CLEVELAND, Ohio — An Avon man is one of two people accused of running a marijuana business that swindled investors out of some $14 million, according to a lawsuit filed by the Securities and Exchange Commission.
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Pure Organic Entities’ chief operating officer, Sean K. Williams of Avon, and the company’s founder, Kris Swaffer, of Cadillac, Michigan, misappropriated investor funds during a four-year span, the lawsuit said. Swaffer used the cash to repay old debts, pay for home renovations, cars and boats and to pay for his wife’s personal expenses, like groceries and clothes, the filing said.
In its filing earlier this month in federal court in Cleveland, the SEC said it’s seeking a judge’s order to permanently stop the company from conducting business and to fine the company, Williams, 51, and Swaffer, 60.
Cleveland.com reached out to Williams’ attorney, Edmond Searby, and Swaffer for comment.
No criminal charges have been filed, but the lawsuit says the duo violated federal law. Two lawsuits have been filed by investors seeking to recoup their money.
The SEC said the men took money from at least 75 investors from 14 states for an international marijuana business from September 2016 through February 2020. The business, registered in Dallas in 2018, sought to grow marijuana and sell it commercially.
Swaffer failed in attempts to get licensed to grow marijuana legally in Texas and Michigan, but obtained a license to operate in the European country of North Macedonia.
Williams initially invested in the company, and he was later made chief operating officer and put in charge of recruiting investors, according to the SEC. He previously worked in logistics for a trucking company, the filing said.
Swaffer misrepresented himself to investors as a savvy businessman with a handle on the complicated legal marijuana business. In reality, he lost his car dealership in 2013, had been sued for failing to pay hundreds of thousands of dollars in unpaid loans and lost his home through foreclosure, according to court records.
Swaffer owed some $800,000 when he first started the company and used the first $81,000 he raised to pay down the debt, according to the filing.
Williams, according to the filing, received “hundreds of thousands” of dollars in investor money outside of his work for the company, including $160,000 in investor funds in August and October 2018.
The duo also never filed required registration with the SEC, a violation of federal law, according to the agency.
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