Debra Borchardt
An investor is looking to recoup funds from the fraudulent 420 Real Estate scheme by taking the company to court.
The case, which dates back to 2017, involves Willard Jackson, Robert Shumake Jr., Nicole Birch, and Vincent Petrescu. The companies in the scheme were:
- 420 Real Estate LLC., a Texas limited liability company doing business in the state of California
- TruCrowd Inc., which was doing business as Fundanna
- Transatlantic Real Estate
- Bangi Inc., a Nevada corporation doing business in the state of California.
Original SEC Complaint
As Green Market Report reported in 2021, the SEC complaint stated that Shumake, alongside associates Birch and Jackson, conducted fraudulent and unregistered crowdfunding offerings through two cannabis and hemp companies, Transatlantic Real Estate and 420 Real Estate.
The complaint alleged that Shumake and Birch raised $1,020,100 from retail investors through Transatlantic Real Estate, while Shumake and Jackson raised $888,180 through 420 Real Estate. The three individuals then allegedly diverted investor funds for personal use rather than using them for the purposes disclosed to investors.
Birch, who was the CEO of Transatlantic Real Estate and Bangi, allegedly facilitated the payment of money from the Transatlantic Real Estate offering to herself and H.B. Associates. Bangi was a publicly traded company that supposedly specialized in the acquisition and leasing of properties that support the cannabis industry. Its common stock traded in the over-the-counter market under the symbol BNGI.
The investor complaint also noted that, in December 2021, Birch consented to be permanently restrained and enjoined from violating securities laws without admitting or denying the SEC’s allegations. She was also found liable for a disgorgement of $600,000 and a $200,000 civil penalty, according to the final judgment. Birch was also suspended from appearing or practicing before the commission as an attorney.
Jackson, who was the CEO of 420 Real Estate, is accused of diverting funds from the 420 Real Estate offering to the Jackson Entities. In January 2022, the company and Jackson consented to a permanent ban on violating certain securities laws, without admitting or denying the SEC’s allegations.
In December 2021, TruCrowd agreed to pay roughly $226,000 in disgorgement, interest, and penalties to tie up claims that it ignored red flags about Shumake and the companies. Petrescu agreed to pay a $9,700 fine to escape the case as well. Neither he nor TruCrowd admitted or denied the SEC’s allegations. The SEC also ordered the suspension of Petrescu from appearing or practicing before the commission as an accountant.
New Complaint
Jeffrey Carter and 20 other unidentified plaintiffs filed a complaint on Dec. 28, 2023. He and the other investors contributed more than $1 million to the real estate scheme. The complaint restates the SEC’s allegations and asks the court for civil penalties, disgorgement, damages, attorney fees, and a jury trial.
TruCrowd still exists online and lists Petrescu as a member of the team. The site continues to raise funds for a variety of small startups. Bangi no longer trades in the OTC market.
1781000-1781110-https-ecf-caed-uscourts-gov-doc1-033114163027
