⏱ 2 min read
Laurie Holcomb, the founder of multiple cannabis companies in California, is facing charges for allegedly obtaining $1.4 million in pandemic-related loans by falsely certifying that her businesses were not involved in illegal activity. The scheme took place in San Diego, where Holcomb’s companies, including Gold Flora LLC and Black Lion Farms LLC, were engaged in the cultivation, distribution, and retail sale of recreational cannabis and cannabis products, which is illegal under federal law. The loans were obtained through the Paycheck Protection Program (PPP), a federal program created to provide emergency financial support to eligible small businesses experiencing economic hardship caused by the COVID-19 pandemic.
Holcomb, a resident of Huntington Beach, California, secured the loans by falsely certifying under penalty of perjury on loan applications that her businesses were not involved in illegal activity. However, the manufacture, distribution, dispensation, and possession of cannabis are illegal under federal law, with the exception of use in federal government-approved research. The Small Business Administration (SBA) eligibility rules generally excluded businesses engaged in activities involving federally illegal cannabis from eligibility for PPP loans.
The United States has filed a complaint under the False Claims Act (FCA) against Holcomb, alleging that she illegally obtained the loans and subsequent forgiveness of the loans. The Gold Flora Companies have since filed for receivership in California State Superior Court. The case highlights the ongoing challenges faced by the cannabis industry in accessing federal financial support due to the conflicting state and federal laws regarding cannabis.
The DOJ’s action against Holcomb serves as a reminder of the importance of compliance with federal laws and regulations, particularly when seeking federal financial assistance. The case is a significant development in the ongoing efforts to regulate the cannabis industry and prevent fraudulent activities.
📋 Key Facts
- Crime: Fraud & Financial Crimes
- Defendant: California
- Location: CA
- Source: DOJ Press Release
