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HEMP Smoked!

The "King of Pot", His Buddy and His Brother Get Caught Making Off With the Goods

June 22, 2016:  One of the biggest and longest continuously run scams on the OTC was delivered a serious blow following the SEC's filing of civil charges against the principals behind HEMP, Inc. (HEMP) as well as the company itself.

Bruce Perlowin
Although it never really claimed to be involved in the consumable marijuana industry, HEMP nonetheless rode the coattails of the frenzy for marijuana-related stocks, largely in part to its CEO's infamy. Bruce Perlowin, the self-professed King of Pot, ran the share selling scheme with his lieutenants, forever evangelizing Born Again Christian Barry Epling, and Jed Perlowin, Bruce's brother. Interest in the stock was maintained by active message boards and HEMP's penchant for daily re-releasing of news unrelated to the company, but as if it did actually have something to do HEMP's operations

According to the complaint, Bruce Perlowin and Epling conceived a scheme in which hundreds of millions of unregistered shares of HEMP would be sold into the public market. Epling and Jed Perlowin received enormous quantities of stock at various times through companies they controlled, sometimes per consulting agreements and at other times as gifts in recognition of “affection and appreciation for over 20 years of friendship and loyal assistance.”. These co-conspirators would then sell those shares and kick back a significant portion of the proceeds to Bruce Perlowin.  In order to facilitate the selling of the ill-gotten HEMP shares, Bruce, Epling and, Jed Perlowin made false written statements to Alpine Securities and Scottsdale Capital regarding the circumstances under which the shares had been obtained and the restrictions on those shares.

Extensive Travelling Is One Way That Barry Epling
and His Clan Enjoy The Spoils of the HEMP Scam
While Epling and Jed both reportedly realized millions of dollars in illicit profits, sources state that Bruce and his former KGB spy wife, Svetlana Ogorodnikov, were by far the scheme's biggest beneficiaries. Nevertheless, Epling, who reportedly was practically insolvent immediately prior to the scheme, managed to significantly upgrade his lifestyle over the last couple of years, buying an impressive new home, as well as take his family on exotic round-the-world trips, and purchase fancy new cars, directly from the spoils realized from his sale of HEMP shares.

Epling, for all of his pious activity, apparently does not see stealing from others as a sin. Together with Bruce Perlowin, Barry has already set up Bioadaptives, Inc. (BDPT) to be his next self-enrichment vehicle. Following the formation of the public company, which three years later still has no operations, Barry relinquished his role of President to his brother Gerald, presumably to concentrate on his full time job of selling HEMP shares and travelling the world.  Reportedly, Gerald became disenfranchised with BDPT's real purpose and left his post in short order, which was then reassumed by Barry.  He has since been able to pawn off the Presidency of BDPT to one Christopher Hall.

Bruce Perlowin, who was profiled in CNBC's documentary, Marijuana, Inc., was at one time the largest smuggler of pot into the western United States.  The story of his years bringing millions of pounds of the drug on fishing trawlers under the Golden Gate Bridge and into San Francisco Harbor is documented in the book "The Golden Gate Smuggling Company", which was written by a member of Perlowin's crew of seamen. For his travails, Perlowin served nine years in a federal prison.

Jed Perlowin
In July 2014, when the OTC markets were up in arms over the CYNK Technology Corp. fiasco (CYNK), we grumbled over the singular focus on that particular scam. Although CYNK was a watershed moment in the revelation and apprehension of a group of prominent penny stock fraud artists, we pointed out that there were so many other, longer term scams ongoing and used HEMP's penchant for running all night printing presses to churn out stock certificates as an example.

  » Editorial: What Nobody Has Said About the CYNK Fiasco

HEMP's scheme to defraud was greatly benefited by the antics of those behind the Money Runners Group promotion network. In 2014, Mikhail Galas, Alexander Hawatmeh, Christopher Mrowca, and Tony Pustovit were charged by the SEC for purchasing cheap shares of HEMP and GrowLife, Inc. (PHOT)--which was subsequently suspended for trading by the SEC--and raising the share prices through a series of manipulative trades.  Those shares were then sold during a series of promotions, including one which increased HEMP's share price by over 800%. Criminal charges were concurrently filed by the U.S. District Attorney against Galas, Hawatmeh and Mrowca following an investigation by the FBI.

Those who bought and held onto shares of HEMP during the Money Runners promotions were treated to a one for ten reverse split, significantly reducing their holdings while Bruce continued to print new certificates for sale by him and his cohorts.

It seems more than a coincidence that Bruce had a significant presence and shareholdings in PHOT. While there were no indications of culpability on the Perlowins' or Epling's part in the Money Runners' scheme, it is difficult to imagine that they did not reap the benefits by selling much of their holdings at that time. Conversely, it is not hard to imagine that these new charges could be the result of the cooperation of those behind Money Runners. If that is the case, then we can expect criminal charges against the Perlowins and Epling to soon follow the SEC's civil charges.

Not surprisingly, news of the charges created a frenzy of selling as those shareholders who had suddenly reached the epiphany that they had been had, rushed for the exits. Many of the sellers were legitimately concerned that trading in the stock could be suspended as soon as Thursday morning. Wednesday's trading volume saw an increase of 1,200% over the average daily volume of the last three months. Shares of HEMP closed down 40% to $.024 having recovered from the day's low of $.018. Nobody but the those with the sunniest of dispositions believes that this stock is going anywhere but quickly towards zero.