However The Firm Dug Itself A Deeper Hole When Medbox Allegedly Issued Press Releases Headlining The Phony Revenues As Record Earnings To Legitimize Itself As A Viable Commercial Operation When In Fact Nearly 90% Of The Companys Revenue In The First Quarter Of 2014 Stemmed From Sham Transactions With New-age.

For some background: the company provides marijuana consulting services and sells vending machines known as Medbox devices capable of dispensing marijuana on the basis of biometric identification. The SEC alleged that Vincent Mehdizadeh created a shell company called New-Age Investment Consulting to carry out illegal stock sales and used the proceeds from those sales colorado pot business to boost Medboxs revenue. However the firm dug itself a deeper hole when Medbox allegedly issued press releases headlining the phony revenues as record earnings to legitimize itself as a viable commercial operation when in fact nearly 90% of the companys revenue in the first quarter of 2014 stemmed from sham transactions with New-Age. Mehdizadeh allegedly acknowledged in a text message that the only thing we are really good at is public company publicity and stock awareness. We get an A+ for creating revenue off sheer will but that wont continue. Mehdizadeh also allegedly funded the purchase of his luxury home in the Pacific Palisades with proceeds from New-Ages illicit stock sales. It did not stop with Mehdizadeh. Medboxs then-CEO, Bruce Bedrick, is being charged with being complicit in the scheme and personally profiting. Mehdizadehs then-fiancee, Yocelin Legaspi, was charged as well with unlawfully selling unregistered securities. She was installed as the supposed CEO of New-Age when the company was created.

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