The Securities and Exchange Commission (SEC) has charged California-based marijuana consulting company Medbox and its founder with "falsely touting 'record' revenue numbers to investors, claiming to be a leader in the marijuana industry while some of its earnings came from sham transactions with a secret affiliate." According to the SEC's complaint, "Medbox claimed to sell vending machines known as 'Medbox' devices capable of dispensing marijuana on the basis of biometric identification. The SEC alleges that Vincent Mehdizadeh created a shell company called New-Age Investment Consulting to carry out illegal stock sales and used the proceeds from those sales to boost Medbox’s revenue. Medbox allegedly issued press releases headlining the phony revenues as record earnings to legitimize itself as a viable commercial operation when in fact nearly 90 percent of the company’s revenue in the first quarter of 2014 stemmed from sham transactions with New-Age."
