New Jersey hemp company Delta Technologies is suing the Massachusetts-based biotech firm Salzman Group, claiming the company operated a “Ponzi scheme” which utilized more than $700,000 it raised from the firm for its own projects.
A New Jersey hemp company is suing a Massachusetts biotech company claiming it operated a “Ponzi scheme” by using more than $700,000 it raised from the firm to fund its own projects, Salem News reports. In its lawsuit against the Salzman Group, Delta Technologies claims the drug development company took their money and used their machinery in other, failed, projects.
According to the lawsuit, Salzman Group Chairman and CEO Dr. Andrew Salzman agreed to put together a “large team of scientists” to help Delta and its manager, Alexander Jacobs, obtain a patent to produce different types of hemp products. Jacobs and Delta agreed to pay the Salzman Group $20,000 per month for the project. The lawsuit alleges that, at first, Salzman told Jacobs that the team had made “dramatic” short-term progress, but the lawsuit contends that Salzman eventually stopped giving Jacobs updates or providing evidence of progress toward a commercially viable product.
The lawsuit contends that Jacobs also agreed to provide cash to the Salzman Group to start a small laboratory in Beverly, Massachusetts to produce a “rare cannabinoid” to sell in Europe and “across the world” but Jacobs said the Salzman Group “never delivered the product on time,” and the deliveries that were made were “too small” to fulfill all of Jacob’s clients’ orders. In the lawsuit, Jacobs said he learned later that Salzman had never moved the product’s production to the Beverly laboratory. Jacobs also claims that the machinery provided to the project was never returned and that Delta has been unable to retrieve them.
The lawsuit accuses the Salzman Group of intending to defraud, and defrauding, Delta “out of hundreds of thousands of dollars to pursue their own interests” with “no intent to ever produce the product plaintiffs needed.” The lawsuit accuses the Salzman Group of breach of contract and fraud.
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