Authorities are investigating a reported scam against a New Zealand medical cannabis company. Photo / 123RF
Authorities are investigating a reported scam against a New Zealand medical cannabis company. Photo / 123RF
Investigations have been launched into claims a New Zealand medical cannabis company has been scammed by homegrown fraudsters targeting potential investors.
Marlborough firm Puro, which last week secured a licence from the Ministry of Health to commercially grow the country's largest-ever crop of medical cannabis, was alerted to the suspiciousactivity last Thursday.
Industry body, the New Zealand Medical Cannabis Council, reported it to police.
Now, the Financial Markets Authority (FMA), the Department of Internal Affairs and Ministry of Health have been alerted to the suspected con.
A spokesman for the FMA said while they do not generally comment on whether or not it has received complaints, he confirmed: "We have been made aware of a potential investment scam that impersonated a medical cannabis company. We are reviewing the situation."
A health ministry spokeswoman added: "As it may involve potentially fraudulent activity, we expect this would initially be investigated by relevant financial authorities and police."
Puro's Kekerengu site, in Marlborough, which has capacity for up to 90,000 low-THC plants. Photo / Supplied
The fraud allegations emerged through a company posing as Paradox Therapeutics.
A seemingly-legitimate website, www.paradoxtherapeutics.com, which has since been taken offline, featured information lifted straight from Puro's own website.
It even included photographs of Puro managing director Tim Aldridge and cultivation advisor Tom Forrest.
The alleged scammers were approaching people for investment into Paradox Therapeutics, claiming they had a medical cannabis licence from the Ministry of Health.
A woman purporting to be from Paradox Therapeutics and going by the names, 'Michelle' and 'Esther', was offering investment evenings.
Puro managing director Tim Aldridge described the scam as being "unpleasant". Photo / Supplied
Puro was alerted that 'Esther' had a physical meeting with potential investors in the Coromandel Peninsula last Wednesday evening.
Since then, Puro has had "a flurry of people reaching out" to check if they were planning to expand into the North Island.
And Aldridge says potential investors are still reaching out to them this week.
"We're not quite sure where and how those approaches have come from," he said.
"It has come as a bit of a shock, obviously. We have reported it to police, the FMA and Ministry of Health and they are all taking it pretty seriously."
Records show that the paradoxtherapeutics.com web domain was registered by an 'Esther Martinez', giving an Auckland CBD address near Spark Arena.
The cellphone number used by 'Esther' now appears to be disconnected. Approaches by the Herald have not been returned. There are no records for any 'Esther Martinez' living in New Zealand.
Correspondence between a potential investor and 'Esther' from Paradox Therapeutics, seen by the Herald, show the extent of the trickery.
Puro this week started planting cannabis seeds at its Kekerengu site in Marlborough. Photo / Supplied
She talks about recruiting "experts in agriculture, horticulture and agronomy" in the South Taranaki region and names several medical professionals who are reportedly on board.
However, when the Herald today contacted one Auckland GP named in the correspondence, he denied ever hearing of Paradox Therapeutics or of having any involvement in any medical cannabis operations. He was alarmed to learn of his name being used by the company.
"I can categorically deny having any knowledge of this company and I'm certainly not on any board of any cannabis company. It's obviously some sort of scam," said the GP, who the Herald has chosen not to name.
Another doctor who purportedly works at Starship Children's Hospital and allegedly "researches medicinal cannabis in regards to overseas studies with children" doesn't appear to exist.
When contacted by the Herald, New Zealand Police refused to comment.
"In general, police is unable to respond to queries which seek to establish whether specific individuals or organisations are, or have been, under investigation," a spokeswoman said.
Puro this week started planting cannabis seeds at its Kekerengu site, which has capacity for up to 90,000 low-THC plants, and it is working with New Zealand Trade and Enterprise to facilitate the country's first-ever export of bulk medical cannabis.
"So I guess that's what this person is feeding off and trying to leverage for fraudulent activities," Aldridge said.
"There is no room for anything other than full integrity. We take security very seriously – we have to. It's a new industry, there is a lot of interest in it, and we have to be very careful."
The FMA says it encourages New Zealanders to ensure a financial investment is regulated before handing over their hard-earned money. It suggested checking whether a company is on the Financial Services Providers Register or licensed by the FMA.
"As with all investments, the FMA encourages prospective investors to ensure they fully understand the risks by carrying out the necessary research. Investors may wish to seek financial advice," the FMA spokesman said.
