On October 2, 2020, a group of investors filed a lawsuit in Maricopa County, Arizona against Patrick Horsman and a series of companies in connection with investments in a company called Integrated CBD. The lawsuit brings causes of action for, among other things, “fraud, constructive fraud, civil conspiracy, negligent misrepresentation, aiding and abetting tortious conduct, breach of the implied covenant of good faith and fair dealing, conversion, unjust enrichment,” and others.
The suit alleges that Horsman was “mastermind and ringleader” of “an elaborate scheme of fraud and material misrepresentations and omissions which induced Plaintiffs to invest in Integrated CBD.” Moreover, the Complaint alleges that the scheme was used to enrich Horsman and the other Defendants, costing Plaintiffs millions in losses.
Plaintiffs and other Integrated CBD investors are now seeking recourse after investing in Integrated CBD and with Horsman, who has had previous run-ins with securities regulators.
The Alleged Integrated CBD Scheme
The lawsuit alleges in great detail the following scheme:
- Horsman and the Individual Defendants represented Integrated CBD as a company that was created and would exist and operate to execute a farming operation to grow industrial organic hemp and extract CBD to sell to large industrial and multinational brands in the pharma and consumer space;
- Defendants knew this to be untrue from the start and throughout, but assuaged Plaintiffs’ inquiries, and eventual doubts and concerns—in order to induce Plaintiffs to invest; and
- Horsman and the Individual Defendants repeatedly represented that Integrated CBD had “[a]ccess to over 10,000 acres of certified organic/conventional farmland in Arizona.” This was a lie.
According to the Complaint, Defendants led investors to believe Integrated CBD had raised millions in capital and that these funds were not being used for Defendants’ personal benefit. However, the Complaint further alleges that Defendants extracted “ill-gotten gains” through “executive compensation and self-interested real estate transactions, among other things.”
The Lawsuit Alleges Integrated CBD’s Business Had Failed By January 2020, But The Alleged Fraud Continued in Various Ways
The lawsuit details the eventual demise of Integrated CBD’s business, which allegedly had occurred by January 2020. However, the lawsuit goes on to allege that through Defendant Horsman, Integrated CBD applied for a Paycheck Protection Program loan from the government designed to protect businesses impacted by COVID-19. According to the Complaint, “just months after running Integrated CBD into the ground, losing all of its employees, and after the PPP loan application was submitted by the already-defunct Company,” Horsman purchased a private jet that cost more than one million dollars. The Complaint even features a photograph of the jet.
Silver Law Group Investigating Claims Against Integrated CBD, Patrick Horsman, And Other Involved Parties
Silver Law Group is experienced in representing investors in claims concerning securities and investment fraud, Ponzi schemes, and other financial misconduct. Silver Law Group represents investors nationwide in securities arbitration claims, state and federal lawsuits, and class actions. Silver Law Group is currently investigating the misconduct identified in the Integrated CBD lawsuit. If you or someone you know invested in Integrated CBD and Patrick Horsman, please contact Silver Law Group for a confidential consultation at (800) 975-4799 or email email@example.com.