Former Cannabiz Boss Pleads Guilty To Securities Fraud, Sentencing Set For July

Former Cannabiz Mobile LGBI owner Christopher Esposito pled guilty on April 12 to fraud, according to the U.S. Attorney's Office, District of Massachusetts.

What Happened: Esposito participated in a pump-and-dump scheme around a decade ago with at least one other co-conspirator, selling 1.3 million shares of unlawfully obtained stock in Cannabiz. He failed to register the deal with the U.S. Securities Exchange Commission.

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Esposito then rebranded the company under the name Lion Gold Brazil Inc. in 2014 and conducted an illicit promotional campaign to artificially inflate the stock value.

The Massachusetts resident faced charges last year and has now pled guilty to one count of securities fraud, per a press release.

Esposito and Anthony Jay Pignatello, Esposito's partner, allegedly used promissory notes that were backdated in order to unlawfully obtain shares of the company. They also purportedly placed a puppet executive in the role of president and CEO, although this individual "reported to Esposito.”

What's Next: Pignatello has already entered a guilty plea in connection with the case and is awaiting sentencing in September of this year.

U.S. District Court Judge Patti Saris scheduled Esposito's sentencing for July 26, 2023. Esposito was charged in August 2022.

The charges against him carry a potential prison sentence of up to two decades, as well as a $5 million fine and three years of supervised release.

Following a plea deal, the prosecution has recommended a lower sentence for Esposito, along with restitution of $62,000 and forfeiture of approximately $20,000, per Law 360.

This case serves as a reminder of the importance of transparency and adherence to regulations in the cannabis industry.

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Image Credits: JRByron, WilliamCho by Pixabay Edited By Benzinga