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An investor has brought a class action against several allegedly sham hemp and cannabis real estate businesses and individuals that he claims were involved in a crowdfunding scheme that fraudulently raised nearly $2 million.
Jeffrey Carter filed a complaint in California federal court Thursday. The defendants include Robert Samuel Shumake Jr., Willard Jackson and Nicole Birch, all of whom were also named in a U.S. Securities and Exchange Commission action accusing them of issuing unregistered securities through their firms 420 Real Estate LLC and Transatlantic Real Estate LLC.
Similarly to the SEC, Carter says the individual defendants diverted investor funds for personal use after raising nearly $2 million in crowdfunding offerings. He also claims Shumake was the "driving force" behind the offerings, but that his name and participation were kept secret in order to hide his past criminal conviction related to a mortgage fraud scheme.
