Two executives from New York hemp firm CanaFarma Hemp Products Corp. are accused of stealing at least $4 million from the company in the latest legal challenge to face the embattled CBD manufacturer.
A federal lawsuit filed last week accuses CanaFarma executives Vitaly Fargesen and Igor Palatnik of lying to investors and promising to create consumer goods from company-grown hemp.
The lawsuit claims that while the company grew hemp at two farms in New York in 2019 and 2020, none of it was processed.
The pair also faces securities and wire fraud charges filed last fall by the U.S. Securities and Exchange Commission.
The SEC says that Fargesen and Palatnik gave investors baseless revenue projections and pretended to process hemp from their own farm when, in fact, they were making products from hemp supplied by third parties.
That case has not been settled, according to Law 360, which first reported last week’s investor lawsuit.