Debra BorchardtThe former CEOs of American Premium Water Corp., Zachary Davis and Ryan Fishoff, pleaded not guilty in a $10 million pump-and-dump scheme that cost Ohio investors more than $219,000, according to Law360.
The indictment was first filed in the Northern District of Ohio on March 8 against six individuals associated with the cannabis-infused water company. While Fishoff is described as a former CEO, he is still listed as the current CEO for the latest iteration of the company.
The Con
The case claims that Davis and Fishoff, along with Chairman and original CEO Alfred Culbreath, Christian Stolz, Mark Gumbel, and Lorena Moreno, issued millions of shares in the company and artificially controlled the trading volume and price of the stock.
This enriched themselves and caused investors in the company to lose money.
The Players
American Premium Water Corp., which manufactured CBD-infused water, was formed as HIPH and traded on the over-the-counter stock under the symbol HIPH.
According the case filing, Culbreath, Davis, and Fishoff paid stock promoters but didn’t disclose those payments.
Stolz worked as a stock promoter. He took payment for the promotion and also didn’t disclose he was doing so. The court filing states that Stolz placed trades to manipulate the stock price and was aware of the moves by the company.
Gumbel is accused of introducing HIPH to the stock promoters and also operated a company called Artistic Ventures which controlled some of the HIPH stock. Moreno also held stock, paid stock promoters, and while trading the shares, paid kickbacks to Culbreath.
How It Began
Culbreath acquired a shell company Expert Group and changed the name to American Premium Water in 2013. He created HIPH as a publicly traded stock but issued preferred shares to himself, Gumbel, and Moreno.
The case states, “After obtaining control of substantial amounts of stock, the Defendants fraudulently engineered price movements and trading volume in HIPH stock by coordinating the sale of large blocks of shares timed with the issuance of press releases and paid solicitation of public investors.”
Stolz was accused of “painting the tape” by executing small trades near the close of the market to artificially inflate or stabilize the price.
The trades stretched from 2013 to 2019. The case noted that from 2014 to 2015, Culbreath, a Culbreath family member, Moreno, and Gumbel received approximately $4.5 million in stock proceeds from the fraud.
The court document outlines in detail the numerous trades and amounts of money shifted among the players. The scheme ultimately delivered roughly $10 million in proceeds to the group. In 2018, roughly 205 investors in Ohio purchased HIPH stock for $219,719.59.
Undercover Work
In 2018, an undercover law enforcement official got introduced to the group. This person agreed to buy $200,000 worth of stock at a discount, and the person who made the introduction was to get a 10% kickback. Stolz was supposed to get $70,000 of the $200,000 to pay the promoters and salespeople.
The undercover person, however, wanted a test run on the brokerage account to make sure that the HIPH stock would be accepted for the purchase.
They did two tests for $10,000 each and triggered a $1,000 kickback to the individual who made the introduction. With that complete, the undercover person and the introducing individual never ended up consummating the $200,000 purchase.
The grand jury that heard the case wants the defendants to forfeit all property derived from the proceeds of the scheme.
Not Guilty
Law360 reported that Davis was released on a $50,000 bond, while Fishoff was released on a $100,000 bond. Law360 also reported that Fishoff must report to the Southern District of New York for supervision, turn over his passport, and can only travel to Ohio for the case or to New Jersey or Connecticut to visit family.
It went on to say Davis must report to the Central District of California for supervision, turn over his passport, and can only travel to Ohio for the case. Both Fishoff and Davis are prohibited from trading stocks and securities without the court’s permission, and Davis was further ordered to avoid contact with his co-defendants.
Stolz’s arraignment is scheduled for Thursday.
It’s Crypto … No Wait, EV
In 2022, American Premium Water Corp. approved the acquisition of 100% ownership of CloudXchange DataCentre Inc., an entity that engages in crypto-mining related business through its wholly owned subsidiary CloudXchange DataCentre Pte Ltd, to diversify the company’s earnings. The purchase price of the transaction was $45.6 million.
To fund the acquisition, the company issued restricted common shares of equivalent value to Chan Heng Fai, Ambrose, the sole shareholder of CloudX.
Then in March 2023, American Wealth Mining Corp. approved the company’s strategic shift towards sustainable electric construction vehicles, furthering the company’s focus on its investment and joint venture agreement with New Energy Asia Pacific Co. LTD to have exclusive distribution rights in the U.S., Australia, Korea, Dubai, Indonesia, Singapore, and Malaysia. AWM will be changing its name to New Energy CV Corp., but HIPH will remain as the company’s ticker symbol.
“The company’s strategic focus in the short term is to establish our operations in the U.S. We are currently looking for an OEM partner to manufacture these vehicles in the States to cater to the U.S. domestic market. We are also working on establishing distribution in the other territories (North America (U.S. and Canada), United Arab Emirates, Singapore, Australia, Malaysia, S. Korea, and Indonesia) that are covered in our JV with New Energy,” Fishoff said.
