Millions up in smoke in cannabis scam

Investors promised great returns through a marijuana company have lost it all, as it's alleged the owner - a US film producer - spent the money on a yacht and several luxury cars.

The US Securities and Exchange Commission has filed charges against Guy Griffithe and Robert Russell for an alleged scheme that defrauded investors who thought they were buying interests in a marijuana company.

The SEC estimates the amount invested in the fictitious company amounts to approximately US $4.85 million.

Griffithe is accused of selling investors ownership interests in SMRB LLC, a Washington based company owned by Russell that had a licence to grow marijuana under the state's recreational cannabis laws.

According to the complaint, Griffithe allegedly spent approximately US $1.8 million of investor funds on personal and unrelated business expenses, including payments toward several luxury cars for himself and a yacht for Russell.

Griffithe also allegedly deposited approximately US $1.7 million into Russell's personal bank accounts.

To create the illusion that the marijuana business was profitable and paying dividends as promised, Griffithe allegedly paid out purported profit distributions to some investors.

The SEC referred to the way in which some investors were paid as a "Ponzi-like fashion".

"As alleged in our complaint, Griffithe and Russell exploited popular interest in the cannabis industry to obtain millions of dollars from investors who thought they were buying into a profitable business," said SEC associate director Melissa Hodgman.

"Instead, Griffithe and Russell deceived investors and used the money to enrich themselves."

Russell's wife, Sonja Russell, is also named in the complaint although her alleged involvement is unclear.

The SEC is seeking permanent injunctions, return of the allegedly ill-gotten gains with interest and civil penalties.

Griffithe is also president and executive producer for Bridgegate Pictures Corp. His LinkedIn says he: "Built solid track record of success leading start-ups, turnarounds and rapidly growing companies."

Bridgegate worked on Distorted starring Christina Ricci and John Cusack, Speed Kills starring John Travolta, The Humanity Bureau starring Nicholas Cage and The Recall with Wesley Snipes.

Read more: Guy GriffitheRobert Russell
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