SEC v. Mark D. Anderson, BBFY USA, Inc., Captain Drake, LLC — U.S. Securities and Exchange Commission Litigation Release No. 26523, dated April 8, 2026.
The SEC charged Mark D. Anderson, founder and CEO of Drake's Organic Spirits, Inc., along with two entities he controlled, BBFY USA, Inc. and Captain Drake, LLC. They are accused of orchestrating sham sales transactions and using false financial statements to defraud investors. The scheme allegedly raised over $2.4 million through fraudulent offerings.
In Plain English
Imagine a company that makes organic alcoholic drinks. The boss, Mark, wanted to sell the company for a lot of money, but its sales weren't as good as he told people. So, he made up fake sales in late 2021 and again in 2022 by moving money back and forth between his own companies. He then used these fake sales numbers in papers to convince new investors to give the company money, raising over $2.4 million. Sadly, the company is now gone, and investors lost most of their money.
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
- The Goal: Boost Sales for a Big Sale Mark D. Anderson, founder and CEO of Drake's Organic Spirits, Inc., wanted to sell his company for a higher price. He had promised investors that Drake's sales were growing significantly. However, by late 2021, he realized the company was falling short of the sales figures he had touted, facing a potential shortfall of over 30%.
- Creating 'Sham Sales' in 2021 To cover the shortfall, Anderson allegedly directed Drake's staff in the last two weeks of December 2021 to book approximately $2.6 million in fake sales. These were not real transactions; no physical inventory was transferred, and Drake's didn't have enough product to fulfill such orders.
- Round-Trip Funds for Fake Revenue Anderson used bank accounts under the names of his entities, BBFY USA, Inc. and another d/b/a entity called Liquid Solutions, to transfer funds to Drake's Organic Spirits. He then allegedly transferred nearly the same amount from Drake's to another of his companies, Captain Drake, LLC, to recoup his money. This created the appearance of sales revenue without any actual business conducted.
- Raising Money with False Numbers (Convertible Debt) Between February and December 2022, Anderson and Drake's Organic Spirits used offering documents that included these fabricated 2021 sales figures. Based on this false representation, they raised approximately $1.5 million from investors in an offering of convertible debt.
- Another Round of Sham Sales in 2022 In mid-2022, when Drake's Organic Spirits needed cash to continue operations, Anderson allegedly orchestrated another scheme. He directed Drake's staff to book approximately $391,000 in sham sales of bulk alcohol to Liquid Solutions, another entity he controlled.
- No Product, Just Paperwork In this second round of sham sales, Liquid Solutions did not take possession of any bulk alcohol, and no alcohol was deducted from Drake's inventory. Anderson transferred $391,000 from Liquid Solutions to Drake's, booking these as sales to Liquid Solutions.
- More Funds Raised on Fabricated Data (Preferred Stock) Between approximately February and March 2023, Anderson and Drake's Organic Spirits again used offering documents, this time including the false 2022 sales figures. Using these misleading documents, they raised over $900,000 from investors in a rights offering for preferred stock.
- Investor Losses Drake's Organic Spirits, Inc. is now defunct, and the SEC alleges that investors lost most of their investments, totaling over $2.4 million raised through the fraudulent scheme.
The Enforcement Action
On April 7, 2026, the SEC filed charges against Mark D. Anderson, BBFY USA, Inc., and Captain Drake, LLC for allegedly orchestrating sham sales transactions and conducting an offering fraud using false financial statements. The SEC seeks permanent injunctions and civil penalties against all defendants, and a conduct-based injunction against Anderson barring him from participating in the issuance, purchase, offer, or sale of any security, except for his own personal accounts. The SEC's investigation was conducted by Emily Scruggs and Kimberly Steckling and supervised by Ian Karpel and Nicholas Heinke, all of the SEC’s Denver Regional Office. The litigation will be led by Zachary Carlyle and supervised by Gregory Kasper.
Named in this action: Mark D. Anderson, BBFY USA, Inc., Captain Drake, LLC.