The Securities and Exchange Commission (SEC) has charged a company with fraud for researching, producing, and distributing psilocybin (Magic) mushrooms and making illegal financial gains in the process.
The company Minerco Inc., the founders Bobby Shumake Japhia, and Julius Makiri Jenge have all been included in the regulators’ charges for their part in a pump-and-dump scheme that defrauded investors out of approximately $8 million while generating millions of dollars in ill-gotten proceeds from sales of the company stock.
SEC charges Magic Mushroom research company and founders
Charges were filed against Minerco and the two aforementioned senior role holders in the District Court for the District of Columbia. They stand accused of violating the antifraud provisions of “Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.”
The charges allege that in late 2019, Bobby Shumake Japhia, who used the alias Robert Samuel Shumake, Jr., gained considerable stock in Minerco. Shumake arranged for Julius Makiri Jenge to take control of the penny stock company.
The pair would then seek investors and market the company as a research and development company that focused on the impact of plant-based hallucinogens contained in psilocybin mushrooms. According to the SEC report, they reportedly publicized themselves as the “first publicly traded company focused on the research, production, and distribution of psilocybin mushrooms.”
The pair (Shumake and Jenge) continued falsely parading the company and the stock for another two years. They made public statements and disclosures that contained false and misleading information.
These included press releases that, according to the SEC report, “falsely suggested that an independent third party had valued Minerco at $1 billion and that Minerco had partnered with a Jamaican company that would lend expertise in growing a unique strain of psilocybin and bequeath to Minerco its Jamaican cannabis licenses.”
Shumake allegedly used an offshore entity to transfer at least $3.4 million in ill-gotten gains to another entity he controlled after dumping millions of Minerco shares.
“As alleged here, pump-and-dumps often begin when cheap stock of dormant companies is suddenly touted by a promoter as the next big thing,” said Melissa Hodgman, Associate Director of the Division of Enforcement.
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