp company’s financial prospects, aiming to raise $14 million.
Damian Williams, U.S. Attorney for the Southern District of New York, described the actions of the two businessmen as a “sophisticated scheme.” In a statement, Williams said they did it to “obtain millions of dollars from investors with the promise that their money would be spent on building a legitimate company.”
“Instead, they lied about their business, lied to their auditors, and stole millions of dollars of investor funds,” he said. “Today’s guilty pleas reflect my office’s commitment to prosecuting those who greedily lie to investors to line their own pockets.”
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