A handful of CBD and cannabis companies turned out to be figments of the imagination as a con artist successfully duped investor after investor, but his conning spree has come to an end.

A California man pleaded guilty April 5 to a slew of federal criminal charges for swindling investors out of $18.4 million. He conned several investors—all as he was already completing a sentence for prior criminal charges—by inventing companies that he claimed invested in hemp farms and cannabis-infused retail products. He also claimed to run a sham bottling business for CBD-infused products. The bogus businesses turned out to quickly fall apart.

People magazine reports that Mark Roy Anderson, 69, pleaded guilty to two counts of wire fraud, according to an announcement from the U.S. Attorney’s Office, Central District of California.

Anderson took the plea agreement, and admitted to engaging in two separate schemes that swindled investors. His scheme kicked off right after he was released from federal prison while he was on home confinement and supervised release. Police say Anderson has been conning people since the 1990s but moved into the cannabis sector where there was a lot of loot to be gained.

From June 2020 to April 2021, Anderson convinced investors to fund his company Harvest Farm Group, to harvest and process hemp grown on his farm into medical-grade CBD isolate. 

“Anderson convinced investors to invest in Harvest Farm Group by falsely representing that, through the company, he owned and operated a hemp farm in Kern County,” the report reads. “He also lied that had already completed successful and profitable harvests of hemp from the farm. He also falsely said he was using his own machinery and equipment to convert the hemp into CBD isolate and Delta 8, a psychoactive substance that, like CBD isolate, could be used in consumer products ranging from olive oil to body cream.”

Anderson weaseled his way out of skeptical investors and claimed that past fraud convictions were not in fact him. When investors demanded money, Anderson falsely told them that sales of products derived from hemp grown at the farm had been delayed because of the COVID-19 pandemic.

In another scheme, which ran from April 2021 to May 2023, Anderson duped investors by soliciting money for Bio Pharma and Verta Bottling—two more sham companies—by claiming that these businesses successfully manufactured, bottled, and packaged commercial products.

Specifically, he claimed Bio Pharma manufactured and sold infused products such as CBD-infused avocado oil, olive oil, pain cream, gummies, tequila, and chili oil. Anderson also claimed that Verta Bottling manufactured and sold beverages and a variety of food products.

“Anderson falsely stated that his bottling companies owned and possessed millions of dollars’ worth of assets, including—in Bio Pharma’s case—hemp biomass, CBD isolate, CBD oil, and—in Verta Bottling’s case—manufacturing equipment and an assignable lease for a warehouse to manufacture and sell its products,” the announcement reads.

How did he do this? Anderson carefully fabricated fake legal and business documents, which included fake purchase order contracts that he claimed showed agreements with third-party companies to purchase tens of millions of dollars’ worth of products manufactured by his bottling companies. Anderson also provided victims with fake samples of products he claimed that he manufactured by his bottling companies.

Investors have been warned about bogus cannabis companies before.

In 2019, Massachusetts Secretary of the Commonwealth William Galvin issued a warning to potential cannabis industry investors to be wary of scams and unscrupulous operators after filing fraud charges against two entrepreneurs in the state. In an alert released by Galvin’s office, the secretary urged investors to approach offers for unregistered securities from unlicensed sellers with caution, noting that the cannabis industry is not monitored by federal regulators or state-chartered banks.

“No one regulator can police this marketplace,” Galvin said in the statement. “My Securities Division intends to scrutinize these offerings to proactively prevent investor harm.”

Celebrities like Tom Hanks and Sacha Baron Cohen have been targets of fake CBD or cannabis companies, sometimes in the form of fake endorsements or misuse of their likenesses. Sacha Baron Cohen’s massive $9 million lawsuit was filed against a dispensary that ran a billboard ad with his image without permission, but the actor and plaintiff have reached an agreement to drop the lawsuit.

According to court documents filed on July 12, 2021, Sacha Baron Cohen filed a $9 million lawsuit against Somerset, Massachusetts-based Solar Therapeutics, a dispensary, for running a billboard ad with his image without his permission.

Solar Therapeutics erected a billboard on an interstate highway in Massachusetts that features a picture of Baron Cohen as Borat, with his thumbs up and the words “It’s Nice!,” one of Borat’s catchphrases.

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On August 4, former Adelanto, California mayor Richard Kerr was found guilty of taking cannabis-related bribes while in office. According to coverage from the Los Angeles Times, Kerr was sentenced to federal prison for 14 months.

Initially, federal prosecutors sought to sentence Kerr to 46 months, but U.S. District Judge John W. Holcomb reconsidered the sentence because of Kerr’s age at 66 years old, in addition to his two decades of service in the Marines, as well as family-related responsibilities.

Kerr was elected as Adelanto’s mayor in 2014, a small desert city in southwestern San Bernardino County. Kerr claimed that 40% of Adelanto residents lived in poverty at the time (as of data from 2014-2018, that percentage has decreased to 26.5%) and he wanted to make the city the “Silicon Valley of medical marijuana.”

In 2017, Kerr was arrested by federal officials for taking a $10,000 cash bribe, and also trying to find someone to burn down his restaurant (called Fat Boyz Grill) so he could collect the insurance. The following year in 2018, Kerr’s house was raided by the FBI and he was seen in handcuffs outside of his home.

Later in 2021, he was charged with accepting $75,000 in bribes while in office, which influenced approval for cannabis-related ordinances and permits.

Finally in February 2023, Kerr pleaded guilty to fraud. The most recent case revealed that he considered bribery funds as donations to a charity fund.

Carlos L. Juarez, Kerr’s attorney, defended his client by claiming that he didn’t have a college education and was naïve. “He did his darnedest to serve the people but along the way got caught up in a web of political corruption,” Juarez stated. 

Kerr called his actions the result of “stupidity” and “doing dumb things.” However, he praised how the cannabis industry benefited the city, bringing “thousands of jobs and hundreds of new homes.”

However, U.S. Attorney Sean Peterson addressed the seriousness of Kerr’s actions. “It’s not that there was just one bribe. It’s serious conduct,” Peterson said, asking the judge for Kerr to serve four years in prison as an example of the consequences for others who choose a similar path.

Many witness came forth to discuss Kerr’s behavior. One local, Edwin Snell, said that Kerr promised him and his partner that they would be permitted to open a dispensary in the city, but Kerr sold the permit “to the highest bidder.” “He promised us a dispensary and Semper Fi’d it,” said Snell. “Every person that voted for him was betrayed. Every person that voted for him was hornswoggled.”

Another resident, Diana Esmeralda Holte, said in 2017 that she applied for a dispensary license, but her attempt was rejected because she wouldn’t pay a $7,000 bribe. “I think he deserves a million years, but 20 would be reasonable,” Holte said.

In his defense, Juarez said the court case and ruling is “a complete embarrassment to Kerr.” While once well-renowned and respected in the community, he has brought his family name to shame,” he described.

Kerr’s supporters wrote letters to the judge, explaining that he grew up in poverty, has issues with alcohol, suffers from emphysema (a lung disease that causes breathlessness), and supports five of his grandchildren. Kerr’s wife in particular spotlighted his more positive decisions as mayor, which included movies in the park, a public rodeo event, and food and toy drive donations during the holidays.

Former Adelanto mayor pro tem Jermaine Wright was convicted in 2022 for accepting a $10,000 bribe from an undercover federal official claiming to be a cannabis business owner. Wright was sentenced to five years in prison.

A recent podcast called “Dreamtown: Adelanto,” which premiered at the Tribeca Film Festival in New York City, covers the city’s history and corruption, as well as Kerr’s involvement in the cannabis industry. “…reporter David Weinberg delves into what happened when a newcomer on the local council helped the city legalize weed production, and documents the fallout that happened next,” wrote High Times author Molly Lipson.

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