The U.S. Securities and Exchange Commission (SEC) has filed suit against a Texas man the agency said collected $1.2 million from investors for a hemp business and then spent more than $755,000 on gambling, luxury items and rent on a swanky personal residence.
Robert Tye Cournoyer, 56, formerly of Dallas, Southlake and Arlington may be forced to repay investors and pay thousands of dollars in civil penalties under a complaint filed by the SEC this month.
The agency said Cournoyer used two companies he controlled – Green Equity and RS Group – to entice investment in a bottling plant and the production of hemp, CBD and hand sanitizer.
Spending it fast
However, Cournoyer used more than half the money he collected from investors for personal expenses. The SEC said Cournoyer often spent the money immediately after the funds hit his bank accounts.
“In many instances, cash withdrawals, gambling, residential lease payments, and luxury purchases happened in very close proximity to (and sometimes on the same day as) investor deposits,” according to the lawsuit, which claims Cournoyer “was gambling full time starting in 2019 or 2020.”
“On multiple occasions, investor funds were deposited into bank accounts with a near-zero balance and then spent, in the same month . . . . For example, on June 1, 2019, a Green Equity bank account had a balance of $501.37. The bank account received at least $90,000 in investor deposits that month, which Cournoyer spent, for example, at the Mirage and the Bellagio in Las Vegas, Panerai luxury boutique in Las Vegas, Hugo Boss in Dallas, and for his personal residence’s lease payment and personal credit card payments.”
Thirty days later, on June 30, 2019, the Green Equity account had an ending balance of $8,955.12, according to the SEC lawsuit.
Marketing fraud
Cournoyer also told investors that Colorado-based Green Equity was operating when it had been defunct since 2019, and used the company’s marketing materials to make false and misleading statements, including that he graduated from the University of Florida law school when he had not, and exaggerating his business experience, according to the SEC.
He also failed to inform investors that he was sanctioned after the SEC previously charged him with fraud, according to the lawsuit, filed May 10 in U.S. District Court for the District of Colorado.
Cournoyer formed Green Equity in November 2017 and soon after partnered with an unnamed Colorado-based hemp business which agreed to find hemp-related opportunities for Green Equity.
Bottling plant bungled
In October 2018, the Colorado business acquired an inoperative bottling plant it planned to retrofit into a facility for CBD-infused products, to be funded by Green Equity investors. Although Green Equity helped finance the purchase of the bottling plant in 2018, the facility was, and still is, owned by the Colorado company and not by Cournoyer or his entities.
The partners abandoned the project in 2019, and the facility was never made operational.
Cournoyer filed for bankruptcy in September 2022.
The SEC has asked the court to force Cournoyer to repay the money taken from investors, that he pay unspecified civil penalties, and that he be barred from selling securities and prohibited from acting as an officer or director of a public company. Except for one $5,000 payment, the investors have never been repaid, according to the lawsuit.
The SEC filed the lawsuit after Cournoyer failed to respond to subpoenas.
