Makers of cannabis-infused water indicted in $10 million ‘pump and dump’ stock scheme
CLEVELAND, Ohio — A California maker of cannabis-infused water and its top officials were accused on March 14 of raking in more than $10 million in illicit profits by manipulating unsuspecting investors.
American Premium Water Corp. and its leaders, including CEO and Chairman Alfred Culberth, fleeced more than 200 northern Ohio residents out of some $219,000 in a “pump and dump” scheme, according to an indictment unsealed in federal court in Cleveland.
American Premium Water, headquartered in Playa Vista, California, and six others are charged in the 13-count indictment involving the scheme. The company is charged with conspiracy to commit securities fraud and the six officials face charges of securities and wire fraud.
No attorneys are listed in court records for the group. cleveland.com and The Plain Dealer reached out to the company for comment.
American Premium Water makes cannabis-infused and alkaline-infused water under the brand name Lalpina, according to regulatory filings. In marketing materials, the company said its water could decrease inflammation and pain, provide anti-aging benefits and reduce muscle fatigue before, during and after exercise.
The scheme was carried out between 2013 and 2019, according to the indictment. Culberth set up American Premium Water as a shell company that was publicly traded while controlling a substantial number of shares via family members or other associates, according to the indictment.
He paid high-pressure stock promoters to make aggressive calls to investors, including a call room headed by Christian Stoltz, who is also charged in the case. Stoltz and callers never disclosed to investors they were affiliated with American Premium Water, according to court records.
Culberth and two other CEOs for the company— Ryan Fishoff and Zachary Davis— issued preferred shares to Mark Gumbel, a middleman between company officials and the call room, and a Florida woman named Lorena Moreno, court records say.
Company officials directed press releases that touted the product, including some that said the products “may prevent cancer.” The company also claimed the product “prevented brain damage” and aggressively pursued investors under false pretenses. Those steps inflated the price of the stocks, the indictment said.
The company pushed stocks on unsuspecting investors while officials knew they planned to sell the stocks for a profit before prices tumbled, court records said.
Culberth and other officials sold off their stocks and directed others like Moreno when to sell their shares. Moreno paid Culberth and Fishoff kickbacks for the information, according to the indictment.
Read more from cleveland.com:
©2023 Advance Local Media LLC. Visit cleveland.com.
Distributed by Tribune Content Agency, LLC.
