Former Cannabis CEO Charged With Multiple Counts Of Fraud

Brian Mitchell, the former CEO of Shryne Group, the California-based marijuana holding company and multistate operator behind the popular STIIZY and Honeyleaf brands, was charged in Alameda County last week with multiple fraud felonies related to a different business. Mitchell – who recently stepped down as CEO “for personal reasons unrelated to Shryne,” the organization stated in a press release – was charged with six counts of felony insurance fraud, one felony count of conspiracy to commit a crime, and two counts of workers’ compensation fraud, according to the Bay Area News Group. The charges stem from his time at the head of Signature Painting and Construction, Inc. Mitchell co-founded Signature with Eric Oller, who is facing similar charges.

Authorities also charged Yama Sekander – owner of Concord, California-based firm A-1 World Class Painting – with one count of felony workers’ compensation fraud. According to reports, the scheme allegedly used A-1 World Class Painting as a front to pay Signature’s workers from 2017-18 and subvert workers’ compensation insurance costs. The individuals were arraigned last Monday, September 20, in Alameda County court where they all pleaded not guilty.

Per Ganjapreneur, “Prosecutors alleged that the trio misclassified the roles of their employees and the riskiness of the work as to pay lower insurance premiums.” All in all, experts estimate that the involved insurance carriers lost approximately $5 million through the ordeal. Nancy O’ Malley, Alameda County District Attorney, said, “If a business creates an environment where they falsely pay a lower insurance premium, that company has an unfair competitive advantage over one that is law-abiding.”

Amidst Mitchell’s troubles with the law, Shryne Group announced it had appointed Jon Avidor, formerly Shryne’s President and Interim Chief Financial Officer, as the new CEO. The company’s Corporate Communication Director Audie Vergara gave a statement saying, “As Brian’s personal issues are not related to the Shryne Group, there isn’t much more to share on that front.” She continued, “I can share that we are all excited about the look ahead. Jon is an experienced business executive and lawyer with a long history of navigating complicated, dynamic business development. He is the perfect leader for Shryne Group as we deepen our position in the California marketplace and beyond.” Although crime never pays, it’s great to see that the company was able to bounce back and put the right person in the position to lead during such a fiasco.