A new lawsuit accuses cannabis insider Vincent Zadeh of committing a new cannabis fraud scheme.
Investor Greg Levin alleges that Vincent Mehdizadeh, who goes by the name Vincent Zadeh, convinced him to invest $290,000 into Pineapple Ventures with promises of a $5,000 monthly dividend payment. The promised payments were never delivered, and Levin was unable to recoup his investment.
Levin also claims he was unaware that Zadeh had been in trouble with the Securities and Exchange Commission before, which resulted in a $12 million settlement.
According to the court complaint, Levin responded to an investment ad for Pineapple Ventures. Zadeh claimed he had successfully worked in cannabis for a decade, never mentioning the previous legal trouble. Zadeh guaranteed Levin a $5,000 a month dividend payment and assured Levin that if he was unhappy with the investment then Zadeh would cash him out.
Zadeh also told Levin that he had connections with celebrities Seth Rogen and Joe Rogan, which turned out to be false.
The case states that in December 2019, Levin paid $290,000 for 1% of Pineapple Ventures. Despite Levin being the contact for the deal, Pineapple’s CFO Jaime Ortega signed all the documents. The promised monthly payments never materialized, and in December 2020, Levin wanted to exercise his option to get out of the investment. Pineapple was supposed to pay him $319,000 for his shares.
Levin claims that he received some payments from the company, and Zadeh offered to give him shares in publicly traded Pineapple Inc. since he was unable to return the investment. Levin says he is still owed $180,000.
He also wants Zadeh and his associates punished so that they don’t repeat the fraud scheme to others. He claims had he known of the previous Medbox scheme, he likely wouldn’t have invested in Pineapple Ventures.
According to a 2017 SEC’s complaint, Medbox provided marijuana consulting services and claimed to sell vending machines known as “Medbox” devices capable of dispensing marijuana on the basis of biometric identification. The SEC alleged that Vincent Mehdizadeh created a shell company called New-Age Investment Consulting to carry out illegal stock sales and used the proceeds from those sales to boost Medbox’s revenue.
The statement read, “Medbox allegedly issued press releases headlining the phony revenues as record earnings to legitimize itself as a viable commercial operation when in fact nearly 90 percent of the company’s revenue in the first quarter of 2014 stemmed from sham transactions with New-Age. Mehdizadeh allegedly acknowledged in a text message that ‘the only thing we are really good at is public company publicity and stock awareness. We get an A+ for creating revenue off sheer will but that won’t continue.'”
According to the SEC’s complaint, Mehdizadeh funded the purchase of a luxury home in the Pacific Palisades with proceeds from New-Age’s illicit stock sales.
The SEC’s complaint additionally charges Medbox’s then-CEO Bruce Bedrick with being complicit in the scheme and personally profiting. The SEC also charged New-Age and Mehdizadeh’s then-fiancée Yocelin Legaspi with unlawfully selling unregistered securities. Mehdizadeh installed Legaspi as the supposed CEO of New-Age when he created the company.
Mehdizadeh and Medbox, which has since changed its name to Notis Global, agreed to settle the SEC’s charges, with Mehdizadeh agreeing to pay more than $12 million in disgorgement and penalties and be barred from serving as an officer or director of a public company or participating in any penny stock offerings.
Levin suggested this is why Ortega signed the documents instead of Zadeh even though Zadeh is active in the operations of the company.