Debra BorchardtThe U.S. Securities and Exchange Commission charged Minerco Inc. and its former executives, Bobby Shumake Japhia (formerly known as Robert Samuel Shumake Jr.) and Julius Makiri Jenge, for an alleged pump-and-dump scheme that bilked investors out of $8 million.
According to the SEC’s complaint, the scheme ran from October 2019 through May 2021 and consisted of three parts. In the first move, Shumake used unnamed friends to gain control of Minerco, which was an inactive company. He created shell companies to acquire 10% of the company’s stock.
Once he gained control over the company, the SEC alleged that he hyped Minerco’s stock price by telling investors that the company would be the “first publicly traded company focused on the research, production and distribution of psilocybin mushrooms.” The complaint stated that he issued public statements containing false and misleading information.
“For example, Shumake and Minerco issued press releases stating that Minerco had partnered with a Jamaican company that would lend expertise in growing a unique strain of psilocybin and bequeath to Minerco its Jamaican cannabis licenses, and had been valued at $1 billion by an independent third party. Minerco and Jenge also made false public disclosures, including claiming that Minerco was an active Nevada company when its charter had been revoked. Minerco also told investors that it was poised to form a relationship with the University of Michigan to research psilocybin, something of which the University had no knowledge,” the complaint stated.
The final piece of the scheme involved Shumake hiring a company to “dump” the Minerco shares into the market. Ultimately, the unnamed company, which was based in Dubai, transferred at least $3.4 million of the proceeds back to an entity Shumake controlled, the Michigan-registered company called Shubox LLC. The SEC claims that Shubox used these funds to pay Shumake and Jenge and to defray the costs of the scheme.
The stock, which traded on the OTC Markets Group Pink Open Market using the symbol MINE was suspended on May 26, 2021, for 10 days due to questions about the company. It resumed trading but was finally deleted on July 22, 2024.
In September, Green Market Report wrote that Julius Jenge was arrested on Aug. 22 at Ronald Reagan Washington National Airport, where he was booked on a one-way flight to Tanzania.
The SEC’s complaint, filed in the United States District Court for the District of Columbia, charges Minerco, Shumake and Jenge with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, disgorgement with prejudgment interest and civil monetary penalties against each defendant, as well as conduct-based injunctions and penny stock and officer-and-director bars against Shumake and Jenge.
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