The Securities and Exchange Commission (the “SEC”) charged GPL Ventures LLC, GPL Management LLC, Alexander J. Dillon, Cosmin I. HempAmericana, Inc., Panait (the “GPL Defendants”), and Salvador E. Rosillo, Seaside Advisors, LLC, and Lawrence B. Adams on Friday, August 13th (aka Larry Adams).
GPL Ventures LLC and GPL Management LLC are co-owned and controlled by Dillon, a 32-year-old New Jersey resident, and Panait, a 35-year-old New York resident and Romanian citizen. In addition, the two co-own and operate Blackbridge Capital LLC, a hazardous lending firm similar to GPL Ventures.
Lawrence Adams, 66, is the owner of Seaside Advisors LLC, a New Jersey corporation that bills itself as a consulting business that assists public firms in finding favorable financing.
According to the SEC Complaint, the GPL Defendants have been operating as unregistered dealers since 2017 by privately acquiring large blocks of stock in approximately 140 microcap issuers and publicly selling those blocks into the market for their own account, generating at least $81 million in gross proceeds.
The Complaint further claims that, as part of their continued dealer registration breaches, GPL Defendants illegally supported stock promotion activities in the microcap issuers with which they were dealing – an unlawful practice known as “stock scalping.”
Scalping acts by GPL Defendants included offering cash to HempAmericana in return for unregistered shares of its stock. The GPL Defendants then demanded that HempAmericana and its CEO, Rosillo, divide the profits of the transaction with Seaside Advisors. As a consequence, Rosillo sent monies to Seaside Advisors and its CEO, Lawrence Adams, as well as another person, in order to support the GPL Defendants’ illegal scalping and covert advertising operations.
HempAmericana made false public statements concerning how the cash obtained from the GPL Defendants were used. Seaside Advisors, Lawrence Adams, and another person recruited others to market HempAmericana. Those advertisements failed to disclose that the GPL Defendants sponsored the campaigns and that the GPL Defendants planned to sell HempAmericana shares while paying promoters to suggest that investors acquire the stock.
The SEC additionally charges the GPL Defendants with securities fraud for misrepresenting to broker-dealers about their participation in the scalping scam.
More Information about the HempAmericana Scheme
The HempAmericana scheme can be summarized as follows: (1) the GPL Defendants repeatedly acquired stock purportedly sold under the Regulation A registration exemption, contingent on the issuer sending a portion of the stock sales proceeds to Seaside; (2) Seaside then paid Individual A, a professional stock promoter; (3) Individual A hired promoters, or middlemen, who in turn hired other promoters, to promote the stock; and (4) the GPL Defendants sold the stock
Furthermore, the GPL Defendants lied to their stockbrokers that they were not participating in the promotional activities in order to deposit and sell their HempAmericana shares.
Furthermore, HempAmericana’s Regulation’s “Use of Proceeds” represents A circular neglected to disclose that major percentages of the proceeds from stock transactions would be utilized for stock marketing.
More about Seaside’s Participation
The GPL Defendants’ investment in HempAmericana was contingent on the business employing Seaside Advisors to promote the company’s stock.
To that end, Dillon introduced Salvador Rosillo to Lawrence Adams and Individual A, and required Rosillo to hire Seaside Advisors as a “consultant,” with the express understanding that Seaside Advisors, in turn, would subcontract Individual A to undertake a broad promotional campaign to allow the GPL Defendants to sell their shares at a profit.
While HempAmericana publicly revealed hiring Seaside Advisors as a consultant, Adams’ use of Individual A distanced HempAmericana and the GPL Defendants from the promotional activity’s financing.
The GPL Defendants instructed the particular distribution of offering proceeds between HempAmericana and Seaside Advisors early in the conspiracy.
For example, when the GPL Defendants paid $80,000 for 16 million shares of stock, the monies were sent to a HempAmericana escrow account, from which Dillon directed $50,000 to HempAmericana and $30,000 to Seaside Advisors.
When Seaside received the money from the GPL Defendants through HempAmericana, it transmitted different amounts, but often more than half, to Individual A for advertising purposes.
Overall, of the $7.4 million in stock purchase profits given to HempAmericana by the GPL Defendants throughout the conspiracy, $2.18 million was sent to Seaside Advisors, who in turn passed roughly sixty percent of it to Individual A.
We identified four issuers who hired Seaside Advisors and Adams, as well as the GPL Defendants:
- HempAmericana Inc (HMPQ)
- GD Entertainment & Technology Inc (GDET)
- Image Protect Inc (IMTL)
- American Energy Partners Inc (AEPT)
We also discovered that the four Issuers used the same primary group of stock promoters:
- Charlie Abujudeh (who was recently charged by the SEC and Indicted)
- Abraham Abu (Charlie’s brother)
- Sam Joudeh (Charlie’s other brother)
- Chris Benz
- Paul Benz (Chris’s brother)
- Kathy Benz (Paul’s wife)
- Allan Smethers (Chris’s long-time associate)
Odyssey Group Inc (ODYY), which was one of the Issuers listed in the Abujedah case, Sugarmade Inc (SGMD), Tiger Reef Inc (TGRR), The 4 Less Group Inc (FLES), and SPO Global Inc were among the other Issuers that used Adams and/or Seaside Advisors LLC (SPOM).
Richard Edelson submitted testimony before the SEC. Edelson, who also manages Get OTC Current, was engaged in the stock scalping schemes as the financial officer for at least four of the Issuers (HMPQ, GDET, IMTL, and GTEH) and since 2015, as a financial advisor for the GPL Defendants. Edelson, in instance, was the financial officer for HempAmericana Inc from January 2017 to August 2021, which spans the entire time in which the SEC believes the stock scalping operation was operating. According to the SEC Complaint, Edelson was presented to the issuers as an in-house accountant to help with the preparation of the issuers’ financial statements by the GPL Defendants.
According to the SEC, those financial statements and other corporate disclosures were utilized to deceive investors regarding the use of cash received from the GPL Defendants, concealing the fact that those funds were used to pay for stock promotions.
Edelson provided the SEC with information regarding the GPL Defendants’ bank accounts and brokerage accounts, as well as facts on how the GPL Defendants often deceived issuers into changing the original notes so that the GPL Defendants would be offered more advantageous terms.
Soham Awon, a former GPL Ventures employee, was another willing participant. Awon, who worked for Dillon and Panait from 2016 to June 2021, testified about how the GPL Defendants utilized a call room (typically staffed by college students) to find financially distressed issuers with aged debt and offer fresh money in return for selling big blocks of stock to GPL Ventures. Awon went on to explain how Dillon and Panait would frequently renegotiate the notes to obtain better conversion terms and even steeper discounts to the market price then, after utilizing stock promotions and investor relations companies to raise interest in the stock, selling those shares into the market.
It should be noted that, in addition to participating in the schemes as paid employees, both Richard Edelson and Soham Awon received a large block of shares as “consultants” for HempAmericana Inc on February 2, 2018, during the alleged stock scalping scheme, putting them in a position to profit from the illegal activities before deciding to come forward and provide information against the defendants in the case. According to an attorney letter submitted during that time period, Edelson obtained his shares in exchange for accounting services, while Awon received his in exchange for web development services.
Soham Awon is also documented as getting shares in Image Protect Inc on October 20, 2017, when the GPL Defendants were wreaking havoc on the issuer via debt conversions.
Tri-Bridge Ventures LLC is a limited liability company
Tri-Bridge Ventures LLC is another key entity that appears often among the GPL Defendant/Seaside Advisor issuers.
Tri-Bridge Ventures, like GPL Ventures and BlackBridge Capital, is a toxic financier whose primary activity is the regular buying and selling of securities.
According to publicly available papers, Tri-Bridge is overseen by John Forsythe III and shares office space in New York with GPL Ventures and BlackBridge Capital.
Tri-Bridge Ventures invested in all five GPL/Seaside issuers (HMPQ, GDET, IMTL, GTEH, and AEPT) as well as hundreds of other issues with GPL Ventures and/or Blackbridge Capital.
There is an unmistakable link between the GPL Defendants and Tri-Bridge Ventures, as verified by Forsythe III in a deposition from a separate civil complaint brought by a BlackBridge investor called Maneesh Awasthi in the Supreme Court of the State of New York Southern District on October 30, 2018.
Tri-Bridge was created in April 2016 at the same time as Blackbridge Growth Fund, according to Forsythe, after Forsythe and Dillon explored the notion of a 50/50 profit-sharing venture (50% of Tri-earnings Bridge’s go to the Blackbridge Fund). Forsythe was prepared to accept such a bargain since he claimed to be in financial trouble at the time due to a failing solar energy enterprise. Tri-Bridge received free office space and access to Blackbridge service providers, including Soham Awon, who was the office administrator at the time, in return for his readiness to split half of his earnings with Blackbridge.
Knowing these data increases the likelihood of more securities offences. Because Tri-Bridge and BlackBridge are partner companies, and GPL and Blackbridge are under common control, Tri-Bridge, Blackbridge, and GPL are acting as a trading group and may have violated securities laws on several occasions by jointly holding more than 10% of the O/S in the issues that they all financed.
Toxic financing harms issuers and shareholders enough without stock promotions, stock scalping, stock manipulation, and kickback schemes.