Following federal charges for raising more than $28 million from investors, who were falsely told the funds would help finance companies marketing cannabis vape pens, a former UCLA decathlete who competed with the Philippines national team pled guilty.
According to his plea agreement filed in Los Angeles federal court, David Bunevacz, 53, of Calabasas agreed to enter his plea to one count of both securities fraud and wire fraud. Each crime carries a penalty of up to 20 years in federal prison, according to prosecutors.
The guilty plea isn’t a surprise—On July 1, federal prosecutors announced that Bunevacz had agreed to plead guilty to the charges. He has been in federal custody since his arrest in April.
Bunevacz claimed he was investing in the sale of vape pens containing cannabinoids like CBD and THC through various businesses, including CB Holding Group Corp. and CaesarBrutus LLC, according to the criminal complaint.
The complaint notes that Bunevacz falsely told at least one investor that he had a long-running relationship with a Chinese manufacturer of disposable vape pens. The defendant said he obtained “raw, pesticide-free oil” that was sent to a lab to infuse flavors into the oil “with our proprietary custom process that renders the vape flavoring smooth and discrete.”
The complaint states that Bunevacz offered promissory notes issued through his entities, ranging from $10,000 and $3.5 million, promising interest ranging from 10-15% per year. It also claims that Bunevacz sold stock certificates and promised shares of the common stock in one of his entities. Finally, the complaint says that Bunevacz offered profit sharing agreements entitling investors to various percentages of profits from his business activities.
The complaint also notes that he solicited investors from people he knew personally and through his daughter, Mary Hayca.
“Bunevacz misappropriated funds for personal gain and used a portion of investor funds to pay earlier investors. Mary Hayca facilitated many of the false transactions and personally benefited from investor funds. Based on these allegations, the SEC seeks injunctive relief enjoining Bunevacz and his entities, as well as Mary Hayca, from violating federal securities laws and for disgorgement of all illicitly obtained funds and payment of civil penalties,” the complaint reads.
He also provided investors with forged documents—including bank statements, invoices and purchase orders—to back up his story, propping up the success of the businesses and the need for investors, prosecutors claim.
Though, Bunevacz didn’t use the funds to finance business operations, as he had allegedly stated. Rather, he used the majority of the money to pay for personal-use items. This included a luxurious house in Calabasas, Las Vegas trips, jewelry, designer handbags, a lavish birthday party for his daughter and horses,” according to an affidavit filed along with the complaint.
Bunevacz allegedly spent more than $8.1 million at casinos, paid $218.700 to an event planner in connection with a birthday party and paid $330,000 for a horse. Some of the funds were also allegedly used to repay earlier investors, similar to a Ponzi scheme, federal prosecutors said.
According to the affidavit, Bunevacz’s blog boasts his successful career as a decathlete who competed for the Philippines and additionally noted his wife and daughter appeared in a reality TV show.
Following one investor’s discovery of a civil lawsuit against Bunevacz, the defendant allegedly emailed a counterfeit version of the settlement agreement to make it appear that he had been paid $325,000 as part of a settlement. The reality, according to the U.S. Attorney’s Office, is that Bunevacz himself had agreed to pay the $325,000.
While prosecutors said Bunevacz admitted to causing losses of at least $28.4 million, it’s thought that Bunevacz raised between $37.1 million and $45 million through his cannabis companies, from more than 10 victim-investors.
U.S. District Judge Dale S. Fischer set sentencing for November 21, and Bunevacz will face up to 40 years in prison, according to a My News LA report.
