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.
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