Operators Of Marijuana Hydroponics Firm Imprisoned For Securities Fraud

DENVER (CBS4) -- Two Colorado men and another from the Dominican Republic were sentenced to federal prison terms for their roles in a securities fraud conspiracy that cost investors more than $10 million.

Guy N. Jean-Pierre, 60, Williams Sears, 53, and Scott Dittman, 50, were sentenced last week in U.S. District Court in Denver. Sears is a Thornton resident and Dittman is from Franktown.

The trio set up a company in 2010 that retrofitted steel shipping containers so that plants could be grown inside them with the use of hydroponics. Hydroponics is a soil-less, water-dependent form of agriculture. In its later years, the company's "pharma pods" attracted business from marijuana growers seeking to cash in on the state's new cannabis industry.

Colorado voters approved the legalization of marijuana in November 2012. Commercial sales of product began January 1, 2014.

The Securities and Exchange Commission leveled charges against FusionPharma Inc.'s founders in September of 2016.

Sears was sentenced to a total of eight years in prison for his role in the conspiracy, as well as for tax violations. The SEC claimed Sears, who already had a securities-related felony conviction, controlled the business behind the scene through his brother-in-law, Dittman. The pair, with the help of Jean-Pierre, a lawyer, fraudulently organized the company, falsified documents about Sears's involvement, and fraudulently permitted unrestricted shares of FusionPharma to be sold on the open market.

Many of FusionPharma's financial statements awere also falsified, per prosecutors.

Dittman received five years in prison.

Jean-Pierre, convicted of securities fraud, mail fraud, wire fraud, money laundering, and conspiracy, was handed a seven-year sentence.

In addition to the sentences, United States District Court Judge William A. Martinez previously entered preliminary orders of forfeiture in the amount of $12,204,172, based on proceeds and assets the defendants obtained from the scheme.

"Justice has finally come for the victims of this scheme," said United States Attorney Jason Dunn. "Prosecuting a complex financial scheme like this is challenging and lengthy, but it is critical that the public have confidence in the markets and that those who commit securities fraud be dealt with harshly."

The case was investigated by the FBI, IRS – Criminal Investigation, and United States Postal Inspection Service, and prosecuted by Assistant United States Attorneys Jeremy Sibert and Robert Brown.