Business

SEC charges a North Carolina executive with fraud

Brian Weber mug shot
Brian Weber mug shot

Federal regulators have charged Mooresville-based Bebida Beverage and its former CEO with operating a fraudulent scheme to generate cash for his own benefit, and to support “Bebida’s failing business operations.”

In a statement this week, the Securities Exchange Commission said a U.S. District Court judge for the Eastern District of New York ordered Brian Weber of Charlotte, the former CEO, to pay nearly $400,000, which includes disgorgement (repayment of funds obtained illegally) and civil penalties.

According to the SEC’s complaint, Weber operated a “multi-pronged scheme” from early 2014 through late 2015 to siphon funds from Bebida, a publicly traded company that manufactured energy shots and carbonated “relaxation drinks” such as KOMA Unwind, according to press releases from the company.

Among other offenses, Weber is said to have created a fictitious convertible note, a form of short-term debt that can be converted into equity, then had the note turned into common shares that were sold to the public, with the proceeds going back to Weber himself. Weber also sold fake convertible notes and altered the checks he received as payment, which he then deposited into his own accounts, the SEC said.

Weber, 51, was president and CEO of Bebida, also called BeBevCo, from April 2009 until at least June 2017, according to the SEC’s complaint. Weber could not be reached for comment.

In 2015, the Food & Drug Administration issued a warning to Weber over the use of melatonin, an unsafe food additive, in KOMA, according to the warning letter on the FDA’s website.

It’s unclear whether Bebeida is still in operation. The company’s website redirects to a business that appears to sell mattresses.

The SEC is charging Bebida and Weber with violating registration and anti-fraud provisions of the federal securities laws. The commission said its investigation of Bebida and Weber is ongoing.

Representatives from the SEC and Bebida could not immediately be reached for comment.



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