2021-09-28 sec-litreleases litigation_release 66 KB 2,638 chars

SEC v. C3 International, Inc.; Steele Clarke Smith III; and Theresa Smith, No. LR-25231, Central District of California (Sept. 28, 2021) — Press Release

raw: C3 International, Inc., Steele Clarke Smith III and Theresa Smith

C3 International, Inc., Steele Clarke Smith III and Theresa Smith, No. LR-25231 (Sept. 28, 2021)

Caption
SEC v. C3 International, Inc, et al.
Source PDF JSON
summary

The SEC charged C3 International Inc., its CEO Steele Clarke Smith III, and President Theresa Smith with securities fraud that duped at least 40 investors of roughly $2 million, and is seeking permanent injunctions, disgorgement and officer‑and‑director bans.

paragraph

The SEC filed a complaint against California cannabis firm C3 International, Inc., its CEO Steele Clarke Smith III, and President Theresa Smith, alleging they defrauded at least 40 investors of about $2 million between October 2011 and November 2019. The fraud involved false claims that the company’s Idrasil pill was patented, insured and that investor funds would be used for business purposes, while omitting Smith’s prior conviction and misappropriating over $1 million for personal living expenses. The defendants are charged with violations of Sections 5 and 17(a) of the Securities Act, Section 10(b) and Rule 10b‑5 of the Exchange Act, with Theresa Smith also charged with aiding and abetting, and the SEC seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties and bans on serving as officers or directors.

narrative

The Securities and Exchange Commission brought a civil action against C3 International Inc., a California‑based cannabis company, its chief executive Steele Clarke Smith III, and the company’s president, Theresa Smith. Between October 2011 and November 2019 the trio allegedly lured at least 40 investors into contributing roughly $2 million by falsely portraying the company’s cannabis pill, Idrasil, as patented, patent‑pending, trademarked and reimbursable by most insurance carriers. They also claimed the capital would be used for legitimate business purposes while concealing Smith’s prior conviction for conspiracy to manufacture marijuana plants. Over $1 million of the raised funds were reportedly diverted to the Smiths’ personal living expenses. The SEC alleges violations of Sections 5 and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b‑5, with Theresa Smith additionally charged with aiding and abetting. The commission is seeking permanent injunctions, disgorgement with prejudgment interest, civil penalties and bans on the Smiths from serving as officers or directors, though the case remains pending.

Enriched metadata

Scheme
corporate-fraud (95%)
Court
Central District of California
Victim loss
$2,000,000
Victims
40
Entity
C3 International, Inc.
CIK
0001819864
Classified corporate-fraud(confidence 95%). EDGAR detection: forms 10-K/10-Q/8-K· recall 56% / precision 8%. detection rule →
Statutes
Sections 5 and 17(a) of the Securities ActSections 5 and 17(a) of the Securities ActSection 10(b) of the Securities Exchange ActRule 10b-5
Parties
Securities and Exchange CommissionC3 International, Inc.Steele Clarke Smith IIITheresa Smith
Keywords
smithsteele clarkeclarke smiththeresa smithsecuritiessteeleclarkeiiitheresasec'sinternationalincinvestorcannabis companysecurities exchange

Exhibits & Attached Documents (1)

Extracted insights

Dollar amounts 2
  • $2.00M $2 million $1M–$10M
  • $1.00M $1 million $1M–$10M
Entities 8
  • company a california-based cannabis company
  • company c3 international, inc.
  • company california-based cannabis company
  • company ceo of c3 international, inc.
  • company president of c3 international, inc.
  • agency Securities and Exchange Commission
  • person steele clarke smith iii
  • person theresa smith
Triples 83
  • SEC charged C3 International, Inc., Steele Clarke Smith III and Theresa Smith
  • C3 International, Inc. scammed at least 40 investors
  • C3 International, Inc. is California-based cannabis company
  • Steele Clarke Smith III is CEO
  • Theresa Smith is President
  • SEC filed No. 21-civ-1586
  • SEC filed September 28, 2021
  • SEC charged C3 International, Inc., Steele Clarke Smith III and Theresa Smith
  • C3 International, Inc. scammed at least 40 investors
  • C3 International, Inc. is California-based cannabis company
  • Steele Clarke Smith III is CEO
  • Theresa Smith is President
  • SEC filed No. 21-civ-1586
  • SEC filed September 28, 2021
  • SEC charged C3 International, Inc., Steele Clarke Smith III and Theresa Smith
  • C3 International, Inc. scammed at least 40 investors
  • C3 International, Inc. is a California-based cannabis company
  • Steele Clarke Smith III is CEO of C3 International, Inc.
  • Theresa Smith is President of C3 International, Inc.
  • SEC filed No. 21-civ-1586
  • SEC filed September 28, 2021
  • SEC charged C3 International, Inc., Steele Clarke Smith III and Theresa Smith
  • C3 International, Inc. scammed at least 40 investors out of approximately $2 million
  • SEC filed Securities and Exchange Commission v. C3 International, Inc., Steele Clarke Smith III and Theresa Smith, No. 21-civ-1586 (C.D. CA filed September 28, 2021)
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III and Theresa Smith
  • C3 International, Inc., Steele Clarke Smith III and Theresa Smith scammed at least 40 investors
  • C3 International, Inc., Steele Clarke Smith III and Theresa Smith scammed approximately $2 million
  • SEC filed Securities and Exchange Commission v. C3 International, Inc., Steele Clarke Smith III and Theresa Smith
  • C3 International, Inc. is California-based cannabis company
  • Steele Clarke Smith III is CEO
  • Theresa Smith is President
  • C3 International, Inc. charged with fraud
  • Steele Clarke Smith III charged with fraud
  • Theresa Smith charged with fraud
  • C3 International, Inc. scammed at least 40 investors
  • C3 International, Inc. lost approximately $2 million
  • SEC filed complaint September 28, 2021
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith
  • SEC charged C3 International, Inc., Steele Clarke Smith III and Theresa Smith
  • C3 International, Inc., Steele Clarke Smith III and Theresa Smith scammed at least 40 investors
  • C3 International, Inc., Steele Clarke Smith III and Theresa Smith scammed approximately $2 million
  • Securities and Exchange Commission filed No. 21-civ-1586
  • Litigation Release No. 25231 dated September 28, 2021
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
  • SEC charged C3 International, Inc., Steele Clarke Smith III, and Theresa Smith with fraud
  • C3 International, Inc., Steele Clarke Smith III, and Theresa Smith scammed at least 40 investors out of approximately $2 million
PDF (from attached: complaint)
Securities Fraud and Misappropriation by C3 International, Inc. and Its Officers · Source
Text layers
Extracted body text (2,638c) 
SEC Charges California Cannabis Company, CEO and President with Fraud Litigation Release No. 25231 / September 28, 2021 Securities and Exchange Commission v. C3 International, Inc., Steele Clarke Smith III and Theresa Smith, No. 21-civ-1586 (C.D. CA filed September 28, 2021) The SEC today charged a California-based cannabis company, along with its CEO and President, with scamming at least 40 investors out of approximately $2 million. According to the SEC's complaint, from October 2011 through November 2019, C3 International, Inc. (C3), based in Garden Grove, California, and its CEO, Steele Clarke Smith III, deceived investors through numerous material misrepresentations and omissions regarding the company's business and its cannabis pill called Idrasil. Specifically, the complaint alleges that on C3's and Idrasil's websites, in investor offering materials, on social media, and in investor communications, C3 through Mr. Smith misrepresented, among other things, that Idrasil was patented or patent-pending or trademarked, that most insurance companies reimbursed for Idrasil, and that investor funds would be used for business purposes. C3 and Mr. Smith also allegedly made statements about Mr. Smith's background, education and legal history, but omitted the material fact of his prior criminal conviction for conspiracy to manufacture marijuana plants. The complaint further alleges that Mr. Smith's wife and C3's President, Theresa Smith, aided and abetted Mr. Smith's and C3's securities fraud violations. The Smiths allegedly misappropriated over $1 million of investor funds to pay for their personal living expenses. The SEC's complaint, filed in the United States District Court for the Central District of California, charges Steele Clarke Smith III and C3 with violating the registration and antifraud provisions of Sections 5 and 17(a) of the Securities Act of 1933 ("Securities Act"), and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. It also charges Theresa Smith with violating the registration provisions of Section 5 of the Securities Act and aiding and abetting Mr. Smith's and C3's securities fraud violations. The SEC's complaint seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and officer and director bars against the Smiths. The SEC's investigation was conducted by Stephen T. Kaiser and Elizabeth Marshall Anderson, with assistance from Derek Bentsen, Greg Lill, and Margaret Vizzi. Mr. Bentsen will lead the SEC's litigation. The case was supervised by Tim England, Fred Block, and Melissa Hodgman. SEC Complaint
OCR text (2,638c · html-text · 99% conf) 
SEC Charges California Cannabis Company, CEO and President with Fraud Litigation Release No. 25231 / September 28, 2021 Securities and Exchange Commission v. C3 International, Inc., Steele Clarke Smith III and Theresa Smith, No. 21-civ-1586 (C.D. CA filed September 28, 2021) The SEC today charged a California-based cannabis company, along with its CEO and President, with scamming at least 40 investors out of approximately $2 million. According to the SEC's complaint, from October 2011 through November 2019, C3 International, Inc. (C3), based in Garden Grove, California, and its CEO, Steele Clarke Smith III, deceived investors through numerous material misrepresentations and omissions regarding the company's business and its cannabis pill called Idrasil. Specifically, the complaint alleges that on C3's and Idrasil's websites, in investor offering materials, on social media, and in investor communications, C3 through Mr. Smith misrepresented, among other things, that Idrasil was patented or patent-pending or trademarked, that most insurance companies reimbursed for Idrasil, and that investor funds would be used for business purposes. C3 and Mr. Smith also allegedly made statements about Mr. Smith's background, education and legal history, but omitted the material fact of his prior criminal conviction for conspiracy to manufacture marijuana plants. The complaint further alleges that Mr. Smith's wife and C3's President, Theresa Smith, aided and abetted Mr. Smith's and C3's securities fraud violations. The Smiths allegedly misappropriated over $1 million of investor funds to pay for their personal living expenses. The SEC's complaint, filed in the United States District Court for the Central District of California, charges Steele Clarke Smith III and C3 with violating the registration and antifraud provisions of Sections 5 and 17(a) of the Securities Act of 1933 ("Securities Act"), and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. It also charges Theresa Smith with violating the registration provisions of Section 5 of the Securities Act and aiding and abetting Mr. Smith's and C3's securities fraud violations. The SEC's complaint seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and officer and director bars against the Smiths. The SEC's investigation was conducted by Stephen T. Kaiser and Elizabeth Marshall Anderson, with assistance from Derek Bentsen, Greg Lill, and Margaret Vizzi. Mr. Bentsen will lead the SEC's litigation. The case was supervised by Tim England, Fred Block, and Melissa Hodgman. SEC Complaint

Related documents (1)