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DATE FILED: November 6, 2017 9:21 PM

DISTRICT COURT, CITY AND COUNTY OF DENVER,


FILING ID: D6F8409D314BA
COLORADO CASE NUMBER: 2017CV31269
1437 Bannock Street
Denver, CO 80202

PIERRE RAYGOT and CHRISTOPHE RAYGOT


Plaintiffs,

v.

SCOTT PACK; RUDY SAENZ; R. MICHAEL PACK; SMP


PROPERTIES, LLC, a Colorado entity; SMP PROPERTIES,
LLC, a Nevada entity; HGCO, LLC, a Colorado entity;
HARMONY & GREEN, LLC, a Colorado entity, COURT USE ONLY
Defendants.

Attorneys for Plaintiffs:


FORTIS LAW PARTNERS, LLC Case No.: 2017CV31269
Henry M. Baskerville, Atty. Reg. #49431
Stephen DeHoff, Atty Reg. #39952 Div.: 275
1900 Wazee Street, Suite 300
Phone Number: (303) 565-8066
Fax Number: (303) 295-9701
hbaskerville@fortislawpartners.com
sdehoff@fortislawpartners.com

SECOND AMENDED COMPLAINT

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

Harmony & Green LLC, and allege as follows:

PARTIES

1. Plaintiff Pierre Raygot is a resident of Thailand.

2. Plaintiff Christophe Raygot is a resident of Portugal.


3. Defendant Scott Pack, at all times related to this Second Amended Complaint, was a

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

in the SMP Properties LLC Defendants.

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

Colorado Cannabis business.

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.

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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.

7. Defendant SMP Properties LLC, a Nevada entity, (SMP Properties Nevada), is a

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.

8. As part of their ongoing fraudulent enterprise, Defendant conflated SMP Properties

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.

9. Defendant HGCO LLC is a Colorado Limited Liability Company, which, upon

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

Harmony & Green, LLC.

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

through which Plaintiffs were fraudulently induced to invest.

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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

Properties Colorado in their fraudulent conduct alleged herein

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

Properties Nevada in their fraudulent conduct alleged herein.

13. This court has jurisdiction over Defendant H&G because it is a Colorado LLC and

does or did business in the City and County of Denver, Colorado.

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.

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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

in the jurisdiction through SMP Properties.

18. Venue is proper in this court because the actions complained of herein occurred in

Denver, Colorado.

GENERAL ALLEGATIONS

I. Defendants Make Numerous False Statements to Raygot to Induce Him to Invest.

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

marijuana enterprise, H&G.

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

grow would operate.

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

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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

of Packs fraudulent conduct.

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

Pack, Scott Packs father, on behalf of SMP Properties.

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

owned and managed marijuana companies in California and Colorado.

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

were virtually every other representation made by Pack and Saenz.

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

investors money into Defendants pockets.

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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

licenses and that the licenses had significant value.

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

would be investing in a company that had actual real estate assets.

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

background checked, fingerprinted, and badged.

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

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foreign investors such as Plaintiffs cannot convert their investment into equity in the manager of a

cannabis company, despite Pack and Saenzs promises to the contrary.

36. In an infographic provided to Raygot, Defendants list H&G as benefitting from or

owning entities which it cannot legally benefit from.

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

plan of H&G was to pay 100% principal back to investors.

41. Virtually every aspect of the company and the investment was false.

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42. For example, the literature presented to Plaintiffs described the company as an

operating, active income producing cannabis cultivation and infused products operation.

43. But in correspondence to Colorados Department of Revenue, Marijuana

Enforcement Division (MED) shared with investors in 2017, Pack admitted that as of March 27,

2017, HGCO had yet to make its first sale of product.

44. On or around June 2, 2015, Saenz emailed Raygot and copied Pack. Saenz attached a

number of documents to this email.

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

also had invested $545,000 in capital costs.

47. The First Amended Operating Agreement represented that both Pack and Ms.

Penerotti had invested an adjusted capital contribution of $550,000.

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.

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b. Agreement to hold the licensed entity HGCO, LLC, which will be the

licensed entity with the state of Colorado initially.

c. Agreement to license genetics, and other IP from HGCO to the

COMPANY.

d. Agreement to Fund build-out of remainder of warehouse space (est.

$3,500,000).

49. These representations also were false.

50. The fraudulent business model also included purchase of two commercial properties

owned or financed by Defendants Michael Pack and SMP 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

criminal drug trafficking organization.

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

a criminal enterprise trafficking in marijuana across state lines.

53. Unaware of the above misrepresentations and omissions, on July 8, 2015, Pierre

Raygot transferred $100,000 to H&G.

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

valuation of the company at $10,000,000.

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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

clients as identified by Pack.

59. On or around March 3, 2016, Scott Pack and Pierre Raygot exchanged the following

correspondence via Facebook Messenger:

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.

Raygot: Ah ok that was my question

Pack: How much would you be interested in investing? Im assuming you


prefer equity?

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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 ?

Pack: Is [sic] a private company from Colorado

60. Unbeknownst to Raygot, none of the substantive representations concerning H&Gs

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:

Raygot: Hi Scott Happy Easter ! I remember sending you a message about


getting the details of a lawyer but I cannot find it anywhere did you
receive it ? And can you tell me about getting more involved in H&G
?

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?

Pack: Do you need an attorney who hasnt represented us so there wouldnt


be a conflict?

Raygot: No it can be your attorney

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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.

Raygot: So you will have 4 growing spaces ?

Pack: 7

Raygot Wow I must have missed a step.

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

Pack: Or I may be open to break off another percentage point of our


company. Im sorry what did I tell you when youre [sic] ago?
Remember that now that we are funded I am much more restricted on
how I can utilize equity in the company because it all requires board
approval.

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

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Raygot: I think we should speak if you can because it makes it faster to
understand the mechanism

Pack: If it were me Id straddle the investment. Put half money in CO and


half in CA just to cover risk. Viber?

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

additional 1% share in his brother, Plaintiff, Christophe Raygots name.

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

valuation from less than a year before.

III. Defendants Continue Making False Statements to Conceal Their Enterprise.

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

brother had invested.

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

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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

safe. Just give me some time.

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

has put in some money.

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.

71. Again, these representations were false, as Pack well knew.

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.

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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

the marijuana licenses owned by HGCO.

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

Plaintiffs investment into H&G.

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

financed the purchase of the building.

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.

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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

that property and purchased it on April 10, 2015.

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

Rudy Saenzs fraudulent enterprise.

84. Michael Pack and SMP Properties have benefitted from the diversion of H&G

investment funds to themselves.

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.

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86. Upon information and belief, Michael Pack was further involved in the planning and

funding of the fraudulent enterprise.

V. The Fraudulent Enterprise Comes Tumbling Down.

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

distribute or possess or intent to distribute 50 pounds or more of marijuana; conspiracy to commit

cultivation of marijuana more than 30 plants; two counts of securities fraud; money laundering;

forgery; tax evasion; and attempt to influence a public official.

89. Although Pack had falsely represented the enterprises financial success, apparently

now the enterprise is defunct, and Plaintiffs investments are worthless.

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,

and stating the following1:

1
The full text appears at Defendant H&Gs website: http://www.harmonyandgreen.com/
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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

d. We (H&G) are in possession of an email from Mr. Pack asking us to destroy


Harmony & Green files and not talk to police unless subpoenaed.

CAUSES OF ACTION

FIRST CLAIM FOR RELIEF


Colorado Organized Crime Control Act
(Against All Defendants except Harmony & Green, LLC)

91. Plaintiffs hereby incorporate the allegations set forth in the preceding paragraphs, as

if fully set forth herein.

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

meaning of Colo. Rev. Stat. 18-17-103(2).

94. At all relevant times, Pack, Saenz, Michael Pack, HGCO, and SMP Properties were

associated with H&G.

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

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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

additional false statements by email and mail.

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

constituting computer crimes under Colo. Rev. Stat. 18-5.5-102.

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

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of fact and/or material omissions to induce Plaintiffs investment into the H&G enterprise in violation

of Colo. Rev. Stat. 11-51-501.

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

caused to be committed a series of overt predicate acts of racketeering in furtherance of their

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

constitutes racketeering activity as defined in Colo. Rev. Stat. 18-17-103(3), (5).

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.

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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,

plus interest, attorneys fees, and costs.

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

exemplary damages under Colo. Rev. Stat. 13-21-102(1)(a).

SECOND CLAIM FOR RELIEF


Fraud And/Or Fraudulent Inducement
(Scott Pack, Rudy Saenz, HGCO LLC, Harmony & Green, LLC)

110. Plaintiffs re-allege and incorporate by reference the preceding paragraphs as

though fully set forth herein.

111. As alleged above, Defendants made numerous material misrepresentations of fact

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

valuable marijuana licenses owned by HGCO were an asset of H&G.

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.

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115. Defendants false statements were material to Plaintiffs and induced them into

investing in the H&G enterprise.

116. Said representations were representations as to material fact.

117. Said representations were false when made.

118. Defendants knew the representations were false when made.

119. Plaintiffs were unaware at the time of their investment that Defendants

representations were false.

120. In reliance on Defendants false representations, Plaintiffs were induced to invest

$500,000 in H&G. Plaintiffs reliance was justified.

121. Plaintiffs $500,000 investment is now worthless.

122. Plaintiffs have been damaged in an amount to be proven at trial, which will include

the loss of their $500,000.

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).

THIRD CLAIM FOR RELIEF


Civil Theft
(Against all Defendants)

124. Plaintiffs re-allege and incorporate by reference the preceding paragraphs as though

fully set forth herein.

125. This claim for relief is made pursuant to C.R.S. 18-4-405.

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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

facts known to Defendants but not known to Plaintiffs.

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

have incurred damages in an amount to be proven at trial.

132. Pursuant to Colo. Rev. Stat. 18-4-405, Plaintiffs are entitled to treble damages, plus

interest, attorneys fees, and costs.

FOURTH CLAIM FOR RELIEF


Violation of Colorado Securities Act, C.R.S. 11-51-101 et seq.
(All Defendants)

133. Plaintiffs re-allege and incorporate by reference the preceding paragraphs as though

fully set forth herein.

134. As alleged above, Defendants made numerous material misrepresentations of fact

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

Colorado Securities Act.

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136. Defendants failed to register the equity interest in H&G or any of the entities owned

or controlled by the H&G entities.

137. Further, Defendants engaged in fraudulent conduct, including material

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

would consider the representations and misrepresentations made by Defendants to be important in

making an investment decision.

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

of Pack, Saenz and the rest of the H&G enterprise.

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.

142. Plaintiffs have been damaged by the misconduct of Defendants.

143. Defendants conduct violated Colo. Rev. Stat. 11-51-501.

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.

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FIFTH CLAIM FOR RELIEF
Civil Conspiracy
(Against all Defendants)

145. Plaintiffs hereby incorporate the allegations set forth in the preceding paragraphs, as

if fully set forth herein.

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.

SIXTH CLAIM FOR RELIEF


Unjust Enrichment
(All Defendants)

149. Plaintiffs incorporate the allegations set forth in the preceding paragraphs, as if fully

set forth herein.

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

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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

permanently deprive them of their monies.

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

trafficking operation, allegedly operated.

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

the individual or entity defendants should be disgorged.

SEVENTH CLAIM FOR RELIEF


Fraudulent Concealment
(Scott Pack, Rudy Saenz, HGCO LLC, HARMONY & GREEN LLC)

157. Plaintiffs incorporate the allegations set forth in the preceding paragraphs, as if fully

set forth herein.

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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

Defendants fraudulent enterprise.

160. These facts were material to Plaintiffs and ought to have been disclosed in equity and

good conscience.

161. Plaintiffs were ignorant of Defendants fraudulent concealment. Plaintiffs thus

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

invest in their shell company.

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

in the amount to be proven at trial.

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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

paragraphs, as if fully set forth herein.

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

industry and as potential consumers of HGCOs legal marijuana.

168. Plaintiffs suffered injury in fact to a legal protected interest: their $500,000.

169. Defendants practice caused Plaintiffs injury, in an amount to be determined at trial.

NINTH CLAIM FOR RELIEF


Breach of Fiduciary Duty
(Against Scott Pack and Rudy Saenz)

170. Plaintiffs hereby incorporate the allegations set forth in the preceding paragraphs, as

if fully set forth herein.

171. Scott Pack and Rudy Saenz, as majority members of H&G, owed a fiduciary duty to

the minority members of the LLC.

172. Pierre Raygot and Christophe Raygot were minority members of the LLC.

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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

drug trafficking profits, as well as general mismanagement of the invested funds.

174. Plaintiffs suffered damages as a result of Defendants breach.

175. Defendants were the actual and proximate cause of the Plaintiffs damages.

TENTH CLAIM FOR RELIEF


Conversion
(Against All Defendants)

176. Plaintiffs hereby incorporate the allegations set forth in the preceding paragraphs, as

if fully set forth herein.

177. Defendants have wrongfully taken and exercised control and dominion over Plaintiffs

assets without cause of legal justification.

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

Plaintiffs hereby demand a trial by jury on all issues so triable.

PRAYER FOR RELIEF

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:
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a. Awarding Plaintiffs actual and compensatory damages in the amount to be

determined at trial;

b. Requiring Defendants to make full restitution of all monies wrongfully

obtained as a result of the conduct described in the Second Amended

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-

114(1) & (2);

d. Awarding Plaintiffs treble damages pursuant to Colo. Rev. Stat. 18-17-103

and Colo. Rev. Stat. 18-4-405;

e. Awarding Plaintiffs exemplary damages under Colo. Rev. Stat. 13-21-

102(1)(a);

f. Awarding pre- and post-judgment and moratory interest, costs incurred and

reasonable attorneys fees as authorized by law; and

g. Granting such other and further relief as the Court may deem just and

proper.

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Dated this 6th day of November, 2017.

Respectfully submitted,

FORTIS LAW PARTNERS, LLC

/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

Attorneys for Plaintiffs

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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

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