Three girls who ran a Lancaster-based beverage firm had been ordered to pay greater than $14 million in mixed penalties for allegedly defrauding and deceptive traders over a three-year interval, in line with the Securities and Exchange Commission.
She Beverage Co. and its executives — Lupe L. Rose, 54, and Sonja F. Shelby, 60, of Palmdale and Katherine Dirden, 48, of Lancaster — have 30 days to pay the entire, as ordered Thursday by the U.S. District Court docket for the Central District of California.
The corporate was slapped with a $12-million advantageous and $739,000 in prejudgment curiosity. Rose owes a further $669,687, whereas Shelby and Dirden had been every fined one other $334,842.
Calls to a cellphone quantity listed for Shelby and Dirden weren’t returned.
Rose was arrested last week after a federal grand jury indictment alleged she had taken greater than $13.5 million from greater than 1,000 traders. A trial is scheduled for March 19.
Rose offered a 34-minute YouTube video as her response. In textual content, Rose mentioned she endured “the profound injustice of racism, discrimination, and a focused marketing campaign orchestrated by the Securities and Trade Fee.” She claimed that she spent greater than $1 million in her authorized protection and that her “assets to maintain the authorized battle had been exhausted.”
She mentioned the SEC by no means took into consideration “all my respectable enterprise bills,” thus “falsely portraying our firm and its subsidiaries as mere shells.” Rose claimed the federal government disregarded enterprise bills, together with payroll for 20 staff, advertising and marketing and promotions, utility payments, logos, lease and lease for 5 places, journey bills, analysis and growth.
A name to the SEC’s media division was not instantly answered.
The SEC filed an preliminary civil complaint Sept. 14, 2021. The company claimed that between 2017 and 2019, She Beverage raised greater than $15 million from unregistered inventory gross sales to greater than 2,000 purchasers and traders nationwide.
The fee wrote that the corporate “falsely represented to traders” that 30% of funding can be allotted for beverage purchases. In actuality, round 2% went towards drinks, whereas “not less than $7.5 million” was redirected to pay for “automobiles and vans, lease, luxurious retail items and journeys to casinos,” the criticism alleges.
The fee mentioned the three executives withdrew $6 million in money and transfers and spent $1.2 million of that in casinos, together with $180,000 for eight automobiles and vans for private use and to repay a mortgage for a Porsche owned by Shelby, in line with the fee.
Different bills alleged by the SEC included $100,000 for lease funds on a home and $50,000 for luxurious items akin to Gucci and Louis Vuitton luggage.
The founders “overstated and mischaracterized” firm income to trick individuals into investing, in line with the fee. She Beverage knowledgeable traders that the corporate had constructed a brewery, when building was not accomplished, and falsely touted the model’s bottled water as “proprietary” and “FDA-approved,” the SEC alleged in its lawsuit. The trio informed traders they’d “thousands and thousands of their very own cash” invested within the firm, whereas their portion was “rather more modest.” The defendants additionally claimed that outsiders had been fascinated about shopping for the corporate for a whole bunch of thousands and thousands of {dollars}; the SEC mentioned there have been no gives.
The fee additionally claims that the executives informed traders that an preliminary public providing “was imminent” once they hadn’t even begun to fill out paperwork.
She Beverage promoted itself as “a women-owned beverage producer,” promoting beer, wine, spirits and bottled water marketed to girls, in line with fee filings.
Between 2018 and 2019, Rose, Shelby and Dirden hosted three to 4 in-person conferences that included traders, in line with the fee. They supplied samples of the product and instantly solicited traders, in line with the SEC.
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