A Southern California man who once competed on the Philippines national decathlon team has been sentenced to 17 1/2 years in federal prison for bilking investors out of more than $35 million with a phony scheme to market cannabis vape pens
A Southern California man who once competed on the Philippines national decathlon team was sentenced Monday to 17 1/2 years in federal prison for bilking investors out of more than $35 million with a phony scheme to market cannabis vape pens.
David Joseph Bunevacz also was ordered to pay $35.2 million in restitution by U.S. District Judge Dale S. Fischer, who said he had “preyed on individuals who believed he was their friend” and that the “seriousness of (his) conduct cannot be captured in mere dollars and cents,” according to a statement from the U.S. attorney’s office.
Bunevacz, 53, of Calabasas, pleaded guilty in July to securities fraud and wire fraud.
According to his plea agreement, Bunevacz created several businesses as far back as 2010 that he claimed were involved in the cannabis industry and the sale of vape pens.
He raised tens of millions of dollars from at least 10 investors, prosecutors said.
But instead of financing business operations, Bunevacz was accused of using much of it to fund a lifestyle that included a fancy house, Las Vegas trips, jewelry, designer handbags, horses and a lavish birthday party for his daughter.
Bunevacz is a former decathlete at the University of California, Los Angeles, and also competed for the Philippines in the 1990s.
Here’s the DOJ Press Release
FOR IMMEDIATE RELEASE
Monday, November 21, 2022
Calabasas Man Sentenced to 17½ Years in Prison for Scamming Cannabis Vaping Business Investors Out of More Than $35 Million
LOS ANGELES – A former UCLA decathlete who also competed with the Philippines national team was sentenced today to 210 months in federal prison for fraudulently raising more than $45 million from investors who were told their funds would be used to finance companies marketing cannabis vape pens.
David Joseph Bunevacz, 53, of Calabasas, was sentenced by United States District Judge Dale S. Fischer, who also ordered him to pay $35,267,851 in restitution. At today’s sentencing hearing, Judge Fischer noted that Bunevacz had “preyed on individuals who believed he was their friend” and that the “seriousness of [his] conduct cannot be captured in mere dollars and cents.”
Judge Fischer also found that Bunevacz continued to perpetrate his scheme even while serving probation for a state court conviction, concluding, “Not even a criminal conviction and the threat of jail convinced [Bunevacz] to become a law-abiding citizen.”
Bunevacz pleaded guilty on July 18 to one count of securities fraud and one count of wire fraud. He has been in federal custody since his arrest in this case on April 5.
Going back to 2010, Bunevacz created various business entities, with names such as CB Holding Group Corp. and Caesarbrutus LLC, that he claimed were involved in the cannabis industry and the sale of vape pens containing cannabis products such as CBD oil and THC.
Bunevacz falsely told at least one investor he had a longstanding relationship with a Chinese manufacturer of disposable vape pens and he obtained “raw pesticide-free oil” that was sent to a “lab that infuses the flavors into the oil with our proprietary custom process that renders the vape flavoring smooth and discrete,” according to court documents. Bunevacz also provided investors with forged documents – such as bank statements, invoices and purchase orders – to support his claims of the businesses’ success and the need for investor funds.
Instead of using the funds to finance business operations – and while some of his victims were suffering severe financial hardship – Bunevacz misappropriated the vast majority of the funds to pay for his own opulent lifestyle, including a luxurious house in Calabasas, Las Vegas trips, jewelry, designer handbags, a lavish birthday party for his daughter, and horses.
To create the false appearance that his companies were engaged in legitimate business activities, Bunevacz registered various shell companies, including several with names similar or identical to those of legitimate cannabis businesses. To conceal his control of these shell companies and the bank accounts associated with them, Bunevacz listed other individuals, including his stepdaughter, as the corporate officers of the shell companies.
Bunevacz’s blog touts his success as a former decathlete who competed for the Philippines, and his wife and daughter appeared in a reality television show. Despite Bunevacz’s promotion of his background, Bunevacz took efforts to conceal negative information from investors, such as his 2017 felony conviction for the unlawful sale of securities, according to an affidavit submitted in support of a criminal complaint in this case.
After one investor uncovered a lawsuit against Bunevacz, Bunevacz emailed a counterfeit version of the settlement agreement to falsely make it appear that he had been paid $325,000 as part of a settlement. In reality, it was Bunevacz who had agreed to pay $325,000 to settle the claim.
Operating through his cannabis companies, Bunevacz raised approximately $45,227,266 from more than 100 victim-investors, according to the government’s filing. Judge Fischer found that Bunevacz caused losses of approximately $35,267,851.
“The sense of violation, the assault on personal dignity, and the lasting trauma [Bunevacz] has caused are very much reminiscent of the harm typically associated with violent crimes,” prosecutors argued in a sentencing memorandum. “And, with well over a hundred victims, [Bunevacz] caused these harms at a scale rarely seen.”
The FBI, IRS Criminal Investigation, and the Los Angeles County Sheriff’s Department investigated this matter. The U.S. Securities and Exchange Commission provided substantial assistance.
Assistant United States Attorney Alexander B. Schwab of the Major Frauds Section prosecuted this case.