Calabasas Man Allegedly Scammed Investors out of at Least $28 Million They Thought Would Fund Cannabis Vaping Businesses
LOS ANGELES – A former UCLA decathlete who also competed with the Philippines national team was arrested this morning on a federal criminal complaint alleging that he fraudulently raised more than $37 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 taken into custody this morning pursuant to a complaint filed on March 30 that charges him with one count of wire fraud. Bunevacz is expected to make his initial appearance this afternoon in United States District Court in Los Angeles.
According to an affidavit filed with the complaint, Bunevacz solicited investments in various businesses – “CB Holding Group Corp.” and “CaesarBrutus LLC,” among others – which he claimed were involved in the sale of vape pens containing cannabis products such as CBD oil and THC. Bunevacz falsely told at least one investor he had a long-standing 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,” the complaint alleges. Bunevacz allegedly 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, 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,” according to the affidavit. Bunevacz allegedly spent $8,143,500 at casinos, paid $218,700 to an event planner in connection with a birthday party for his daughter, and bought a horse for $330,000. Some investor funds were allegedly used to repay earlier investors in a manner consistent with a Ponzi scheme.
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.
According to the affidavit, Bunevacz and his family maintain a public profile. 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 the affidavit. After one investor uncovered a civil lawsuit against Bunevacz, Bunevacz allegedly 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.
Investigators believe that Bunevacz caused his victims to suffer losses of at least $28.4 million, and possibly as much as $35 million. The investigation in this matter is ongoing.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If convicted of the wire fraud charge alleged in the complaint, Bunevacz would face a statutory maximum sentence of 20 years in federal prison.
The FBI, the Los Angeles Sheriff’s Department and IRS Criminal Investigation are investigating this matter. The U.S. Securities and Exchange Commission provided substantial assistance.
Assistant United States Attorney Alexander B. Schwab of the Major Frauds Section is prosecuting this case.