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Investigations

Patrick Horsman Investors Update: Securities Lawyers Investigating Recovery Options for Integrated Investors

Patrick Horsman Investors UpdatePatrick Horsman promoted investment programs and sales practices are being investigated by the investor rights lawyers at the Goldman Scarlato & Penny law firm, following allegations of investment fraud and misconduct by some investors in court filings, and Mr. Horsman’s resignation from his brokerage firm. The Goldman Scarlato & Penny investor lawyers would like to speak with Integrated investors who invested in that company at the behest of Patrick Horseman and are concerned about their investments or have useful information that can assist the Goldman Scarlato & Penny attorneys’ investigation.

On October 2, 2020 a civil customer dispute was filed against former Blue Sands Securities broker Patrick Horsman alleging negligent misrepresentation, breach of implied covenant of good faith, unjust enrichment, and fraud, according to Horsman’s FINRA Brokercheck page. As of the date of this article, the dispute shows as pending.

Investor rights attorney Alan Rosca and his colleagues at Goldman Scarlato & Penny PC law firm are investigating Patrick Horsman fraud allegations, alongside allegations of negligent misrepresentation, breach of implied covenant of good faith, and unjust enrichment. Horsman investors who are concerned or have questions about their investments with Patrick Horseman are encouraged to contact Alan Rosca and his colleagues for a free, no obligation discussion about potential recovery options, or to provide useful information.

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    Patrick Horsman Is Allegedly the Subject of Civil Lawsuit

    According to court records filed with the Superior Court of the State of Arizona for the County of Maricopa, a group of investors brought claims against Patrick Horsman and 17 other defendants for alleged fraud, constructive fraud, civil conspiracy, negligent misrepresentation, aiding and abetting tortious conduct, breach of the implied covenant of good faith and fair dealing, conversion, unjust enrichment, and estoppel. The plaintiffs are reportedly seeking compensatory, rescissory, punitive, and any other allowable damages or relief in law in or equity.

    Horsman investors who are concerned they may have suffered a loss arising out of their investments, in particular in Integrated AG or Integrated CBD, are encouraged to contact investor rights attorney Alan Rosca and his colleagues for a discussion of their options or for a free case evaluation. Call 888-998-0530, via email at rosca@lawgsp.com, or fill out the contact form on this webpage.

    Defendants in the lawsuit are identified with the following information:

    • Patrick B. Horsman, a resident of Miami-Dade County, Florida, the President, CEO, and Chairman of the Board for Integrated CBD, and owner/operator of most if not all affiliated entities
    • Jeffrey M. Dreyer, a resident of Maricopa County, Arizona, the chief operating officer for Integrated CBD, one of three Board members, and owner/operator of most if not all affiliated entities
    • Ari M. Schiff, a resident of Maricopa County, Arizona, officer in charge of agricultural business development for Integrated CBD, and owner/operator of most if not all affiliated entities
    • Integrated AG XI, an Arizona limited liability company with Jeffrey Dreyer as the registered agent
    • Integrated AG XII, an Arizona limited liability company with Jeffrey Dreyer as the registered agent
    • Integrated AG XI AZ, an Arizona limited liability company and Patrick Horseman and other defendants acted/purported as managers
    • Integrated AG Holdings, a Delaware limited liability company, and Patrick Horsman, Jeffrey Dreyer, and Ari Schiff acted/purported as managers
    • Integrated AG Holdings AZ, a Delaware limited liability company, and Patrick Horsman, Jeffrey Dreyer, and Ari Schiff acted/purported as managers
    • Integrated AG LP, a Delaware limited liability company and Patrick Horsman and other defendants acted/purported as managers
    • Integrated AG Equipment, an Arizona limited liability company with Jeffrey Dreyer as the registered agent
    • IAG equipment, an Arizona limited liability company with Jeffrey Dreyer as the registered agent
    • Integrated AG Management, a Delaware limited liability company and Patrick Horsman and other defendants acted/purported as managers
    • Integrated AG Operations, a Delawre limited liability company and Patrick Horseman, Jeffrey Dreyer, and Ari Schiff acted/purported as managers
    • Verified Organic LP, a Delaware limited liability company with Patrick Horsman and Jeffrey Dreyer, acting/purporting as general/limited partners
    • Verified Organic LLC, a Delaware limited liability company, Patrick Horsman and Jeffrey Dreyer are the co-founders, co-owners, and controlling principal members
    • AZ Farm Management, a Delaware limited liability company and Patrick Horsman, Jeffrey Dreyer, and Ari Schiff acted/purported as principal members
    • Hyder Ranch, a Delaware limited liability company with Integrated AG XII and Goldcrest Farm Trust REIT acting/purporting as principal members
    • Goldcrest Farm Trust REIT, a Delaware limited liability company that acted as a principal member of Hyder Ranch

    Reportedly, Patrick Horsman, conspiring with the other defendants, allegedly planned and executed an elaborate scheme of fraud and misrepresentation by recommending Plaintiffs to invest in Integrated CBD. As part of the scheme, through negligent misconduct and improper and unreasonable transactions with affiliated entities, Horsman and the individual defendants ran Integrated CBD to the ground. As a result, the plaintiffs’ investments allegedly vanished from the company and into the Defendant’s pockets, all according to court documents.

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      Horsman and the individual defendants allegedly operated Integrated CBD as a farming operation company that grows industrial organic hemp and extracts CBD to sell to large industrial and multinational brands in the pharma and consumer space, according to the public documents. Patrick Horseman and other defendants reportedly misrepresented to investors that Integrated CBD had access to over 10,000 acres of certified organic/conventional farmland in Arizona but according to their lease agreement, they only had access to 8,524 acres. In addition, approximately 1,500-4,000 acres of the land was not farmable due to lack of water and other issues, all according to court records.

      As shown in the documents filed with Superior Court of Arizona for the County of Maricopa, the defendants in the lawsuit allegedly misrepresented Integrated CBD as a farmland with capabilities to produce viable organic hemp crop but in reality, the defendants were reportedly well aware that the farmland was incapable of producing viable organic hemp crop due to soil salinity, rockiness, water salinity, and access issues in the region.

      Horsman and the individual defendants also allegedly represented Integrated CBD as a strategic combination of ‘Big Ag’ expertise with Hemp Expertise. But it is reported that Integrated CBD allegedly did not have any hemp expertise nor any meaningful, relevant hemp knowledge or experience. In addition, defendants in the lawsuit allegedly represented that the company was engaging in reasonable transactions with affiliated entities but the assets, equipment, and supplies that were leased by the company were reportedly owned by entities that were owned and managed by the individual defendants, all according to court documents.

      Court documents filed with the Superior Court of Arizona for the County of Maricopa report Patrick Horseman and the individual defendants publicly represented that Integrated CBD allegedly raised $50 million in senior secured debt from a New York based hedge fund, and $70 million total in debt and equity capital, as a way to boost the company’s outward appearance and attract new investors. The defendants were allegedly well aware that the company had already, or in the near future, would run out of funds and fail to produce hemp crops, thus, causing the company to collapse, court documents alleged.

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        Reportedly, Patrick Horsman was using millions of dollars worth of plaintiff’s investments for personal travel, leisure, financial purposes, and for the use and benefit of other affiliated entities that Horsman allegedly owned and controlled. Horsman allegedly used approximately $2 million of the company’s funds (plaintiffs’ investments) to pay off credit card bills in his name. In addition, Patrick Horseman allegedly bought a private jet that cost more than a million dollars with the logo of his investment firm, Horsman Holdings, embroidered on the exterior of the jet.

        Integrated AG Integrated CBDAllegedly, the plaintiff’s investments were being used to enrich the defendants through affiliated-entity transactions and as a result, Integrated CBD failed and became insolvent. When plaintiffs eventually began asking questions about the status of their investments, Horsman and other defendants allegedly provided periodic status updates purporting that hemp crop was successfully being grown on the farmland even though this was not the case. This was allegedly a part of the scheme of fraud to keep plaintiffs invested in Integrated CBD.

        Reportedly, around January 20, 2020, Horsman contacted plaintiffs to inform them that Integrated CBD had crumbled and would need more money in order to continue. Through Horsman and the individual defendants alleged wrongful and fraudulent acts, plaintiffs’ investments were completely gone. As early as December 2019 and as late as February 2020, Horsman allegedly fired and laid off all of Integrated CBD’s employees due to a depletion of funds. Shortly after, Horseman caused Integrated CBD to apply for a loan through the Paycheck Protection Program, and on April 29, 2020, the loan request was allegedly approved in the amount of $150,000-$350,000.

        Horsman investors who believe they suffered a loss in connection with Patrick Horsman aforementioned allegations are encouraged to contact attorney Alan Rosca of the Goldman Scarlato & Penny PC law firm. Alan Rosca and his colleagues have extensive experience representing investors who have lost money due to broker misconduct. For a free case evaluation or discussion of potential recovery options, give us a call at 888-998-0530, send an email to rosca@lawgsp.com, or fill out the contact form on this webpage.

        Patrick Horsman Allegedly Permitted to Resign from Blue Sands Securities

        On October 9, 2020 Blue Sands Securities permitted Patrick Horsman to resign from the company due to a customer’s complaint that alleged negligent misrepresentation, breach of implied covenant of good faith, unjust enrichment, and fraud, as reported on Horsman’s Brokercheck page.

        Before Horsman’s employment with Blue Sands Securities, he was previously employed with Pali Capital located in New York, New York from April 7, 2004 until May 23, 2007 and Investors Resources Group located in Vacaville, California from August 29, 2003 until February 18, 2004.

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          Patrick Horsman Sanctioned by FINRA 

          Two regulatory action disclosure on Horsman’s FINRA Brokercheck page reports Horsman allegedly purchased 11 initial public offerings (IPOs) while registered with Blue Sands Securities, according to FINRA’s Letter of Acceptance, Waiver and Consent(AWC). Horsman purchased IPO shares in three brokerage accounts held at Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley&Co, and Fidelity Brokerage Services, the AWC reports.

          As reported on the AWC, Horsman allegedly opened two accounts at Fidelity in January 2014 and February 2014, which he failed to disclose in writing to Blue Sand Securities until December 2014. He also allegedly opened two accounts at Morgan Stanley in July 2014 and September 2014, and failed to disclose in writing to Blue Sand Securities until December 2015.

          According to AWC, FINRA prohibits IPO purchases when associated with a FINRA member firm, therefore Patrick Horseman violated FINRA Rules. As a result, on March 1, 2017, Horsman received a 10 day suspension, a fine of $20,000, and disgorgement of $10,537.34, the AWC reports.

          On March 27, 2018, the Massachusetts Securities Division initiated a regulatory action with FINRA and  sanctioned Horsman for a period of three years due to the 10 day suspension he received in March 2017 for the allegations of purchasing 11 IPOs while registered with Blue Sands Securities, according to his FINRA Brokercheck page. The sanction ordered extensive supervision of Horseman with all potential Massachusetts investors to ensure investors qualify as accredited investors, and a mandatory review of Horsman’s personal securities transactions.

          Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints mentioned in this article, unless otherwise indicated, and no allegations of misconduct are being independently made in this blog.

          Invested with Patrick Horsman? Discuss with Securities Lawyers

          Patrick Horseman investment lossThe Goldman Scarlato & Penny PC law firm represents investors who lose money as a result of investment-related fraud or broker misconduct and we are currently investigating Patrick Horsman fraud, misrepresentation, unjust enrichment, and breach of implied covenant of good faith allegations.

          Concerned Patrick Horsman investors are encouraged to contact us today. The firm takes most cases of this type on a contingency fee basis and advances the case costs, we only get paid for fees and costs out of money we recover for clients. All consultations are free.

          Attorney Alan Rosca, securities lawyer and adjunct professor of securities regulation, has represented thousands of investors who experienced losses at the hand of their investment adviser across the country and around the world in cases ranging from arbitrations to class actions.

          Patrick Horsman investors concerned about potential losses, or who would like to assist our investigation may contact attorney Alan Rosca for a free, no obligation evaluation of their recovery options by calling 888-998-0530, via email at rosca@lawgsp.com, or through the contact form on this page.

          In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent updates regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases. Also, the brokercheck report linked to some of our blogs is the up-to-date version as of the date of posting. Visitors may check the most recent version of each brokercheck report at www.finra.org.

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