Professional Documents
Culture Documents
v.
Plaintiffs Pierre and Christophe Raygot, by their undersigned counsel, hereby submit their
Second Amended Complaint against Defendants Scott Pack, Rudy Saenz, R. Michael Pack, SMP
Properties, LLC, a Nevada entity, SMP Properties, LLC, a Colorado entity, HGCO LLC, and
PARTIES
resident of Colorado, and did business in the City of Denver, County of Denver, State of Colorado,
as a member and/or officer of Defendants, HGCO LLC, and Harmony & Green, LLC. Upon
information and belief, Scott Pack is an officer, member, beneficiary, or holder of a beneficial interest
4. At all times related to this Second Amended Complaint, Defendant Rudy Saenz was a
resident of Denver, Colorado, and did business in the City of Denver, County of Denver, State of
Colorado, as either a member of, owner of, or conspirator with the SMP Properties LLC Defendants,
HGCO LLC, and Harmony & Green, LLC. Saenz represented himself as the Chief Operating Officer
of Harmony & Green LLC and had introduced himself to Pierre Raygot as Scotts partner in the
5. Defendant R. Michael Pack (Michael Pack), at all times related to this Second
Amended Complaint, was a resident of California and did business as, or financed, or benefited from
the fraudulent activities of the SMP Properties, LLC Defendants, HGCO LLC, and Harmony &
Green, LLC. Michael Pack, through his interest in SMP Properties, LLC, owns property in Colorado
at which HGCO operates a licensed marijuana business, and at which Harmony & Green, LLC is
allegedly headquartered. In 2015, Michael Pack also purchased on behalf of the SMP Properties, LLC
Defendants the residence at which Defendant, Rudy Saenz, was living when he was arrested in March
2017 for charges including securities fraud and trafficking of illegal drugs. Upon information and
belief, Michael Pack purchased the property in cash and provided use of the property to Saenz and
Scott Pack for use in furtherance of their fraudulent and improper conduct more fully described
herein.
2
6. Defendant SMP Properties LLC, a Colorado entity, (SMP Properties Colorado), is
a Colorado Limited Liability Company that benefitted from the fraudulent activities of its members,
and owns or owned property in Colorado, including but not limited to 12555 E. 37th Avenue, Denver,
Colorado. SMP Properties Colorado provided these premises to Defendant Harmony & Green, LLC
as a vehicle to funnel fraudulently obtained investment proceeds to its principal, Michael Pack.
Nevada Limited Liability Company that benefitted from the fraudulent activities of its members, and
owns property in Colorado, including but not limited to 4734 & 4745 Town Center Drive, Colorado
Springs, Colorado. SMP Properties Nevada provided these premises to Defendant Harmony &
Green, LLC as a vehicle to funnel fraudulently obtained investment proceeds to its principal, Michael
Pack. Defendants Scott Pack and Michael Pack are officers of SMP Properties Nevada.
Nevada and SMP Properties Colorado as if they were one entity. At this time, it is unclear which
entity (or both) was involved in the conduct alleged herein, and as a result, SMP Properties Colorado
and SMP Properties Nevada are collectively referred to herein as SMP Properties.
information and belief, holds at least three Colorado Marijuana licenses, and was the beneficiary of
the fraudulent activity herein. HGCO LLC was allegedly managed and/or 100% controlled by
10. Defendant Harmony & Green LLC (H&G) is a Colorado Limited Liability
Company owned and operated by Defendants Scott Pack and Rudy Saenz as an investment vehicle
3
JURISDICTION AND VENUE
11. This court has jurisdiction over Defendant SMP Properties Colorado because it is a
Colorado LLC, does or did business in the City and County of Denver, Colorado, and because it owns
the property located at 12555 E. 37th Avenue, Denver, CO, out of which the fraudulent scheme
alleged in this Second Amended Complaint was run. SMP Properties Colorado was a beneficiary of
Packs illegal activities which occurred in Denver Colorado. On information and belief, Scott Pack
and Michael Pack are officers and members of SMP Properties Colorado, and acted on behalf of SMP
12. This court has jurisdiction over Defendant SMP Properties Nevada because it does or
did business in Colorado Springs, Colorado, and because it owns the property located at 4734 & 4745
Town Center Drive, Colorado Springs, Colorado, out of which the fraudulent scheme alleged in this
Second Amended Complaint was run. SMP Properties Nevada was a beneficiary of Packs illegal
activities which occurred in Denver and Colorado Springs, Colorado. In addition, Scott Pack and
Michael Pack are officers and members of SMP Properties Nevada, and acted on behalf of SMP
13. This court has jurisdiction over Defendant H&G because it is a Colorado LLC and
14. This court has jurisdiction over Defendant HGCO LLC because it is a Colorado LLC
and does or did business in the City and County of Denver, Colorado.
15. This court has jurisdiction over Defendant Scott Pack, who is a Colorado resident,
because he engaged in tortious activities within the State of Colorado that are the subject of this
lawsuit.
4
16. This court has jurisdiction over Defendant Rudy Saenz, who is a Colorado resident,
because he engaged in tortious activities within the State of Colorado that are the subject of this
lawsuit.
17. This court has jurisdiction over Defendant Michael Pack because he engaged in
tortious activities and benefitted from tortious conduct in the State of Colorado and was part of the
illegal H&G enterprise that operated in Colorado. Defendant Michael Pack was the financial backer
and beneficiary of the deceptive and fraudulent practices of his co-defendants. He conducts business
18. Venue is proper in this court because the actions complained of herein occurred in
Denver, Colorado.
GENERAL ALLEGATIONS
19. On or around May 20, 2015, Plaintiff, Pierre Raygot (Raygot) and Defendant Scott
Pack (Pack) met in Los Angeles to discuss a potential business opportunity, investing in Packs
20. During the meeting, which lasted multiple hours, Mr. Pack made numerous false
statements about the opportunities that were designed to induce Raygot into investing. Pack told
Raygot that non-Colorado residents were not allowed to invest directly in marijuana businesses, but
Raygot could invest in a real estate company, which owned the warehouses in which the marijuana
21. Pack told Raygot about his plan to turn H&G into one of the biggest marijuana
conglomerates in the United States. Pack said that once cannabis was legalized at the federal level, in
5
four to five years, he would be able to sell H&G for a huge profit to a cigarette company like Philip
Morris. While this statement alone could be characterized as mere puffery, it was only the beginning
22. Raygot flew to Denver to meet with Pack and Defendant Rudy Saenz (Saenz), in
June, 2015. Raygot stayed at the residence of Saenz located at 676 Monroe Street, Denver, Colorado.
23. Unbeknownst to Raygot, the residence had been purchased by Defendant Michael
24. During this trip to Denver in June 2015, Defendants made numerous oral
misstatements of fact.
25. Pack told Raygot that for $100,000 Raygot could buy 1% of H&G, which allegedly
26. Pack represented that the company had a valuation in excess of $10,000,000 at that
time, and that he and other investors had invested significant sums themselves. Saenz and Pack
produced documents that purported to show that Pack himself had invested $2,500,000 in the
company, and Rudy Saenzs wife, Suzanne Saenz, had invested $4,000,000.
27. These representations concerning the value of and investments in H&G were false, as
28. H&G was described by Defendants as a consortium of entities under the same
management umbrella. As it turns out, Defendants ran H&G as an enterprise designed to funnel
6
29. The entity that held the Colorado marijuana cultivation licenses was Defendant,
HGCO, LLC (HGCO). Defendants represented that HGCO owned at least four marijuana grow
30. Defendants represented that the H&G consortium controlled, owned, or eventually
would own, the properties and/or the improvements on the properties in which the marijuana grow
operations would operate. Raygot was unaware that these properties actually were owned by
Defendant SMP Properties. This false representation was significant to Raygot, as he believed he
31. H&Gs alleged control and management of HGCO and the real property owned by
SMP Properties and Michael Pack were used as further inducement to get Raygot to invest.
32. Pack represented that he was the sole owner of HGCO, and further represented that
H&G was the manager of HGCO and exercised 100% control over the company.
33. For the purposes of the Colorado Marijuana Enforcement Division (MED),
Manager has a very specific meaning. Licensed marijuana businesses require that managers are
34. The MED requires that licensed businesses disclose all financial investments
immediately. Investors are background checked and fingerprinted in the same manner that managers
are.
35. Pack and Saenz were selling investment in the marijuana business manager entity to
avoid MED regulations, and representing to investors, including Plaintiffs, that such investments were
legal. The effect of this was to make the very investments they were inducing worthless, because
7
foreign investors such as Plaintiffs cannot convert their investment into equity in the manager of a
37. On June 28, 2015, Scott Pack emailed Raygot and represented non-residents cannot
own any part of the MJ Company [Defendant HGCO], but are allowed to own ancillary companies
that have a relationship to the regulated company. This is how we structured it so that you could still
own the assets without having to be a registered owner. I know its a bit confusing but this is
clean/legal way of how this must be done to make this investment possible.
38. Packs representations notwithstanding, Plaintiffs were unaware that it was contrary to
MED regulations (and Colorado state statutes) for them to be paid back from profits from the
marijuana businesses Pack was allegedly operating. Defendants falsely represented that the investment
was legal and had been structured by the #1 Regulatory/Compliance Legal Counsel, created to
avoid the excessive regulatory restrictions imposed by Colorados MED. Pack further represented
that H&G owned all of the businesses that HGCO uses in its cultivation and grow operation.
39. Plaintiffs were also unaware that Saenz and Pack were soon to be identified as figures
in an interstate marijuana trafficking ring fronted by the purportedly legal cannabis business HGCO.
40. The sales pitch was simple: invest money in H&G, your money will be returned to
you plus a healthy profit within one year, or you can choose to convert your note into equity in the
company. Defendants directly represented that within a year of Plaintiffs investment, the business
41. Virtually every aspect of the company and the investment was false.
8
42. For example, the literature presented to Plaintiffs described the company as an
operating, active income producing cannabis cultivation and infused products operation.
Enforcement Division (MED) shared with investors in 2017, Pack admitted that as of March 27,
44. On or around June 2, 2015, Saenz emailed Raygot and copied Pack. Saenz attached a
45. For example, Saenz attached a May 25, 2015 letter from Pack styled as a Memorandum
to Raygot. This Memorandum represented that the Company is in the process of constructing several
Marijuana indoor cultivation facilities at its [sic] 4 Denver locations, and anticipates first revenues
generated from this investment shall begin on Q1 of 2016. These representations were false.
46. Saenz also attached to his June 2, 2015 email a copy of H&Gs operating agreement
and a document styled as a First Amended Operating Agreement. The original operating agreement
represented that Pack had made an initial capital contribution of $30,000. The First Amended
Operating Agreement represented that Pack had contributed $545,000 in startup costs (est. to date).
The First Amended Operating Agreement also represented that someone named Michelle Penerotti
47. The First Amended Operating Agreement represented that both Pack and Ms.
48. The First Amended Operating Agreement also represented that Pack had invested:
a. $500,000 cash and note to 37th Street Partners, LLC to fund build-out of
warehouse.
9
b. Agreement to hold the licensed entity HGCO, LLC, which will be the
COMPANY.
$3,500,000).
50. The fraudulent business model also included purchase of two commercial properties
51. However, upon information and belief, H&G was merely an investment vehicle
designed to induce investment into the combined syndicate while HGCO was used to facilitate a
52. Upon further information and belief, some aspect of the H&G revenue that
Defendants misrepresented to Plaintiffs existed from legal operations was in fact ill-gotten gains from
53. Unaware of the above misrepresentations and omissions, on July 8, 2015, Pierre
54. Raygot was given a CONVERTIBLE PROMISSORY NOTE signed by Scott Pack.
55. The Note contains a conversion clause, with no mechanism for conversion, and a
10
II. To Induce Additional Investments, Defendants Make More False Statements.
56. After Raygots initial investment on July 8, 2016, Scott Pack continued to make false
statements to Raygot that were intended to induce Raygot into investing additional sums.
57. For example, on July, 25, 2015, Pack made the following representations to Raygot:
Pack: All marvelous my friend. Had a huge week. Completed merger with Standard
Hemp, and picked up Dixie Elixir and Openvape as clients.
Big wins. Did you get newsletter?
58. Upon information and belief, there was no merger completed, and there were no active
59. On or around March 3, 2016, Scott Pack and Pierre Raygot exchanged the following
Pack: High on life my friend. Was about to send word out, we received
funding for $5M. Plus others now wanted to throw in millions in debt.
So we are sailing away.
Raygot: Ah fantastic. But what about our deal ? Can I still put some cash in ?
Pack: Also met with Val last night, at first I had to reject his offer as the price
for his money was unrealistic (40%). But he came back again wanted
to start with a small traunch [sic] in exchange for me hiring one of his
partners.
Raygot: I am not sure to understand . You will take some of his investment and
you will hire one of his partners correct?
Pack: Yeah, it would begin with $300K and incrementally increase from there
every quarter, which isnt that interested as we need the money up
front, not incrementally. Our big funding comes in incrementally over
the next year. So we get stronger each month.
11
Raygot: Yes the same deal. I was thinking of 100 or 200K
Pack: I bet. Lol, you were the most expensive money we ever paid. Lol.
Deservingly, since you were really there for us when we needed it).
Raygot: Ahahah
Pack: Let me discuss with Rudy, the Cap table is much more restricted now
since all the shares have been allocated and its an act of the Board to
dilute beyond what was called out for prior to signing the deal. But
perhaps one of the other investors (like Paul Johan and Rich), would
prefer their cash out and I could slide you into their position.
Raygot: Ok let me know I should have the cash available by the end of March
it took for ever. What is the 5Ml coming from ? Is it a fund ?
investors and/or business prospects in this communication were truthful. Instead, Pack was outlining
his plan to utilize fresh investment from Raygot to pay out prior investors in what was materializing
as a Ponzi scheme.
61. On March 27, 2016, Pack and Raygot corresponded again, via Facebook Messenger:
Pack: What kind of lawyer were you looking for? We definitely have a need
for a bridge loan now to close on a piece of property that will be a
HUGE opportunity for us.
Raygot: Hi . Some familiar with the cannabis business in Cali ? Bridge loan ?
For another warehouse?
12
Pack: Another grow. A piece of property worth 1.6M that we can get for
$400k. And it will be a big producer as well.
Pack: 7
Pack: Only need it for 30-90 days. Your choice. Every month about
midmonth we get an infusion of $500,000 so the risk is virtually
nothing. What kind of percentage rate would excite you?
Raygot: I understand but two things. One I will probably not have the cash
available before the end of April. Second its not what you told me a
year ago
Raygot: On one hand I understand but on the other I fell a bit frustrated
because I had in mind that I had until June to as when I told you a bit
after the investment if I had until the end of 2015 to reinvest you said
I had one year meaning until June 2016
Pack: Ok, I remember that conversation. Lets find a win-win. Theres a few
opportunities where I would be unrestricted. Such as our California
play. I need an infusion for a gravity generator to run our facilities
completely off grid. That costs $100k each after financing. It is 85kw
and can be used at Burningman. ;0) Want to buy one that you can use
every year at Burningman for the camp and we use it the rest of the
time? :0) I can either pay back with interest or treat you like an equity
partner. Just talking out loud. We can also find ways into H&G
corporate but its more restrictions.
Raygot: I am listening
Pack: Anything outside of H&G will eventually be rolled into H&G so it all
goes to the same place. They just dont get absorbed until later down
the road
13
Raygot: I think we should speak if you can because it makes it faster to
understand the mechanism
Raygot: Ok
62. Unbeknownst to Raygot, all of the representations regarding H&G made by Pack in
this correspondence were false. The company was not fully funded as Pack represented. In fact,
other than its interests and/or access to properties owned or controlled by Defendants Michael Pack
and SMP Properties, H&G had not made any legal sales of marijuana or marijuana products at this
point in time.
63. On April 22, 2016, after confirming that H&G was still soliciting investors, Raygot
transferred $400,000 to H&G in exchange for another 1% share of H&G in his name, and an
64. The Membership Units Purchase Agreement that Pack provided to Raygot to
document the additional $400,000 investment listed H&G at a $30 million valuationthree times its
65. After the investments, Pack continued to make false statements to Raygot that were
designed to assuage Raygot and prevent him from taking legal action to recover the money he and his
66. For example, on or around July 1, 2016, via Facebook Messenger, Pack told Raygot
he could convert his debt into equity in H&G, and further assured him of his status as an equity holder
14
in the company, stating yes, if you wish to convert then you may do so. As you can see we have
already allocated the space in the cap table so either way you are safe.
67. On July 8, 2016, via Facebook Messenger, Pack assured Raygot that his investment
was safe and his right to convert the investment into equity was enforceable. He said, Pierre, Ill
sort out the docs. You have seen our cap table. The numbers are accurate. Its enforceable. Youre
68. On July 30, 2016, again in response to Raygots concern that his investment had not
been formalized by any legally binding investment document, Pack stated: I dont really know what
youre concerned about. Your investment is doing amazing and your position is secured.
69. Pack further represented that Raygots investment via convertible note had been
converted to equity in H&G, and, therefore, that Raygot was no longer entitled to receive interest
or payment on the Note that evidenced his first investment into the company. Pack stated: You
converted the note to equity so no monies are owed. I do owe you some money though because Val
70. Pack further stated, You have converted your note, that means you have an equity
interest in the company and hold the same rights as I do. There is no longer a note or interest due
because you decided to convert. But maybe Rudy [Saenz] can explain it better.
72. Afterward, Pack continued to send false financial statements and other documents,
along with making numerous additional false statements, all of which were designed to protect Packs
illegal enterprise and prevent Raygot from taking action to recover the money owed to him and his
brother.
15
73. On February 2, 2017, Pack made additional false statements about H&Gs financial
position. He told Raygot well be in good shape once we get the extraction up and the dispensary to
seek from so that we dont have to be impacted by the wholesale price. That is expected to happen
this quarter.
74. Packs false conduct and stall tactics were a carefully designed ploy to avoid Raygot
taking legal action to recover his investment, and to allow Pack to funnel money out of the H&G
enterprise for the benefit of himself, Rudy Saenz, and Packs father, Michael Pack.
IV. Michael Pack and SMP Properties Support and Participate in the Enterprise.
75. Upon information and belief, Defendant Michael Pack allowed Defendant Scott Pack
to use Michael Packs residence in Aspen to pass himself off as a Colorado resident in order to obtain
76. Upon information and belief, one of the licenses which HGCO owns is attached to
12555 East 37th Avenue, Denver, CO. That address is listed as the headquarters of H&G and HGCO.
Management of the business located at 12555 East 37th Avenue was used as an inducement to induce
77. 12555 East 37th Avenue is presently owned by SMP Properties, which is either solely
owned or jointly owned by Michael Pack and/or Scott Pack. While H&G markets itself as the
beneficial holder of the property, the true beneficiary of the lease is Michael Pack, who either owns or
78. In 2017, 12555 East 37th Avenue was raided by the DEA and local police departments
as part of a raid on an illegal marijuana trafficking ring allegedly run in part by Rudy Saenz and Scott
Pack.
16
79. Another of the properties that H&Gs enterprise leased or operated out of was located
at 4734 & 4745 Town Center Drive, Colorado Springs, Colorado. SMP Properties is the owner of
80. Two weeks prior, on March 27, 2015, SMP Properties leased the Town Center
property to H&G. Michael Pack executed the lease agreement on behalf of SMP Properties.
81. Upon information and belief, Michael Pack and SMP Properties knew of Scott Pack
and Rudy Saenzs fraudulent activities, as well as the dysfunctional nature of H&Gs business at the
time of entering into agreements whereby Michael Pack and SMP Properties would benefit from the
proceeds of fraudulently induced investments into H&G, including the investments by Plaintiffs.
82. Upon information and belief, Michael Pack provided the funding needed to purchase
the Town Center property and the property located at 12555 East 37th Avenue.
83. Michael Pack purchased the Town Center property, the property located at 12555 East
37th Avenue, and the property located at 676 Monroe Street, to assist and further Scott Pack and
84. Michael Pack and SMP Properties have benefitted from the diversion of H&G
85. On June 26, 2017, Michael Pack caused SMP Properties to sell the property located at
676 Monroe St, Denver, CO to Kyle Kolb for $900,000. Mr. Kolb is a former investor in H&G and
the sale price appears to have been at a significant discount to the propertys market value. Upon
information and belief, the divestiture of this asset from the HG enterprise was done to allow Michael
Pack to pay off an aggrieved former H&G investor and avoid potential legal action against the HG
companies.
17
86. Upon information and belief, Michael Pack was further involved in the planning and
87. As it noted, Defendants representations about their enterprise were false. There had
been no investments by Pack or Saenz; the enterprise apparently was violative of MED regulations
(and Colorado state statutes); H&G did not own any property; the Raygots apparently had invested in
a shell company that held no assets; all proceeds of their investments had been funneled to Pack,
Saenz, and Michael Pack, rather than to growth of a company; and rather than invest the Raygots
funds in the real estate company, the money was likely used to pay earlier investors in the company or
funneled to the insiders, Michael Pack, Scott Pack , and Rudy Saenz -- the quintessential Ponzi scheme.
88. Eventually, Pack and Saenz (along with others) were indicted for various state law
violations. Pack was charged with 11 counts, all felonies: Pattern of racketeering under the Colorado
Organized Crime Control Act; conspiracy/endeavoring under COCCA; two counts of conspiracy to
cultivation of marijuana more than 30 plants; two counts of securities fraud; money laundering;
89. Although Pack had falsely represented the enterprises financial success, apparently
90. On or about September 2, 2017, after Plaintiffs had initiated this action, an open letter
to investors was posted to H&Gs website, apologizing for the conduct of Scott Pack and Rudy Saenz,
1
The full text appears at Defendant H&Gs website: http://www.harmonyandgreen.com/
18
a. You were defrauded by the CEO, Scott Pack, and his partner, Rudy Saenz.
b. Your money was not in safe hands. It was being used flagrantly and
incompetently. At best your money was in the hands of two greedy idiots. At
worst it was in the hands of two criminals.
c. Many at H&G obviously knew what was going on behind the scenes
CAUSES OF ACTION
91. Plaintiffs hereby incorporate the allegations set forth in the preceding paragraphs, as
92. At all relevant times, Defendants Pack, Saenz, Michael Pack, HGCO, and SMP
Properties were persons within the meaning of Colo. Rev. Stat. 18-17-103(4).
93. At all relevant times, H&G (Harmony & Green, LLC) was an enterprise within the
94. At all relevant times, Pack, Saenz, Michael Pack, HGCO, and SMP Properties were
95. As alleged above, beginning in 2015, Defendants Pack, Saenz, Michael Pack, HGCO,
and SMP Properties concocted, orchestrated, and directed the fraudulent and illicit scheme set forth
in this Second Amended Complaint through a pattern of racketeering activity as defined in Colo. Rev.
Stat. 18-17-103(3), (5), including numerous incidences of civil theft, mail fraud, and wire fraud.
96. Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties conduct
constitutes racketeering activity under Colo. Rev. Stat. 18-17-103(5)(b)(II), because such acts
19
permitted Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties to obtain and/or retain
money by false pretenses or misrepresentations with the intent to permanently deprive Plaintiffs of
their property, and thereby constituted theft in violation of Colo. Rev. Stat. 18-4-401.
97. Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties committed wire
fraud in violation of 18 U.S.C. 1343 as listed under 18 U.S.C. 1961(B) by making false statements to
Plaintiff Pierre Raygot by use of wire and mail in order to get him to invest in H&G. As described
above, Pack made numerous false statements to Raygot by use of email and Facebook Messenger.
Pack also made numerous misstatements over the telephone wires. And Saenz and Pack sent
98. The emails, Facebook Messages, and other computer activity conducted by
Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties also constitutes racketeering
activity under Colo. Rev. Stat. 18-17-103(5)(b)(III), because such acts involved access of computers,
computer networks, or computer systems for the purpose of devising or executing a scheme or artifice
to defraud, and/or to obtain and/or retain money by false pretenses or misrepresentations, thereby
99. Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties conduct
constitutes racketeering activity under Colo. Rev. Stat. 18-17-103(5)(b)(XIII) because such acts
constitute offenses relating to controlled substances in violation of Colo. Rev. Stat. 18-18-414.
100. Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties conduct
constitutes racketeering activity under Colo. Rev. Stat. 18-17-103(5)(b)(XIV) because Defendants
Pack, Saenz, Michael Pack, HGCO, and SMP Properties made numerous material misrepresentations
20
of fact and/or material omissions to induce Plaintiffs investment into the H&G enterprise in violation
101. These predicate acts were performed by, at the direction of, and/or were foreseeable
to the Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties, and conducted for the
purpose of using subterfuge, deceit, misinformation, and dishonest means to acquire Plaintiffs
property.
102. Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties committed and
conspiracy, including but not limited to the acts described in this Second Amended Complaint.
103. Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties pattern of
racketeering consisted of multiple acts of racketeering by Defendants Pack, Saenz, Michael Pack,
HGCO, and SMP Properties. The activities of Defendants Pack, Saenz, Michael Pack, HGCO, and
SMP Properties were interrelated, not isolated, and were perpetrated for the same or similar purpose
by the same persons. The activities occurred in Colorado within the last ten years.
104. The conduct of Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties
105. Plaintiffs property has been injured as a result of the enterprises violations of
COCCA.
106. Plaintiffs have suffered damages to be proven at trial, but believed to be in excess of
$500,000.
21
107. Plaintiffs are entitled to damages proximately caused by the violation of COCCA by
Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties. Plaintiffs are entitled to treble
damages, interest, and reasonable attorneys fees and costs under COCCA.
108. Pursuant to Colo. Rev. Stat. 18-17-103, Plaintiffs are entitled to treble damages,
109. The acts of Defendants Pack, Saenz, Michael Pack, HGCO, and SMP Properties were
attended by circumstances of fraud, malice, or willful and wanton conduct entitling Plaintiffs to
and/or material omissions to induce Plaintiffs investment into the H&G enterprise.
112. Defendant Pack conflated H&G and HGCO freely, and induced Plaintiffs to invest in
H&G with the promise that they would be paid back within a year from H&G profits that did not
exist.
113. Defendants intentionally conflated these two entities to create the impression that the
114. Defendants misrepresented the legality of their enterprise despite knowing that
managers of cannabis businesses in Colorado are required to be registered and licensed with
Colorados MED.
22
115. Defendants false statements were material to Plaintiffs and induced them into
119. Plaintiffs were unaware at the time of their investment that Defendants
122. Plaintiffs have been damaged in an amount to be proven at trial, which will include
123. The acts of Defendants Pack and Saenz were attended by circumstances of fraud,
malice, or willful and wanton conduct entitling Plaintiffs to exemplary damages under Colo. Rev. Stat.
13-21-102(1)(a).
124. Plaintiffs re-allege and incorporate by reference the preceding paragraphs as though
23
126. As described in the Second Amended Complaint, Defendants knowingly obtained and
exercised control over Plaintiffs property by deception and concealing of or misrepresenting material
127. Defendants acted with the intent to permanently deprive Plaintiffs of their property.
128. Defendants knowingly and wrongfully obtained control of the assets of Plaintiffs
without authorization.
129. Defendants misappropriated Plaintiffs assets, through the acts described above, for
themselves.
130. Despite demands, Defendants have refused to return such funds and assets.
131. Defendants committed civil theft, and as a direct and proximate result, the Plaintiffs
132. Pursuant to Colo. Rev. Stat. 18-4-405, Plaintiffs are entitled to treble damages, plus
133. Plaintiffs re-allege and incorporate by reference the preceding paragraphs as though
and/or material omissions to induce Plaintiffs investment into the H&G enterprise.
135. Defendants engaged in the sale of securities as that term is defined under the
24
136. Defendants failed to register the equity interest in H&G or any of the entities owned
misrepresentations and omissions to Plaintiffs, made to induce Plaintiffs investment in the securities
at issue.
138. Defendants knew that there was a substantial likelihood that a reasonable investor
139. Plaintiffs directly relied on the misrepresentations and omissions of Defendants, and
such conduct by Defendants did in fact induce Plaintiffs investment into the securities at issue.
140. Each individual Defendant acted with knowledge of the conduct of their co-
Defendants and rendered substantial assistance to such conduct, including Michael Pack and SMP
Properties, who funded real estate acquisitions with the purpose of furthering the fraudulent scheme
141. At all relevant times, Michael Pack was an officer of SMP Properties, and had the
ability to control, either directly, or indirectly, the conduct of his son, Scott Pack.
144. Plaintiffs are entitled to statutory remedies, including but not limited to attorneys
fees and costs and the return of their investment, with statutory interest.
25
FIFTH CLAIM FOR RELIEF
Civil Conspiracy
(Against all Defendants)
145. Plaintiffs hereby incorporate the allegations set forth in the preceding paragraphs, as
146. Defendants, in the course of their business, occupation, and/or vocation agreed and
conspired with each other to accomplish a goal through unlawful means. The goal included
fraudulently inducing investors to invest in their company, which benefitted all Defendants in the very
least through financing HGCO, LLC and remunerating the LLCs and Michael Pack with
rent payments, and at the worst, funding Rudy Saenz and Scott Packs interstate drug trafficking ring.
147. One or more unlawful acts were performed to accomplish this goal including (a)
making numerous false statements of fact, as described herein this Second Amended Complaint to
fraudulently induce investments into H&G; (b) repaying earlier investors with new investments; (c)
receiving investments, funneling them through a series of shell companies, and profiting from
investments that cannot be legally used to fund Colorado licensed marijuana companies.
148. As a direct and proximate result of the conspiracy alleged in this Second Amended
Complaint, Plaintiffs have been injured as described above in an amount to be determined at trial.
149. Plaintiffs incorporate the allegations set forth in the preceding paragraphs, as if fully
150. Defendants benefitted from their unlawful acts through the fraudulent inducement of
investments into a shell company (H&G). It would be inequitable and unconscionable for Defendants
26
to be permitted to retain the benefits of these investments, which were conferred by the Plaintiffs and
retained by Defendants.
151. Defendants Scott Pack and Rudy Saenz, individually and through their LLCs HGCO
and Harmony and Green, LLC fraudulently induced Plaintiffs to invest money into their companies.
152. All the Defendants retained the ill-gotten monies of Plaintiffs, and intended to
153. Defendants Scott Pack and/or Michael Pack, through their alter ego companies, SMP
Properties, purchased and owned the property at which Rudy Saenz lived on Monroe Street, in
Denver, Colorado.
154. Defendants Scott Pack and Michael Pack, through their alter ego companies, SMP
Properties, own the East 37th Avenue property in which Scott Pack, Rudy Saenz and their drug
155. All Defendants benefited from their fraud and theft, and continue to benefit from
their actions.
156. Plaintiffs are entitled to have returned to each of them the amount of such investments
as damages or restitution, and any amounts of Plaintiffs investment that were transferred to any of
157. Plaintiffs incorporate the allegations set forth in the preceding paragraphs, as if fully
27
158. Defendants Scott Pack, Rudy Saenz, HGCO, and H&G concealed material facts
described in this Second Amended Complaint from the Plaintiffs, including but not limited to the
facts that (a) Harmony & Green, LLC and Harmony & Green the d/b/a of HGCO were not the same
company; (b) that it was illegal for the Plaintiffs to be repaid out of marijuana profits, and that to do
so would put their investment in jeopardy;(c) that Rudy Saenz was engaged in interstate drug
trafficking ring; (d) that the list of shell companies that H&G was listed as a manager of was nothing
but a series of shell companies owned by Rudy Saenz, Scott Pack, and Rudy Saenz family members;
(e) that 12555 East 37th Avenue, was used as an illegal grow operation, and is the business address of
many of the businesses managed by the company that the Plaintiffs were induced into investing in.
159. As described above, Pack made numerous false statements designed to conceal
160. These facts were material to Plaintiffs and ought to have been disclosed in equity and
good conscience.
reasonably relied on, and had no reason or opportunity to question, the truth and accuracy of the
statements and documents that were supplied by the Defendants in order to induce the Plaintiffs to
162. Defendants representations were made with intent that they be acted upon.
163. As a result of Defendants acts Plaintiffs were injured as described herein and damaged
28
EIGHTH CLAIM FOR RELIEF
Violations of the Colorado Consumer Protection Act
(Scott Pack, Rudy Saenz, HGCO LLC, HARMONY & GREEN LLC)
164. Plaintiffs hereby incorporate the allegations set forth in the preceding
165. Defendants engaged in an unfair and deceptive trade practice as defined in C.R.S. 6-
1-105(1).
166. The practice occurred in the course of Defendants business activities as a soliciting
shell company for a series of shell companies that funneled money to a licensed Colorado marijuana
business.
167. The practice significantly impacts the public as actual or potential consumers of the
Defendants goods, services or property, as it undermines the perception of the Colorado marijuana
168. Plaintiffs suffered injury in fact to a legal protected interest: their $500,000.
170. Plaintiffs hereby incorporate the allegations set forth in the preceding paragraphs, as
171. Scott Pack and Rudy Saenz, as majority members of H&G, owed a fiduciary duty to
172. Pierre Raygot and Christophe Raygot were minority members of the LLC.
29
173. Defendants breached their fiduciary duty to Plaintiffs by fraudulently taking their
money with no return, or intent to return, and comingling the Raygots lawful investment with illegal
175. Defendants were the actual and proximate cause of the Plaintiffs damages.
176. Plaintiffs hereby incorporate the allegations set forth in the preceding paragraphs, as
177. Defendants have wrongfully taken and exercised control and dominion over Plaintiffs
178. Defendants have converted Plaintiffs for their own benefit to the exclusion of
Plaintiffs.
179. Despite demands, Defendants have refused to return such funds and assets.
180. Plaintiffs have suffered damages as a result of the acts of such conversion in an amount
to be proven at trial.
JURY DEMAND
WHEREFORE, the Plaintiffs request that the judgment be entered on their Second
Amended Complaint against Defendants and in favor of the Plaintiffs on all claims for relief as
follows:
30
a. Awarding Plaintiffs actual and compensatory damages in the amount to be
determined at trial;
Complaint;
c. Awarding Plaintiffs damages under Colo. Rev. Stat. 11-51-604; Colo. Rev.
Stat. 18-17-103, Colo. Rev. Stat. 18-4-405, and Colo. Rev. Stat. 6-4-
102(1)(a);
f. Awarding pre- and post-judgment and moratory interest, costs incurred and
g. Granting such other and further relief as the Court may deem just and
proper.
31
Dated this 6th day of November, 2017.
Respectfully submitted,
/s/Henry M. Baskerville
Henry M. Baskerville, Atty. Reg. #49431
1900 Wazee Street, Suite 300
Phone Number: (303) 565-8066
Fax Number: (303) 295-9701
hbaskerville@fortislawpartners.com
sdehoff@fortislawpartners.com
32
CERTIFICATE OF SERVICE
I hereby certify that on this day of November 6, 2017, I caused the foregoing SECOND
AMENDED COMPLAINT to be filed via ICCES, which will send notification of the filling upon
the following:
Max S. Stich
Tiemeier & Stich, P.C.
1000 East 16th Avenue
Denver, CO 80218
mstich@tslawpc.com
s/Patricia Foos
Patricia Foos
33