The chief govt of a beverage firm marketed to ladies was charged by a federal grand jury of working a fraudulent scheme that raised greater than $13 million from buyers however prosecutors say the bulk was spent on luxurious objects and greater than 1,000,000 spent at casinos.
Lupe Louise Rose, 54, was arrested in connection to her dealing with of funds for her firm, SHE Beverage, which she based in Palmdale, Calif., in 2009. Rose promoted the corporate as women-owned, saying it offered beer, wine, bottled water and different drinks designed “to cater to ladies’s wants primarily to feminine shoppers,” in line with a 16-page indictment filed within the Central District of California.
The corporate additionally claimed that its bottled water was made with a proprietary components that falsely claimed it cured most cancers and spina bifida and had different well being advantages and was authorized by the U.S. Meals and Drug Administration, prosecutors mentioned.
An e mail to Rose’s lawyer was not instantly answered for remark.
Rose raised greater than $13.5 million from greater than a thousand buyers throughout the U.S. however as a substitute of utilizing the funds for the enterprise, she spent the cash on herself, prosecutors declare. That features spending nearly all of that cash at casinos and to buy luxurious objects, automobiles and renting a home.
Rose pleaded not responsible to the costs specified by a 39-count indictment throughout an arraignment listening to in federal courtroom Monday. She was launched on a $20,000 bail, in line with courtroom information, and a trial date has been set for March 19.
The case in opposition to SHE Beverage Firm entails a scheme that spanned from 2017 to 2020, mentioned prosecutors.
Rose raised investments in SHE Beverage by issuing $2.50-a-piece shares that constituted “securities” inside the which means of the Securities Change Act, in line with the indictment. These shares had been provided and offered by means of paperwork, funding guides, over the corporate’s web sites, emails and verbal gross sales pitches, in line with prosecutors.
A number of the gross sales conferences the place Rose gave her presentation to buyers had been livestreamed.
However Rose’s techniques had been manipulative and misleading, in line with prosecutors, who declare she made deceptive or false statements to buyers in a scheme to defraud. She claimed that the corporate was profitable, however didn’t characterize to buyers that their cash can be utilized by the corporate’s executives for their very own private compensation.
In a 2018 funding doc that Rose authorized, SHE Beverage promised that $4 million of the investor’s cash would go to buy stock, however the firm solely spent about $300,000 between 2015 and 2021, in line with courtroom paperwork.
As a substitute, Rose transferred $6 million of that cash to herself and her family and friends. That cash was used to buy automobiles and vehicles for her family and friends’s private use. The cash was additionally used to pay for the lease on a home the place she lived and to buy clothes at Gucci and Louis Vuitton shops, prosecutors mentioned.
Whereas the corporate promoted itself as producing roughly $4 million to $5 million in income, the corporate offered lower than $263,000 in merchandise within the 2018 fiscal 12 months. A lot of the income was generated by renting the corporate’s workplace house for events, in line with courtroom paperwork.
Rose additionally lied about her work historical past, in line with prosecutors, falsely claiming that she labored with McDonald’s to develop their bagel sandwich and a stint with the style firm Versace.
Rose additionally managed a number of enterprise checking accounts for SHE Beverage that had been linked to shell firms meant to offer the impression that the corporate was rising, in line with the indictment.
In 2021, the SEC sued Rose, accusing her of fraudulently elevating tens of millions for her firm all through the U.S. A federal decide earlier this 12 months ordered Rose and two others linked to the corporate liable to pay $12 million. They had been additionally ordered to pay over $738,000 in curiosity, in line with federal prosecutors.
