AiroAV Announces SLO County marijuana mogul accused of fraud, again - Jonathan Cartu CPA Accounting Firm - Tax Accountants
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AiroAV Announces SLO County marijuana mogul accused of fraud, again

SLO County marijuana mogul accused of fraud, again

AiroAV Announces SLO County marijuana mogul accused of fraud, again


October 5, 2020

Helios Dayspring, rapper Xzibit and Grover Beach mayor John Shoals outside a building Dayspring planned to house one of his marijuana businesses

BY CCN STAFF

Six months after FBI agents raided his home on the outskirts of San Luis Obispo, marijuana mogul Helios Dayspring is facing allegations of fraud and breach of contract from one of his partners.

William Szymczak, 81, formed a partnership with Dayspring in 2019. They agreed that Dayspring would be paid $48,000 a year to manage their joint cannabis businesses while Szymczak would provide capital, more than $17 million to date, according to a lawsuit Szymczak filed last month.

Szymczak was initially impressed with Dayspring’s experience in the cannabis industry and his claims of close relationships with public officials and those involved in permitting and licensing in SLO County, according to the complaint. He trusted Dayspring to manage their companies as agreed to in their contract, which requires partners to make capital contributions and joint disbursements.

But problems arose. After learning that IRS and FBI agents had raided Dayspring’s home in March, Szymczak had accountants take a closer look at the books.

“To Szymczak’s shock and horror, it is now clear that Dayspring has been looting the companies all along,” according to the lawsuit.

In his complaint, Szymczak accuses Dayspring of misappropriations of funds, breach of contract, fraud and elder abuse.

Specifically, the lawsuit accuses Dayspring of:

  • Advancing $1,753,094 from their joint businesses to the Natural Healing Center project in Lemoore, an entity in which Szymczak has no financial interest.
  • Advancing $1,505,122 from their joint businesses to Orcutt Holdings, another business in which Szymczak has no financial interest.
  • Paying hundreds of thousands of dollars from their joint businesses for legal services related to Dayspring’s troubles with the IRS and the FBI, in which Szymczak is not involved.
  • Taking more than one million dollars in cash from the businesses — in 2020 alone — without making any pro rata distributions to other members.
  • Taking at least 12 distributions between Jan. 1 and June 30, 2020, while Szymczak did not receive any distributions.
  • Failing to get insurance on a home that burned to the ground.
  • Spending over $2 million on purchasing and planting the wrong seeds, “yielding a practically worthless crop.”
  • Participating in “blatant self-dealing,” by purchasing products from his other companies at higher than market rates.
  • Failing to pay tax liabilities for their companies.

Dayspring argues that he was taking money out of the accounts to pay taxes, and that he has not misappropriated funds.

In addition, Dayspring says the problem was not the seeds, but that “the entire hemp market crashed,” according to Daypring’s declaration.

As for his issues with federal investigators, Dayspring says the investigations are tied to a potential tax liability that occurred before recreational cannabis was legal, according to court records.

Dayspring is the majority owner of three approved retail pot shops and multiple large marijuana grows in San Luis Obispo County, as well as many cannabis businesses in other counties in California.

Szymczak is asking the court to appoint a receiver to operate and manage the companies that he and Dayspring own jointly. He is also seeking damages in an amount to be determined at trial, along with legal costs and court fees.

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