Rapper BigRigBaby's WeedGenics Company Was A Ponzi Scheme

Sit back and listen to a story where rapper BigRigBaby (Patrick Earl Williams) and his partner Max Bergmann (Rolf Hirschmann) steal millions of dollars of investor money from their “WeedGenics” company. This is eCrimeBytes.com S 2 Ep 6-2: Rapper BigRigBaby’s WeedGenics Company Was A Ponzi Scheme – Act 2: Green Investments.

For the background, see please check out our prior act:

Rapper BigRigBaby’s WeedGenics Company Was A Ponzi Scheme – Act 1: Meet The Playas

Sources:

Transcript:

00:00:10:00 – 00:00:15:13
Keith
Hey welcome back to eCrimeBytes Season two, Episode six.

00:00:15:20 – 00:00:40:09
Keith
This is the rapper BigRigBaby. His company, WeedGenic ends up being a Ponzi scheme. And we last just gave you all the background. We we met the players and we met BigRigBaby who was Patrick Earl Williams. We met Rolf Hirschmann, who was also known as Max Bergmann, and we talked about there’s going to be some other defendants that were kind of sprinkled throughout here that aren’t as important.

00:00:40:11 – 00:01:11:02
Keith
And there’s this company, INR, that basically is the same thing as WeedGenics, which is supposedly a cannabis cultivation company. Okay, So that’s where we left you at this point in their corporate existstance they decide they need to expand. And as anybody has ever tried to expand anything knows it takes money and usually to expand. You don’t have the money to expand or otherwise you would be big, right?

00:01:11:04 – 00:01:35:02
Keith
So you got to go out there and find investors. Investors were sought by WeedGenics and they were given information. You know, they didn’t just say, Hey, will you please invest in my weed company? Trust me, we’re doing a bunch of stuff and it’s really great. And people would fork over money. Didn’t work like that. Usually people would do their due diligence and they would say, All right, why what would I be investing in?

00:01:35:02 – 00:01:55:03
Keith
And they say, Oh, well, it’s this company. They’d slap down an Excel spreadsheet of financials and they’d say, Oh, this is what our input is, This is what our output is financially, and this is it broken down over quarters. And oh, here’s our maps and locations of our growth facilities and our corporate headquarters and all this other stuff.

00:01:55:05 – 00:02:00:08
Keith
Oh yeah. In addition to the maps, we have photos of our offices and,

00:02:00:08 – 00:02:11:11
Keith
our logos on the offices and everything that makes it look like a legitimate business company. So you can imagine while we’re talking about this, this is the type of collateral or,

00:02:11:11 – 00:02:18:21
Keith
like brochures and things like that that investors are given to facilitate their investments.

00:02:18:23 – 00:02:47:04
Keith
Now, this I want to highlight this huge because if you ever are thinking about investing and you hear someone say this, this is a gigantic red flag. Investors were told that their payments would be stable and guaranteed. Usually if it’s an investment, it’s not stable or guaranteed. And when you start hearing those words, you got to start wondering what is it that what is it that I’m actually investing in?

00:02:47:04 – 00:02:52:00
Keith
And there’s going to be a couple of other red flags when you add to this later on that you’re going to say, oh, that’s a Ponzi scheme,

00:02:52:00 – 00:02:54:06
Keith
right off the bat, Oh, that’s a Ponzi scheme,

00:02:54:06 – 00:03:05:06
Keith
this being one of them in Ponzi schemes. This is consistent and early investors are often paid out exactly as promised. So if I was,

00:03:05:06 – 00:03:15:13
Keith
investor five coming in here and I invested $100,000 and I was promised out $25,000 on the $100,000, I would typically get it,

00:03:15:13 – 00:03:16:26
Keith
being one of those early investors.

00:03:16:26 – 00:03:23:06
Keith
So that way later investors would see that and say, oh, this is a valid investment. I should put my money into this.

00:03:23:06 – 00:03:38:17
Keith
So how do these investments work with respect to WeedGenics? So this time span is between June of 2019 and April 2023. So it’s a very fresh case. They offer their investments online. So right there, that’s,

00:03:38:17 – 00:03:42:01
Keith
I mean, that’s electronic crime and there’s going to be electronic evidence

00:03:42:01 – 00:03:56:09
Keith
when investors that saw their collateral or their brochures online contacted INR to invest or to get more information, they then came into contact with this individual named Max Bergmann.

00:03:56:09 – 00:03:57:26
Keith
And this is Rolf Hirschmann.

00:03:57:26 – 00:04:26:28
Keith
He answered them and became their contact person throughout this whole process. And this is for online and in-person meetings now. Max Bergmann And I’m going to say Max Bergmann because that just sounds funny. He would give these potential investors some type of collateral or some type of material so that they thought this whole enterprise was legitimate.

00:04:27:01 – 00:04:28:06
Keith
And,

00:04:28:06 – 00:04:49:12
Keith
they purportedly had a couple different facilities, one in Adelanto, California, and one that they were looking to build and expand upon in Las Vegas, Nevada. And so he would give them the material that I just talked about earlier, the financial spreadsheets, detailed revenues and expenses and so forth.

00:04:49:12 – 00:04:59:15
Keith
Now, the investment itself lasted five years. So if you were an investor and you were interested in this, they would take your money as an investor for five years.

00:04:59:15 – 00:05:04:00
Keith
So you’d expect to not see at least your principal for five years,

00:05:04:00 – 00:05:14:17
Keith
they said in the investment that any money will be used, and I’m quoting here for the purposes of operating additional marijuana grow facilities. Okay.

00:05:14:17 – 00:05:25:22
Keith
Additional details about this investment. The investors are guaranteed and a fixed annual interest rate between 19.5% and 36%.

00:05:25:22 – 00:05:30:21
Keith
That, to me is another red flag. When you’re cheeky.

00:05:30:23 – 00:05:35:24
Seth
Dr. Jones, are those not abnormally high interest rate payouts?

00:05:35:26 – 00:05:40:24
Keith
Well, the word guaranteed even is just like that’s abnormal. You know.

00:05:40:26 – 00:05:51:12
Seth
Like I don’t invest a ton of my money in in weed dispensaries, but I have to imagine any investment that offers between 20 and what was the other number?

00:05:51:14 – 00:05:53:03
Keith
36, 36%.

00:05:53:03 – 00:05:57:15
Seth
I mean, why wouldn’t you invest all your money into that then, if it’s guaranteed?

00:05:57:18 – 00:06:05:14
Keith
Yeah. When I initially read this, I was like, Wow, that seems really high. And then I thought about it. I was like, Maybe this is just what rich people make on their money when they’re able to invest,

00:06:05:14 – 00:06:21:00
Keith
millions of dollars. Who knows? I don’t know. But yeah, it’s really high and it’s guaranteed. So you add those red flags to the red flag earlier and already this thing is starting to smell like a fraudulent scheme of some sort.

00:06:21:02 – 00:06:31:29
Keith
So the investors are promised this guaranteed fixed payment. And after 60 consecutive monthly disbursements, meaning you’re getting the

00:06:31:29 – 00:06:46:27
Keith
the interest of the money over six months. So at the end of the five years now, investors have the choice to either renew your investment for another five year term or have your full initial investment capital returned. Okay, bookmark this in your mind.

00:06:46:29 – 00:07:05:04
Keith
So if you’re an investor, supposedly after five years, you should be able to get your original money back in addition to get your interest payments over 60 months as well. Okay. So you should be able to get everything back at the end of five years and you can see what actually happens in this case.

00:07:05:04 – 00:07:05:19
Keith
Now,

00:07:05:19 – 00:07:15:09
Keith
I put a couple notes in here for myself that in true scheme fashion, it was like they were hitting all the buzzwords, right?

00:07:15:09 – 00:07:15:18
Keith
Where

00:07:15:18 – 00:07:36:01
Keith
one of the big things that they did is capped the amount that you could invest. So like I said earlier, it sounds like an incredible, incredible amount of interest that you be gaining on your money. But then they say later on, we’re only taking X amount of investments. And when they put the cap on that, it makes it sound more exclusive.

00:07:36:01 – 00:07:47:13
Keith
And people are saying, well, why wouldn’t I invest all my money if I could get 36%? But they put a cap on it. And just to give you some numbers here so you can kind of gauge what we’re talking about, they said

00:07:47:13 – 00:07:57:29
Keith
the what they’re selling to investors is $18.75 million worth of capital, and it represents 50% capital.

00:07:57:29 – 00:08:05:08
Keith
So in total, there’s 37.5 million in capital. In the California facility,

00:08:05:08 – 00:08:19:21
Keith
they said that the development happened in five phases and investor funds would be capped at 3.75 million for each phase. So already now it’s kind of setting up that, oh, I got to get in there. That urgency.

00:08:19:21 – 00:08:42:10
Seth
Okay. So a couple of more investment details here. There was a minimum of $25,000 required to get into the purchase space. That’s for the Adelanto facility. And that investment was subject to a five year minimum term with a fixed interest payments previously mentioned between 19 and a half percent to 36%, depending on the initial investment. I’m assuming the more you invest, the more you get back.

00:08:42:12 – 00:09:07:22
Seth
Now, investors could also get these additional equity ownership positions or a square foot possession at a rate of $250 per square foot. So INR was not, quote, subject to the volatility of stock markets, close quote, and its cultivation facilities produce, quote, consistent positive cash flow, close quote. And then INR also enjoyed strong financial performance and high profit margins.

00:09:07:22 – 00:09:24:20
Seth
These are all terms I guess are in the initial public offering or private offering rather in the offering documents. Now what’s interesting is there’s no way that any of that can be guaranteed, right? Unless they had some kind of fund devoted to making those minimums at some point that would run out if the market crashed or if suddenly,

00:09:24:20 – 00:09:28:06
Seth
let’s just say the government decided, hey, marijuana now is illegal again.

00:09:28:09 – 00:09:36:15
Seth
So it’s interesting that they were legally allowed to offer these things with those kinds of guarantees. I’m just not sure how any of that is legal.

00:09:36:15 – 00:09:54:07
Seth
So let’s talk about Hirschmann for a bit. Right. He was their chief investor relations. While Hirschmann coordinated the process by which the investors received and signed their agreements, BigRigBaby actually signed the agreements on behalf of INR as a vice president.

00:09:54:09 – 00:10:25:05
Seth
Now, those INR investor agreements were cross-referenced and incorporated by reference to statements contained in INR as written offering materials. So it’s basically the same language. Furthermore, INR is offering materials provided to investors, identified BigRigBaby as its core principle and vice President. Now we’ve mentioned that a few times. Additionally, INR is a website identified defendant BigRigBaby as a core principle early founder and VP of the company.

00:10:25:07 – 00:10:28:06
Keith
Yeah. So these guys are involved?

00:10:28:08 – 00:10:32:02
Seth
Yeah. We’re going to pause there. They are not passive, right? They are involved.

00:10:32:04 – 00:10:53:18
Keith
Yep. And we’re going to pause there with Act two because we’ve just described what the investment is from the investors standpoint. And we’re going to now describe a little more about what it is they say they’re able to do once they get the investments. And we’re just getting to the point where it’s almost going to fall apart. So hang with us.

00:10:53:20 – 00:11:18:02
Keith
Our next act is called the High Life. And if you look at anything in this act, act two, please like and subscribe. Specifically, if you’re on Apple podcast, please leave us a five star review there and just say something nice. Those reviews help us pop up the search algorithm, Apple’s specifically and our audio only side of the house.

00:11:18:05 – 00:11:38:21
Keith
About half of our listeners are on Apple Podcasts, so that would help us out a lot. And if you haven’t, visit our website, please do e crime bytes. It’s e c r i m e b y as in yellow milk t e s dot com. And if you’re watching this on video, you’ll actually see that at the beginning and the end of this you can just go there

00:11:38:21 – 00:11:40:05
Keith
and I think that’s it.

00:11:40:06 – 00:11:49:03
Keith
So stick with us and we’ll talk we’ll tell you a little more about this investment slash Ponzi scheme in the high life next.

#ecrimebytes #cybersecurity #computer #electronic #truecrime #podcast #security #hacker #humor #funny #comedy #bigrigbaby #rapper #weedgenics #ponzi #ponzischeme #fraud

DrKeithJones.com

Rapper BigRigBaby’s WeedGenics Company Was A Ponzi Scheme – Act 2: Green Investments

Sources:

Transcript:

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