Crime Global Law News

How A Russian Tycoon’s $165 Million U.S. Cannabis Bet Went Up In Smoke

Genius Fund’s billionaire owner Dmitry Bosov was found dead, in an apparent suicide, on May 6.

When the authorities in Plumas County, California, inspected a new commercial hemp plantation in April 2019, they were so alarmed by what they found that they sought to impose a temporary moratorium on the emerging industry in unincorporated local towns.

Greeted at the property by two armed guards with false identification papers, the local authorities found “one of, if not the largest, hemp operation in the state of California” with trees cut down and carted away, greenhouses going up and drainage being built without permits, they said at a public hearing two months later.

Representatives of Genius Fund, the cannabis-focused start-up based in Los Angeles that was developing the roughly 1,000-acre spot — the size of about 750 American football fields — told Plumas authorities they were cooperating with two research universities, tapping a California legal loophole that would allow them to begin operations without all the permitting. However, Plumas officials said they contacted the universities and neither confirmed a relationship with the company. Shortly thereafter, Genius Fund left the county.

“It demonstrates a flagrant disregard for our county, our rules, our regulations, our building codes,” then Plumas County Sheriff Greg Hagwood told the June 4, 2019 hearing. “To engage in something this flagrant speaks to a frame of mind. And I find it very disturbing and I find it unacceptable.”

It was just the start of the troubles Genius Fund would face over the next 12 months as it aggressively sought to carve out a chunk of the multibillion-dollar California cannabis market. Today, the phones at the company are silent, corporate e-mails bounce, the company’s website is down, and counterparties are starting to sue.

Genius Fund might have been just another failed and forgotten cannabis business — the ranks of which are growing as the COVID-19 pandemic impacts operations — had a former senior employee not filed an eye-opening lawsuit in a California court on April 24 claiming its billionaire owner, Dmitry Bosov — who died weeks later in what Russian authorities said was a suspected suicide — had blown $165 million on the operation without generating much revenue.

The lawsuit goes on to claim that Bosov had his U.S. visa rescinded in the midst of launching the vertically integrated business and, as it imploded a year later, transferred ownership in March to his Soviet-born, New Jersey-based friend and adviser — a man with an opaque employment history who goes by multiple names and who, in 2018, was caught up in a bizarre international chess scandal involving a longtime Russian regional leader who is under U.S. sanctions and once claimed to have been abducted by space aliens.

Bosov and adviser Igor Shinder, the lawsuit alleges, had created a Byzantine corporate structure with more than 60 “sub-entities” at its height and were now transferring assets and selling off assets to avoid creditors, a claim the defendants rejected.

The list of people involved with the fund has included a managing partner whose father is a former Russian cabinet minister now jailed and awaiting trial on an embezzlement charge, two new board members who are partners of a former FBI director, a U.S. Army Special Forces veteran, and several young tech executives with little to no experience in cannabis or running large businesses.

Bosov, 52, was found dead May 6 at his sprawling mansion outside Moscow with a bullet wound to the head from his own pistol, law enforcement authorities said — reportedly after locking himself in the fitness room. He was the beneficial owner of the Genius Fund, according to documents submitted as part of the civil complaint filed by Francis Racioppi, who worked at the company for about a year, including briefly serving as CEO.

Daniil Abyzov, son of billionaire former Russian Minister of Open Government Mikhail Abyzov, was one of three managing partners at Genius Fund, according to its now defunct website. However, he left the company earlier on, an employee who asked not to be named, told RFE/RL. Daniil Abyzov — also known as Danny — could not be reached by RFE/RL on a mobile phone that had been registered under his name.

To Read The Rest Of This Article By Todd Prince on Radio Free Europe

Published: May 21, 2020

SHARE
RELATED POSTS
LA’s Social Equity Program A ‘Complete Disaster,’ Says NBA Vet, Cannabis Pro Al Harrington
Omnia Nightclub Operator Says Pot Store Ripping Off Name
Youth programs left wanting by California marijuana law

Leave Your Reply

*