A Delta Junction couple accused of taking more than $700,000 from investors for a fake marijuana “Bud and Breakfast” business now faces federal charges.
Brian and Candy Corty were indicted by a federal grand jury in April on charges of wire fraud and conspiracy to commit wire fraud.
The Cortys opened a bank account and started their business Ice Fog in 2017, and they began offering investors shares of stock to raise money for the company, according to the indictment. They hired and enlisted others to help sell shares, although the indictment does not name anyone else involved.
The couple purchased the Midway Lodge along the Richardson Highway near Delta Junction in 2018 and told investors they were opening it as a “Bud and Breakfast” that they described as a “marijuana theme park,” according to the indictment. They told investors the lodge would include glass ceilings for guests to watch the northern lights from bed, and it would also serve as a place to grow and sell marijuana, the indictment said.
The Cortys told investors that the Alaska Marijuana Control Office had performed inspections and an application to become a licensed grow and dispensary was in the final stages of approval, the indictment said. The business, they said, was expected to earn more than $3.85 million in the first year and over $23 million by the third year, according to the indictment. They told investors to expect a return 30 times larger than their investment, the indictment said.
“The defendants and their co-conspirators made these representations even though they knew Ice Fog had no meaningful current or prospective revenue stream and little to no prospect to obtain a license from the Alaska Marijuana Control Office,” the indictment said.
[From 2022: Report on pot in Alaska says industry may be hitting its ceiling]
As the Cortys began receiving investments, they used the money for personal expenses and lied to investors by telling them the funds were used to purchase products for the business or renovate the lodge, according to the affidavit. They also told investors the business was already making thousands of dollars weekly “by providing armed transportation services for the marijuana industry,” according to the indictment.
In total, the Cortys raised about $722,000 from the sale of “shares” and the fraudulent scheme involved at least 22 separate investors by January 2020, the indictment said.
The grand jury indicted the Cortys on April 18, but the case was initially sealed so law enforcement could execute a search warrant and issue summonses for their appearances. The Cortys are scheduled to appear in court Monday.
A federal public defender representing Brian Corty declined to comment on the case Wednesday, and an attorney representing Candy Corty could not immediately be reached.