Feds seize $9 million from Commerce City-based Fusion Pharm owners

The owners of Fusion Pharm are accused of defrauding investors of the company. One man has already pleaded guilty.

Marijuana at Verde Natural's grow facility. (Kevin J. Beaty/Denverite)marijuana; pot; weed; verde natural; tommy chong; grow; agriculture; kevinjbeaty; denver; denverite; colorado;
Marijuana at Verde Natural's grow facility. (Kevin J. Beaty/Denverite) marijuana; pot; weed; verde natural; tommy chong; grow; agriculture; kevinjbeaty; denver; denverite; colorado;
Marijuana at Verde Natural’s grow facility. (Kevin J. Beaty/Denverite)

One of the owners of Fusion Pharm Inc., a business that retrofitted steel shipping containers for marijuana growing, pleaded guilty this month to stealing millions from investors.

Thornton resident William Sears, 50, and his brother-in-law Scott Dittman, 47, formerly of Elizabeth, were charged in September with conspiracy to defraud the United States. Sears is scheduled to be sentenced April 25, 2017, after pleading guilty to the charges Nov. 14.

Dittman is also expected to plead guilty to the charges, but he has not scheduled a change of plea hearing yet, according to the U.S. Department of Justice.

Fusion Pharm Inc. was a Nevada corporation that mainly operated out of Denver and later Commerce City.

Sears misled investors to believe the revenue coming from illegally selling stocks was actually coming from Fusion Pharms’ sales of containers called PharmPods. This tricked investors into thinking the company was performing better than it really was and stock prices in Fusion Pharm accordingly increased, according to the U.S. Securities and Exchange Commission.

Sears and Dittman raked in the added revenue by creating fraudulent corporate documents that let Fusion Pharm issue common stock to three other companies controlled by Sears. These companies illegally sold the restricted stock into the market for $12.2 million in profits while hiding the companies’ connection to Fusion Pharm.  Sears transferred some of his illegal proceeds back to Fusion Pharm so the money could be falsely reported as revenue.

The United States has seized approximately $9 million that is allegedly traceable to criminal conduct. On Tuesday, the DOJ launched a website for the victims of Fusion Pharm’s fraud.

Adrian D. Garcia

Author: Adrian D. Garcia

Adrian D. Garcia covers business and trends for Denverite. He's covered business for The Fort Collins Coloradoan and serves as treasurer for the Colorado chapter of the Society of Professional Journalists.