Hemp Execs SWINDLE Investors Out of $4 MILLION, Lie About Farm!

SEC v. Frank Barone, Kirill Chumenko, Vitaly Fargesen, et al. — U.S. Securities and Exchange Commission Litigation Release No. 26284, dated April 14, 2025.

The SEC charged former executives of CanaFarma Hemp Products Corp. with defrauding investors by making false claims about the company's operations and misappropriating millions of dollars. Final judgments were entered against two former executives, imposing injunctions and officer-and-director and penny stock bars.

In Plain English

Imagine you invested in a company that promised to make special products from hemp. The people running the company told investors they had their own farm and processed their own hemp. But they actually bought hemp oil from others and didn't process any themselves. They also took at least $4 million of the investors' money for themselves. Now, two former leaders of the company are banned from running public companies for five years and can't be involved in penny stocks.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Misrepresenting Company Operations Frank Barone and Kirill Chumenko, along with co-founders Vitaly Fargesen and Igor Palatnik, raised millions for CanaFarma Hemp Products Corp. They falsely told investors that CanaFarma was a fully integrated company processing hemp from its own farm.
2. Concealing Lack of Operations In reality, CanaFarma had not processed any hemp. Its products actually used hemp oil supplied by third parties, a fact concealed from investors.
3. Manipulating Financial Models At Fargesen's direction, Barone and Chumenko made unsupported changes to CanaFarma's financial model. This was done to disguise an expected series of payments to Fargesen and Palatnik.
4. Misappropriating Investor Funds Fargesen and Palatnik, sometimes with the assistance of Barone and Chumenko, misappropriated at least $4 million of the investor funds raised for the company's operations.

The Enforcement Action

On April 10, 2025, the U.S. District Court for the Southern District of New York entered final judgments against Frank Barone and Kirill Chumenko, former Senior Vice Presidents of Sales & Marketing at CanaFarma Hemp Products Corp. The judgments enjoin them from violating certain provisions of federal securities laws and impose five-year officer-and-director and penny stock bars. This concludes the SEC's litigation in this matter.

Named in this action: Frank Barone, Kirill Chumenko, Vitaly Fargesen, Igor Palatnik.

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