Key West, FL asked in Business Formation, Contracts, Federal Crimes and Tax Law for Florida

Q: Have I been a victim of investment fraud? Has he violated the law? What steps can I take to resolve this?

In 2020, a friend went into the cannabis business in Oklahoma. He told me it was legal and profitable and convinced me to invest $100,000, promising me shares. I wired the money to his real estate company, AAA LLC, in September 2020 (I have the receipt). By 2022, he had not provided any updates, only saying the business was losing money. When I inquired about tax issues, he told me that my name was not listed in the current cannabis company, BBB LLC, or in any formal documents. This made me suspect investment fraud, so I started asking for my money back. Since the beginning of 2023, I have been urging him to return the money, but he has continuously delayed. Later, He gave me a handwritten statement outlining the shares he promised me, and he signed it, but I did not. I took it to the Navy legal department for notarization, but they said it was improper without both parties present. Later, I discovered the company mentioned in the statement was not under his name, so I did not sign it.

2 Lawyer Answers
Jennifer Newton
Jennifer Newton
  • Miami, FL
  • Licensed in Florida

A: After reviewing the details of your investment in the cannabis business in Oklahoma and the issues you've encountered, here are some potential legal actions you can take :

Demand Letter: Initiate with a formal demand letter requesting the return of your $100,000 investment. Clearly outline the facts and provide a deadline for repayment. This can sometimes prompt the other party to settle the matter without further legal action.

Civil Lawsuit: You can file a civil lawsuit for fraud, breach of contract, or unjust enrichment. To prove fraud, you will need to demonstrate that:

A false statement of material fact was made.

The statement was known to be false by your friend.

The statement was made with the intention that you act upon it.

You relied on the statement.

You suffered damages as a result.

Since you are in Florida and the business is in Oklahoma, jurisdiction can be complex. You may be able to file a lawsuit in Florida if there are sufficient connections to Florida, such as the transaction occurring while you were in Florida or communications about the investment taking place in Florida. Otherwise, you might need to file in Oklahoma.

Since you sent the money based on the promise of receiving shares, and you have a handwritten statement (even though you did not sign it), you may have a claim for breach of contract. The fact that the statement was signed by your friend could support your claim.

If your friend has received and retained the benefit of your investment without providing the promised shares, you may have a claim for unjust enrichment, seeking restitution for the amount invested.

Investment fraud can also be a criminal matter. You can file a complaint with the Florida Department of Law Enforcement (FDLE) or your local police department. They may investigate and potentially prosecute the case if they find sufficient evidence of criminal activity.

Given that this involves an investment in shares, you might also consider contacting the Florida Office of Financial Regulation (OFR) or the Securities and Exchange Commission (SEC) to report potential securities fraud.

I strongly recommend consulting with a Florida attorney specializing in investment fraud or securities law to get tailored advice and assistance with your case. An attorney can help you navigate the complexities of your situation and take the appropriate legal actions.

Please let me know if you would like to proceed with any of these options or if you need any further assistance.

1 user found this answer helpful

James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Tax Law Lawyer
  • Sacramento, CA

A: It sounds like you may have been a victim of investment fraud. Your friend’s failure to provide updates, the lack of formal documentation, and his reluctance to return your money are concerning. The fact that your name is not listed in the cannabis company and the handwritten statement without proper notarization further raises red flags.

To address this, gather all evidence of your investment, including the receipt of the wire transfer and any communications between you and your friend. Document your attempts to get your money back and his responses. This information will be crucial if you decide to pursue legal action.

Consult with a legal professional who can review your case and advise you on the best course of action. They can help determine if your friend has violated any laws and what steps you can take to recover your investment. Taking these actions promptly will be essential in seeking resolution.

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