The former CEO for Shryne Group, the California-based cannabis holding company and multistate operator behind the popular STIIIZY and Honeyleaf brands, was charged in Alameda County last week with multiple fraud felonies related to a different company.
Brian Mitchell — who recently stepped down as CEO “for personal reasons unrelated to Shryne,” the company said in a press release — was charged with one felony count of conspiracy to commit a crime, six counts of felony insurance fraud, and two counts of workers’ compensation fraud, the Bay Area News Group reports. The charges stem from his time at the helm of Signature Painting and Construction, Inc.
Mitchell co-founded Signature with Eric Oller, who is facing similar charges. Authorities also charged Yama Sekander — who owns a Concord, California-based company called A-1 World Class Painting — with one count of felony workers’ compensation fraud. The men were arraigned last Monday in Alameda County court and all three have pleaded not guilty to the charges.
According to the report, the scheme allegedly used A-1 World Class Painting as a shell company to pay Signature’s workers from 2017-18 and subvert workers’ compensation insurance costs. Prosecutors alleged that the trio misclassified the roles of their employees and the riskiness of the work so as to pay lower insurance premiums.
Authorities estimated that insurance carriers lost about $5 million through the scheme.
“If a business creates an environment where they falsely pay a lower insurance premium, that company has an unfair competitive advantage over one that is law-abiding.” — Alameda County District Attorney Nancy O’Malley, via Bay Area News Group
In a press release last week, Shryne Group announced it had appointed Jon Avidor, formerly Shryne’s President and Interim Chief Financial Officer, as the new CEO. Chief Development Officer Tak Sato was appointed to Avidor’s