Prison-bound man must repay $2 million defrauded from hemp farmers, prosecutor says

An Atlanta man is going to prison and must repay millions of dollars to hemp farmers he defrauded in South Carolina, North Carolina and Georgia, the U.S. Attorney’s Office said Wednesday.

After pleading guilty to commodities fraud on Jan. 24, Rahsaan Jackson Garth, 49, was sentenced to three years in federal prison and ordered to pay $2,130,262 in restitution Monday, the U.S. Attorney’s Office told The State.

Overall, the money the victims lost “resulting from the scheme and artifice exceeds $5 million,” according to an indictment.

After he was released from federal prison in 2017 for his involvement in a health care fraud, Garth formed the company Verde Leaf and directed it, the U.S. Attorney’s Office said in a news release. Verde Leaf was supposed to address the challenges farmers faced in the hemp arena — including license acquisition, hemp cultivation and processing, and industry knowledge, the U.S. Attorney’s Office said.

On its website, the now-bankrupt Verde Leaf billed itself as a company that would help clients navigate what is “poised to be a multi-billion-dollar industry,” and ensure them that their hemp crop was “sold above fair market value.”

On Feb. 19, 2020, Verde Leaf held a workshop in South Carolina for potential farmers in conjunction with the South Carolina Department of Agriculture, the U.S. Attorney’s Office said. During the workshop, Garth represented that Verde Leaf had distribution networks and deals with food companies, pet companies, and pharmaceutical companies, according to the release.

While Garth was in various stages of negotiations with many of these companies, he fraudulently represented that Verde Leaf had consummated these deals, the U.S. Attorney’s Office said. Based in part on these knowing misrepresentations, farmers entered into contracts with Verde Leaf to grow hemp, according to the release.

Although Verde Leaf assisted these farmers with their hemp crops, it was unable to consummate the deals referenced at the agriculture department meeting to distribute or sell products, the U.S. Attorney’s Office said. Therefore, Verde Leaf was unable to process the hemp or pay most of the farmers for their crops and had to declare bankruptcy, according to the release.

As a result of the false statements that lured the farmers into doing business with Garth, the farmers suffered great financial harm, the U.S. Attorney’s Office said.

The South Carolina Department of Agriculture said it leased space to Garth for the meeting, but it did not sponsor the workshop, spokeswoman Eva Moore told The State.

The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Bill Watkins.

“The District of South Carolina is committed to prosecuting schemes that target South Carolina farmers and small business owners,” U.S. Attorney Adair Boroughs said in the release.

Criminal history

Garth’s previous conviction came in 2015, when he committed health-care fraud by faking the results of allergy tests that patients’ doctors had ordered, the U.S. Attorney’s Office said.

In 2011, Garth opened Polaris Allergy Labs Inc. in East Point, Georgia. Doctors sent their patients’ blood samples to Polaris Allergy Labs Inc. to be tested for food and environmental allergies, according to the U.S. Attorney’s Office.

From September 2012 through February 2014, Garth directed his allergy laboratory technician not to test some of the blood samples for allergens in order to save money by not using the allergen reagents necessary for testing, the U.S. Attorney’s Office said. Instead of testing the blood, Garth created fake allergy test result reports for the patients, and then had the fake test result reports sent back to the patients’ doctors, according to the U.S. Attorney’s Office.

Sometimes Garth created results showing no allergic reaction, and other times he created results showing an allergic reaction, in order to avoid raising the suspicions of the doctors to whom he sent fake test result reports, the U.S. Attorney’s Office said.

“(Garth) placed the pursuit of his own prosperity ahead of the well-being of patients, many of whom were children and the elderly,” said Derrick L. Jackson, the former special agent in charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.

After pleading guilty to one count of health care fraud, Garth was sentenced to 46 months in federal prison, three years of supervised release, ordered to pay $246,536.50 in restitution, and perform 100 hours of community service, according to the U.S. Attorney’s Office.