LAS VEGAS (Legal Newsline) — The Securities and Exchange Commission (SEC) has announced fraud charges against William J. Sears, Scott M. Dittman and Cliffe R. Bodden for their alleged scheme involving illegal stock sales and false financial filings of a company that makes containers for growing marijuana.
Sears purportedly masterminded the scheme with help from Dittman, his brother-in-law, who was the CEO and sole officer at Fusion Pharm Inc. Together, they allegedly hired Bodden to develop fraudulent documents for the company. These documents, according to the SEC, allowed the company to issue common stock to three companies controlled by Sears. Sears then purportedly sold the restricted stock illegally into the market for $12.2 million in profits.
Some of the proceeds were put back into Fusion Pharm, making it look to investors like the revenue came from sales of Fusion Pharm’s product, PharmPods.
The three individuals, FusionPharm and Sears' other three companies agreed to settle SEC charges. Monetary sanctions will be determined at a later date, but all three members of the scheme are barred from the penny stock business.
“Sears and Dittman misled investors by recording and trumpeting revenues for purported sales of PharmPods when they were really just round-tripping money from illegal stock sales by hidden affiliates,” said Julie K. Lutz, director of the SEC’s Denver Regional Office.