Indictment: Duo knowingly defrauded investors with pitch that ‘Bud and Breakfast’ venture would yield big returns
The U.S. Attorney’s Alaska office has charged a Delta Junction couple with conspiracy and wire fraud for bilking investors out of more than $700,000 they thought would be used to develop a marijuana theme park in Salcha.
FBI investigators say Brian and Candy Corty used false and fraudulent claims to get 22 people around the country to invest a total of $722,000 in a project the Cortys referred to as a “marijuana theme park” they called “Bud and Breakfast.”
One of those people, a resident of New York City, invested $200,000 in the venture, according to a U.S. Attorney’s Office affidavit. A North Carolina resident invested $25,000.
The affidavit says that from 2017 to 2020, the Cortys enticed those prospective investors to buy shares of their company, Ice Fog Holdings, to finance development of a marijuana cultivation, processing and retail facility at the site of the old Midway Lodge in Salcha, which the couple bought in 2018.
The affidavit says the Cortys told investors the attraction would “include glass ceilings so Ice Fog’s customers could lie in bed and watch the northern lights.”.
Prosecutor: U.S. Attorney's Office will 'hold culpable parties accountable'
Fairbanks-based assistant U.S. attorney and lead prosecutor Ryan Tansey says they take investment fraud extremely seriously. “And our office, the U.S. Attorney’s Office, is going to use all the resources that we have to investigate and hold culpable parties accountable in cases like this,” he said in an interview Wednesday.
Brian Corty declined to comment about the case on tape Wednesday evening. But he said in a written response that, “An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.”
Corty allegedly told investors beginning in mid-2017 that he expected the company’s profits would grow quickly, from $3.8 million in the first year to more than $23 million after three years. And he said their investments would grow 30-fold.
But the project never came to fruition. Investigators say the Cortys and as-yet un-named co-conspirators knew the business had no real revenue potential, and little to no prospect of obtaining a license from the state Alcohol and Marijuana Control Office.
They also said the Cortys used the money from investors for personal purposes.
According to a news release issued Wednesday by the U.S. Attorney's Alaska office, an FBI investigation into the case continues with assistance from the Alaska Department of Law.
The Cortys are scheduled to be arraigned on Monday at the federal courthouse in Fairbanks on charges that include three counts of wire fraud and one count of conspiracy to commit wire fraud.
