Licensed hemp growers claim a group of individuals stole their products by creating a convincing, but “phony,” company selling commercial cannabis products.
Joel Funk and Twin Circle Farm LLC filed the complaint on Sept. 2 in the Madison County Circuit Court against Benton Elliott, Michael Castro, Delta Spectrum CBD LLC, Todd Sears, Aaron Boyle, Tony Arro, Buddy Sears and Tim Strathman.
The suit was filed through attorney Thomas Maag of Maag Law Firm LLC in Wood River.
According to the complaint, the plaintiffs are farmers and hold hemp growing licenses. They grow hemp for processing into legal products. The defendants purported to buy and process hemp into commercially legal products, such as CBD oil.
The plaintiffs allege the defendants “concocted a scheme to manufacture and distribute CBD products, which are made from marijuana, but are generally legal.”
The defendants allegedly used “fake, pleasant appearing websites” to form a “dummy business” and appear legitimate, including “phony” letterheads and documents.
“However, defendants lacked the source products (i.e. the marijuana) in sufficient quantities for their business operations,” the suit states.
“To remedy this problem, defendants set about on an agreement among themselves in which they acquire the raw material for their product to sell without the inconvenient and expensive problem of actually paying for it,” it adds.
Specifically, the suit states that in October 2020, the plaintiffs notified the defendants that they had several thousand pounds of dried legal hemp ready for shipment. Twin Circle Farm allegedly had 2,000 pounds ready, and Funk had 1,000 pounds ready.
The defendants allegedly advised that they would send a truck from Chicago to pick up the product. After the hemp was analyzed for compliance, the defendants promised to send payment in roughly a week. They sent a truck with the label Miracle Mile Transportation Inc. on Oct. 23, 2020. The transportation company was at one time based in Iuka, Ill.
The driver, whose name is unknown, allegedly produced a Bill of Lading showing he would pick up 3,000 pounds of hemp and deliver the product to 83-995 Avenue 66 in Thermal, Calif.
“In truth and in fact, Miracle Mile Transportation Inc., a former Illinois corporation, was, per Illinois Secretary of State records, involuntarily dissolved on January 14, 2011, about 10 years earlier, and had a similar, but different name than a California based company, who is not believed to have been involved in this case,” the suit states.
Additionally, while the address in Thermal, Calif., is a warehouse, it is currently empty and available for rent.
The plaintiffs argue that instead of shipping their product to California, the defendants shipped to 204 S. Main St. in Archie, Mo., just south of Kansas City, “wherein defendants operate a facility that was and is being used to process plaintiffs’ stolen product, into CBD and other products for sale
“In order to hide from plaintiffs, formed a new company, or at least operated under a different name, Energy Curve Technology, which, on its web site, claims to have ‘deep roots,’ unfortunately, they are deep roots into plaintiffs’ farms,” the suit states.
The plaintiffs allege the scheme was fraudulent and intended to deceive them into believing the defendants were a legitimate business and would promptly pay their invoice.
As a result, Funk allegedly lost more than $100,000 and Twin Circle Farm allegedly lost in excess of $200,000.
“That the conduct of defendants constitutes common law fraud, and thus, goes beyond mere breach of contract, and instead, constitutes a tort, for which punitive damages are appropriate,” the suit states.
Madison County Circuit Court case number 21-L-1071