An out-of-state company that purchased holdings in Manatee County, Florida, is now under fire for federal violations including securities fraud. The Arizona company, known as Cannabis-Rx, bought land with the intent to build a licensed marijuana facility. However, it appears that the embattled company and its owners are in deep trouble for tax crime, as Cannabis-Rx is thought to be a shell company for a money laundering scheme.
In all, six people associated with the company have been indicted for allegations related to tax fraud, securities fraud and money laundering. Those defendants range in age from 29 to 70, according to local news reports. Only one defendant -- the oldest -- is an American citizen. The others must be extradited from the Bahamas, Belize and Canada. Further, several corporate defendants have also been named, including a number of limited-liability companies.
The defendants are accused of purchasing several buildings in Florida that had been previously owned by a boat manufacturing company. Those transactions occurred in late March and early April, according to federal authorities. The company also allegedly began to fraudulently trade stock in the company, essentially violating tax laws and regulations governing U.S. securities. The oldest defendant reportedly told an undercover officer that he had selected his corporate structure to exploit rules enacted under the Foreign Account Tax Compliance Act, which has been implemented during the Obama administration.
Criminal defendants who are facing allegations of tax evasion or tax fraud should realize that these violations may lead to very serious consequences. Defendants may be required to pay massive fines or spend time in prison, even if their crimes were strictly financial. Every tax fraud case is unique, which is why defendants often benefit from the advice provided by a team of legal defense professionals.
Source: Bradenton Herald, "Cannabis-Rx, with property in Manatee, named as part of securities fraud in federal indictment" Charles Schelle, Sep. 10, 2014