Why are the feds after Dan Bilzerian’s onetime marijuana company? His father has a theory.

October 26, 2022 · L.A. Cannabis News

If Dan Bilzerian had listened to his father and not taken his marijuana company public, the brash Instagram celebrity’s Ignite International Brands might not currently be under investigation by both the U.S. Securities and Exchange Commission and the Department of Justice.

“There is no reason to have a public company unless you intend to raise capital” from public markets, as Dan Bilzerian’s father, Paul, told MJBizDaily in an interview last month.

Paul Bilzerian, who said he is now serving as an unpaid adviser to his son’s company, was speaking on behalf of Ignite because Dan was unavailable to comment.

The elder Bilzerian himself is a notorious one-time corporate raider who served time in prison for securities fraud and famously managed to hide most of a $62 million SEC judgment from being collected.

Before Ignite went private in August, investigators from both the SEC and the FBI subpoenaed the company for a vast number of documents, according to recently unsealed court records and Paul Bilzerian.

Ignite had made a brief and unsuccessful play for a share of the legal cannabis market in both the United States and Canada before public filings revealed the firm was hemorrhaging cash in ways that a later lawsuit alleged were suspicious.

The business made headlines in the summer of 2020 when mandatory public filings revealed the company had lost nearly $50 million, nearly half of which the company reported spending on “marketing and promotion.”

Dan Bilzerian has defended his company’s record, comparing Ignite to big companies such as Uber that posted big losses.

https://platform.twitter.com/embed/Tweet.html?creatorScreenName=MJBizDaily&dnt=false&embedId=twitter-widget-0&features=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&frame=false&hideCard=false&hideThread=false&id=1316381783013781504&lang=en&origin=https%3A%2F%2Fmjbizdaily.com%2Fwhy-are-the-feds-after-dan-bilzerians-onetime-marijuana-company%2F&sessionId=0c8c5ce682717574e13ef47a0500ba1e8ec14011&siteScreenName=MJBizDaily&theme=light&widgetsVersion=1c23387b1f70c%3A1664388199485&width=550px
But according to an ongoing wrongful-termination lawsuit filed in June 2020 by Curtis Heffernan, a former Procter & Gamble executive who briefly served as Ignite’s acting president, it was Ignite company cash that funded Bilzerian’s opulent lifestyle of constant yacht vacations to exotic locales – always surrounded by women in bikinis, always carefully documented for Bilzerian’s tens of millions of social-media followers.

On May 20, SEC investigators served Ignite with a grand jury subpoena as part of an investigation into “a potential accounting fraud,” according to documents first unsealed Aug. 29.

“SEC staff has uncovered information that indicates that (Ignite) may have filed public financial statements that include false or misleading representations regarding revenues earned and recognized in the company’s fiscal year ending December 31, 2020,” the agency wrote in a filing.

After Ignite filed motions on Sept. 28 to delay the subpoenas, a federal judge ordered the company to comply with the subpoena and cough up documents, which it did, Paul Bilzerian said.

In its filings, the SEC mentioned that Ignite had sought to delay the agency’s subpoena while a separate criminal investigation by the Justice Department wound its course.

As for what those federal officials want, that’s anyone’s guess, Paul Bilzerian said.

“Nobody knows what the DOJ is looking at,” he said. “They don’t tell you and you don’t know.”

The Justice Department did not reply to an MJBizDaily request for comment.

An SEC spokesperson said via email only that the agency had no comment beyond public filings.

Heffernan’s lawsuit alleges that Ignite accountants flagged almost $850,000 in company expenses as more closely resembling a slush fund that served as Dan Bilzerian’s allowance for luxury spending.

Among other expenses, Bilzerian spent $50,000 on a bed frame and a half-million on a yacht rental, the lawsuit alleged. That lawsuit is still pending. Full Story

In categories:Celebrities Legal
Next Post

The reality of legal weed in California: Huge illegal grows, violence, worker exploitation and deaths

At sunset from atop Haystack Butte, the desert floor below shimmers with a thousand lights. Illegal cannabis farms. At this hour and distance, serene hues cloak the rugged enclave of Mount Shasta Vista, a tense collective of seasonal camps guarded…
Read
Previous Post

Chelsea Handler Partners with Stony Soda Company Leisuretown

Cannanbis beverages are all the rage. Female celebrities like Gwyneth Paltrow, Rosario Dawson, Kate Hudson and Chelsea Handler love them. They've all endorsed Cann.  Now, Handler is making her own move, linking up with Leisuretown, another Califiornia company that's manufacturing stony sodas, in a "strategic…
Read
Random Post

Washington Governor Signs Interstate Marijuana Commerce Bill Into Law

The governor of Washington State has signed a bill to allow interstate marijuana commerce, pending a federal policy change. The legislation from Sen. Ann Rivers (R) cleared the legislature last month, and Gov. Jay Inslee (D) signed it into law on…
Read
Random Post

Why This Cannabis Capital Conference In Chicago Is A Must-Attend In Fall

In a highly anticipated move that's sending ripples through the cannabis industry, the Benzinga Cannabis Capital Conference is set to return to Chicago on September 27-28, following its spectacularly successful April event in Miami. This flagship event has steadily grown in reputation and influence,…
Read
Random Post

Maryland's Adult-Use Cannabis Rollout Heralded as Model Success

Unlike the myriad of challenges operators in New York face, new applicants in Maryland are stepping into a distinctively encouraging environment as the state gears up to expand its already-successful adult-use market. The state is set to open its first application round…
Read
Random Post

Church of Cannabis claims religious rights in city dispute to remove sculpture

DENVER (KDVR) — The City of Denver and the International Church of Cannabis are in a heated dispute over a sculpture in front of the church. The city claims the sculpture is unsafe and hazardous to drivers and has ordered…
Read