Earlier today, February 14, in Arapahoe District Court, former marijuana entrepreneur Scott Pack was convicted of violating the Colorado Organized Crime Control Act and securities fraud and more in a case that has been described as one of the biggest of its kind in Colorado history.
Westword has been following Pack's saga since early 2017, when civil litigation was filed against him by attorney Matthew Buck on behalf of investors Pierre and Christophe Raygot. Also named was Michael Pack, father of Scott and a wealthy real estate developer based in San Diego.
In remarks to Westword shared that April, after the first suit was put forward but prior to the introduction of any criminal indictments, Scott Pack denied any wrongdoing. "We have structured our business abiding by the governing laws and regulations," he said, "and there is no reason why we would need to deceive our stakeholders, who still hold value in our company. We deny the allegations in this case, which will easily be proven false once facts and evidence are revealed in court."
Holding a different view was lawyer Henry Baskerville, who now represents the Raygots in conjunction with fellow attorney David Olsky, and authored an amended complaint in late 2017 after taking over from Buck.
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The Raygots are both foreign nationals (Pierre is from Thailand, Christophe is based in Portugal), and in a previous interview with Westword, Baskerville noted that the main events covered in the amended suit happened in 2015, when non-Colorado residents weren't allowed to put money directly into a cannabis concern here. The law was changed the following year.
"At the time, Pierre could not invest directly in a marijuana business," Baskerville told us. "So it was represented to him that the legal way he could still participate in the industry was to invest in a company that would eventually own or manage properties in which a grow would operate. But he was given some conflicting information about what the structure would be."
The suit maintains that Scott and Michael Pack formed two enterprises named SMP Properties LLC — one in Colorado, the other in Nevada — that were intertwined with Harmony & Green, the company at the center of both the criminal and civil complaints. According to Baskerville, the Colorado branch of SMP Properties "owned a facility in which a grow was operating in Denver and a facility in which a grow was operating in Colorado Springs. There were a number of times Scott represented over Facebook Messenger that they were obtaining new grows and looking for money to purchase a new facility — but it appears that those representations were not true."
In addition, Baskerville said, "it appears that the money was funneled directly into the marijuana business, and we believe it was used to repay other investors or funneled into the Packs' pockets."
There was also "some back-and-forth where Scott said they received $5 million in funding," Baskerville maintained. "And there's a long, detailed Facebook conversation where Scott said they needed a bridge loan of $400,000 because they had the opportunity to purchase a property for $1.6 million. Scott said they only needed the money for thirty to ninety days, and because they'd be getting a mid-month cash infusion of $500,000, the risk would be virtually nothing. But as far as we can tell, that was completely made up."
The accusations in the lawsuit are couched in cautious legalese. But a public apology posted on the now-defunct Harmony & Green website was far more blunt. The jeremiad maintained that after dad Michael paid for his son's bail and attorney's fees, Scott flew to Miami with Janette Pack, his significant other. Photos of the two showed them cavorting on the beach or canoodling outside "their $5K a month Harmony and Green 'office' in Cherry Creek." We've included two of the shots here.
For all of this, the page's anonymous author wrote: "We are sorry. You deserved better. You were played. So were we."
The criminal probe into the matter began in August 2016, and the following June, Pack and nineteen others were indicted — and law enforcement found what the 18th Judicial District DA's office characterizes as "an illegal marijuana operation at a site in Elizabeth. Investigators discovered 845 marijuana plants weighing 2,535 pounds worth more than $5 million."
The office adds: "That was the beginning of an investigation that uncovered a major drug trafficking organization that was involved in illegally cultivating, processing and distributing marijuana and marijuana products to at least five states. The DTO [drug-traffickoing organization] produced well over 300 pounds of marijuana each month at sites in Denver, Elizabeth and Colorado Springs. The distribution was arranged and executed throughout Arapahoe, Douglas and Elbert counties, and other locations along the Front Range."
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Prosecutors maintain that Pack was "at the top of the drug enterprise" and "played a pivotal role, taking the proceeds of black market marijuana as well as soliciting investors to back the enterprise through fraudulent statements and empty promises.... Pack and various associations scammed investors out of millions of dollars while Harmony & Green never produced any marijuana that was legally sold. No legal marijuana sales were reported or marijuana taxes paid."
Pack's criminal trial began on January 27, and this morning, according to the DA's office, he was convicted of six felonies: "two counts under the Colorado Organized Crime Control Act (COCCA) — pattern of racketeering and conspiracy; a first-class drug felony; conspiracy to cultivate marijuana; and two counts of securities fraud." He'll face a possible eight-to-32 years in prison at his sentencing hearing, scheduled for April 6.
In a statement, 18th Judicial District George Brauchler said, "Coloradans did not pass Amendment 64 [the 2012 ballot measure that legalized limited recreational cannabis sales] to become the Wild West of Weed. Despite the perception that marijuana is completely legal, it is not. Colorado created a regulatory framework that we defend by aggressively prosecuting those, including the rich, who choose greed over our laws."
The civil complaint against Pack, who currently lives in California, is still pending. Click to read Pierre Raygot and Christophe Raygot v. Scott Pack, et al.
This post was updated at 4:40 p.m. to include information provided by the 18th Judicial District DA's office.