U.S. Securities & Exchange Commission sued Mark D. Anderson, alleging he fraudulently raised more than $2.4 million for Drake's Organic Spirits Inc., a Minnesota maker of organic alcoholic products.

Anderson was the company’s founder and Chief Executive Officer (“CEO”). From its founding in 2016 to when it ceased operations in 2023, Drake’s raised about $21 million from about 180 investors in multiple securities offerings, the SEC's complaint alleges. Drake’s is now defunct, and investors lost most of their investments.

Anderson had planned to increase Drake's revenue to sell it to a larger company, but when he saw Drake's 2021 revenue was going to miss the target he had touted to investors by more than 30%, he "orchestrated sham sales in late 2021 to make it appear that Drake’s sales had dramatically increased," the complaint says.

"In mid-2022, he utilized a similar scheme when Drake’s was short on cash. Anderson used promotional materials containing these inflated sales figures to raise more than $2.4 million from Drake’s investors."

The complaint can be found here. We could not reach Anderson for comment.