A San Francisco resident is accusing a group of promoters of fraudulently soliciting her investment in a cannabis cultivation venture. Krista Lee filed the complaint against David Kang, Miguel Rodriguez, Nick Tershay, and Alex Aquino in the Superior Court of California, County of San Francisco on September 16, 2024.
According to the court documents, Lee alleges that around March 2018, the defendants misrepresented their experience and resources in the cannabis industry to secure her $1.5 million investment in Fourth Pillar Inc., a company purportedly involved in cannabis cultivation and distribution. The defendants claimed they had extensive expertise and connections within the industry, including an agreement with Cookies—a renowned cannabis brand—to cultivate and distribute their products. They also assured Lee that necessary permits were either obtained or in process and that construction at their Sacramento facility was well underway.
Lee asserts that these representations were false. Despite assurances from the defendants about the progress of the business and impending profits, she discovered that no significant investments or genuine business efforts were made by them. The company's financial records were incomplete and disorganized, making it difficult for her to track how her funds were used. She found out later that much of her investment was diverted for personal use by the defendants.
The complaint details several instances where funds were misappropriated. For example, shortly after receiving Lee's investment, David Kang paid himself $50,000 as "loan repayments" without disclosing any prior loan agreements to Lee. He also paid himself substantial sums under dubious "consulting fees," even when the company was low on cash. Additionally, large amounts were spent on rent for a property owned by an LLC in which some defendants had stakes; this property remained undeveloped for its intended purpose but was used for other ventures.
Lee further alleges that payments were made to unknown vendors without proper documentation or justification for their services related to Fourth Pillar Inc.'s operations. These included transactions with entities like Livin Phat and Wayne Consulting, raising suspicions about their legitimacy.
Believing these fraudulent claims led Lee to invest $1.5 million and subscribe to 2 million shares in Fourth Pillar Inc., which she would not have done had she known the true state of affairs. She is now seeking general damages according to proof, exemplary damages deemed reasonable by the court, costs incurred during this action, and any other relief deemed just.
Representing Krista Lee are attorneys Pete Ryan and Alexander Del Curto from Fox Rothschild LLP. The case is being heard under Case No. CGC-24-618129 at the Superior Court of California in San Francisco County.