A federal judge just sentenced a California man to 17 and a half years in prison for scamming cannabis industry investors out of over $35 million.
Federal authorities arrested David Joseph Bunevacz for misappropriating investments in April, according to a press release from the US Attorney's Office of the Central District of California. The 53-year-old reportedly convinced more than 100 investors to give him over $45 million to finance companies that were supposedly marketing legal weed vape pens. The scammer was actually not involved in the legal weed business at all, though, and instead used the cash to fund his own extravagant lifestyle.
Bunevacz, a former UCLA decathlete who once competed with the Philippines national team, kicked off his scheme in 2010 by registering several businesses which he claimed were involved with California's legal medical cannabis industry. He then began actively soliciting investors, claiming that he had a solid relationship with a Chinese vape pen manufacturer.
According to the court documents, Bunevacz claimed that he had sourced “raw pesticide-free oil” and was partnering with a “lab that infuses the flavors into the oil with our proprietary custom process that renders the vape flavoring smooth and discrete.”
To support his claims, Bunevacz registered various shell companies under names that were identical or very similar to legitimate cannabis companies. These shell companies were registered to Bunevacz's stepdaughter and other relatives in order to conceal his involvement. And after some shrewd investors discovered that Bunevacz had previously been convicted for securities fraud in 2017, he forged documents to suggest that he had received a $325,000 settlement in the case. In actuality, the court made him pay that amount as a fine.
In total, Bunevacz convinced investors to give him $45,227,266. But instead of investing the money into the weed industry, he used it to buy a massive house, expensive jewelry, handbags, horses, and other extravagances. Investors' cash was also used to pay for his daughter's trips to Las Vegas and throw her a huge blowout birthday party. Several of his victims began experiencing severe financial hardship after their investments failed to pay out, and they eventually pressed criminal charges.
In July, Bunevacz pleaded guilty to one charge of securities fraud and one charge of wire fraud. This week, US District Judge Dale S. Fischer sentenced him to 210 months in federal prison and ordered him to pay $35,267,851 in restitution to his victims. In his ruling, the judge said he handed down a particularly long sentence because Bunevacz was still on probation for his former state court conviction while he was engaged in the scheme.
Bunevacz “preyed on individuals who believed he was their friend,” Judge Fischer wrote in his ruling. “Not even a criminal conviction and the threat of jail convinced [him] to become a law-abiding citizen.”