Securities Lawsuit Claims Miami Company Cheated Cannabis Oil Investor on Deal Involving TV Home Shopping
Within the first year, the defendant says sales were expected to exceed $12 million and could go as high as $30 million.
May 18, 2020 at 02:14 PM
4 minute read
Sometimes a deal is just too good to be true.
That's what Aaron Silberman and his investment company, AMJ Misil AB, claimed they learned —to the tune of $450,000—in a lawsuit alleging a Miami-Dade County company lied to them about a new cannabidiol oil, or CBD product.
The complaint before the United States District Court for the Southern District of Florida states the defendants, Premier Beauty and Health and Jorge and Florencia Hane, made several misleading claims to defraud Silberman and AMJ, which resulted in the sale of unregistered securities.
Cannabidiol is a chemical component of the marijuana plant without tetrahydrocannabinol or THC, which is the substance that produces the marijuana "high." CBD oil is incorporated in a variety of products, such as CBD-infused ricotta-and-honey toast, topical gels for application to sore spots on the body, and as an elixir to treat nearly any other type of physical or mental condition, including anxiety and depression.
Silberman alleges the defendants' falsehoods start with the claim that the CBD oil product Premier Beauty sells has a unique chemical formula created by a Harvard University and Yale University-trained medical doctor. Premier Beauty's product was later found to be sourced from another company, according to the complaint.
Silberman also alleges that Premier Beauty falsely claimed that it had secured exclusive rights to be the first and only company to market and sell CBD products on TV home shopping networks. Those appearances would be directed and managed by Jorge Hane, who has a self-described "lofty status" in the industry, the suit claimed.
The complaint alleges that plaintiffs were told that Jorge Hane's extensive experience in marketing and selling consumer products in infomercials and TV home shopping networks would have significant implications on the return on Silberman's investment.
Plaintiffs also allege that Hane represented that the product would be sold with a unique payment arrangement and the dollar amount of sales that would be achieved. According to the plaintiffs, Hane claimed his special agreement with the TV network ShopHQ guaranteed purchase order payments, rather than working on ShopHQ's usual consignment basis.
The first purchase order would occur in September 2019 and Premier Beauty's first appearance on the network was scheduled for one month later. Within the first year, sales would exceed $12 million and could go as high as $30 million.
Sales of CBD oil have once again spiked, this time due to the emergence of the coronavirus, according to Brightfield Group. This market research company says it is unclear whether the public is stockpiling products with CBD oil or increased sales are an indicator of future use.
Lawyers for Premier Beauty did not return requests for comment.
Alexander C. Flint, an attorney at G&F Law Group in North Miami Beach, represents the plaintiffs.
"Based on certain media reports, we have reason to believe that Hane was the subject of an investigation from the Colombian government, resulting in the imposition of a seven-figure fine in February of 2016 for making false and misleading claims relating to weight lost products sold on television," he claimed.
According to a 2016 press release by the Colombian government's Office for Consumer Protection of the Superintendence of Industry and Commerce, a fine in the amount of more than 700 million Colombian pesos, or about $180,000, was imposed on "Jorge Hane Laboratories Colombia" for distribution of a weight loss drug known as "Jorge Hane Redu Fat Fast."
The plaintiffs allege the Florida dispute is the latest incident involving the defendants.
"Hane appears to have transitioned to making false and misleading claims about consumer products to private investors," Flint said. "Our firm represents one such investor, and we are prepared to demonstrate Hane's apparent pattern of making false and misleading claims to consumers and investors alike as part of our continued effort to recover our client's investment in Hane's latest scheme."
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