Four Allegedly Used Marijuana Company to Scam Investors

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By Richard Hill

Four men have been charged with manipulating the stock of a company that sought to peddle devices to detect marijuana on a person’s breath ( United States v. Messalas , E.D.N.Y., 17-m-00321, 4/10/17 ).

Three of the four allegedly planned to fraudulently tout the stock of BioCube Inc. and then sell the shares at an inflated price--a scheme known as a “pump-and-dump.” The company has had several business models since 2010, the latest being the marijuana-detection system, according to the U.S. Attorney for the Eastern District of New York. The men allegedly sought to launder approximately $2 million in illegal proceeds.

The four, all arrested April 14, were Chris Messalas, a former securities broker previously barred from the industry by the Securities and Exchange Commission; Boris Rubizhevsky, BioCube’s former chief executive officer; attorney Michael Garnick; and Dimitros Argyros, described as an “anti-money laundering consultant.” Messalas, Rubizhevsky and Garnick were charged with securities fraud conspiracy. Messalas and Argyros were charged with money laundering conspiracy.

Counsel for the accused couldn’t be identified immediately. The men face between five years and 25 years in prison if convicted on all charges.

To contact the reporter on this story: Richard Hill in Washington at rhill@bna.com

To contact the editor responsible for this story: Phyllis Diamond at pdiamond@bna.com

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