SEC v. JONATHAN WILLIAM MIKULA; CHRISTIAN FERNANDEZ; AMIT RAJ BERI; SWAY ENERGY CORPORATION; AVTAR SINGH DHILLON; EMERALD HEALTH PHARMACEUTICALS INC., et al., No. 2:22-cv-07096, Central District of California (Sept. 30, 2022) — Complaint

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CHARLES E. CANTER (Cal. Bar No. 263197)
Email:  [email protected]
SARAH S. NILSON (Cal. Bar No. 254574)
Email:  [email protected]
YOLANDA OCHOA (Cal. Bar No. 267993)
Email:  [email protected]

Attorneys for Plaintiff
Securities and Exchange Commission
Michele Wein Layne, Regional Director
Katharine Zoladz, Associate Regional Director
Gary Y. Leung, Regional Trial Counsel
444 S. Flower Street, Suite 900
Los Angeles, California 90071
Telephone: (323) 965-3998
Facsimile: (213) 443-1904
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

vs.
JONATHAN WILLIAM MIKULA,
CHRISTIAN FERNANDEZ, AMIT
RAJ BERI, SWAY ENERGY
CORPORATION, AVTAR SINGH
DHILLON, EMERALD HEALTH
PHARMACEUTICALS INC., and
JAMES M. DEMESA,
Defendants.

 Case No.

COMPLAINT

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Plaintiff Securities and Exchange Commission (“SEC” or “Commission”) files
this complaint against Defendants Jonathan William Mikula a/k/a William Mikula
(“Mikula”), Christian Fernandez a/k/a Christian Crockwell (“Fernandez”), Amit Raj
Beri a/k/a Raj Beri (“Beri”), Sway Energy Corporation f/k/a Elegance Brands, Inc.
(“Elegance”), Avtar Singh Dhillon, M.D. (“Dhillon”), Emerald Health
Pharmaceuticals, Inc. (“Emerald Health), and James DeMesa (“DeMesa”), and
alleges:
JURISDICTION
1. The Court has jurisdiction over this action under Sections 20(b),
20(d)(1),  and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C.
§§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e),  and 27(a) of
the Securities Exchange Act of 1934 (“Exchange Act”),  15 U.S.C. §§ 78u(d)(1),
78u(d)(3)(A), 78u(e) & 78aa(a).
2. Defendants have, directly or indirectly, made use of the means or
instrumentalities of interstate commerce, of the mails, or of the facilities of a national
securities exchange in connection with the transactions, acts, practices and courses of
business alleged in this complaint.
3. Venue is proper in this district under Section 22(a) of the Securities Act,
15 U.S.C. § 77v(a) and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a),
because certain of the transactions, acts, practices and courses of conduct constituting
violations of the federal securities laws occurred within this district.  In addition,
venue is proper in this district because Defendant Sway Energy Corporation has its
principal place of business in this district.
SUMMARY
4. This securities fraud enforcement action involves a scheme to conceal
paid promotion for securities offerings between at least 2019 and 2021.
5. At the center of this scheme is Defendant Mikula, a recidivist violator of
the federal securities laws.  Mikula, acting with various middlemen, including

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Defendants Fernandez and Beri, promoted securities offerings to subscribers of the
Palm Beach Venture newsletter for which Mikula was an author and chief analyst.
While Mikula’s articles purported to be based on his independent analysis and
claimed that no one associated with the Palm Beach Venture received compensation
for the promotion, in reality Mikula secretly received compensation from the issuers
of the promoted securities.
6. Mikula carried out this scheme with respect to the securities offerings of
at least four issuers: Elegance Brands, Emerald Health, Cloudastructure, Inc., and
Hightimes Holding Corporation.  These four offerings were conducted (or purported
to be conducted) pursuant to Regulation A (“Reg A”), which exempts certain
qualified public securities offerings from the Securities Act’s registration provisions.
7. Despite claiming that the promotions were not paid for, Mikula and
others acting with him received millions of dollars in compensation in exchange for
promoting the issuers’ Reg A offerings.  Mikula, acting with associates Fernandez
and Beri, took extensive steps to deceive investors and conceal that the promotions
were paid for by, among other things, arranging for the issuers to enter into sham
consulting agreements, submitting false invoices for the illicit payments, and
funneling payments for the promotion through multiple parties and accounts, many of
which were foreign.
8. During the period that Mikula deceptively promoted the Reg A offerings
of Elegance, Emerald Health, Cloudastructure, and Hightimes, investors purchased
more than $80 million in the securities of these companies.
9. Fernandez played a central role in the promotional scheme.  Fernandez, a
close associate of Mikula, was responsible for collecting and disbursing illicit funds
related to the promotions.  Fernandez negotiated Mikula’s share of the proceeds with
issuers and/or middlemen, sent sham invoices to collect Mikula’s share of the illicit
proceeds, and funneled the proceeds through various entities and accounts—many of
which were foreign—that he controlled.

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10. Beri served the dual role of authorizing payments for promotion as CEO
of Elegance, and acting as a middleman for Mikula’s promotions of Emerald Health
and Hightimes.  Beri entered into a sham consulting contract with Emerald Health to
collect payments in exchange for Mikula’s promotion of Emerald Health, and passed
approximately half of the amount collected to Fernandez for the benefit of Mikula.
11. Two of the issuers—Defendants Elegance and Emerald Health, along
with several affiliated individuals, Defendants Beri, Dhillon (Emerald Health’s co-
founder), and DeMesa (Emerald Health’s CEO)—knew, or were reckless in not
knowing, that investor funds paid for the Palm Beach Venture promotions of their
Reg A offerings, thus participating in the scheme.  These issuers, acting through and
with the approval and direction of Beri and DeMesa, made material
misrepresentations and omissions to investors and in their filings with the
Commission.
12. In addition, Elegance and Beri offered and sold approximately $20
million in Elegance securities to investors at a time when the offering was
unregistered and not subject to a valid registration exemption.  Moreover, Elegance
and Beri fed false information to Mikula to use in connection with the promotion of
Elegance, and made several false and misleading disclosures in filings with the
Commission and communications to investors, including falsely representing that the
offering was conducted under a valid Reg A exemption and falsely stating that
$530,000 and 8.9 million shares of Elegance stock were provided to a   third party for
“marketing” and “consulting services,” when in reality they were provided in
exchange for Mikula’s promotion.
13. Through their conduct:  (1) Defendants violated the antifraud provisions
of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) thereunder,
15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5(a) and (c), and the antifraud provisions
of Sections 17(a)(1) and 17(a)(3) of the Securities Act, 15 U.S.C. § 77q(a)(1) and (3);
(2) Mikula, Beri, Elegance, Emerald Health, and DeMesa violated the antifraud

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provisions of Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder, 15
U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5(b), and the antifraud provisions of Section
17(a)(2) of the Securities Act, 15 U.S.C. § 77q(a)(2); (3) Mikula violated the anti-
touting provisions of Section 17(b) of the Securities Act, 15 U.S.C. § 77q(b); (4)
Beri, Dhillon, and Fernandez aided and abetted Mikula’s violations of Section 17(b)
of the Securities Act, 15 U.S.C. § 77q(b); and (5) Beri and Elegance violated the
registration provisions of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C.
§§ 77e(a) & 77e(c).
14. The SEC seeks permanent injunctions against future violations of
Exchange Act Section 10(b) and Rule 10b-5 thereunder and Securities Act Sections
17(a) and 17(b) and Sections 5(a) and 5(c); an order requiring Mikula, Fernandez,
and Beri, to disgorge their ill-gotten gains with prejudgment interest; civil penalties
against Mikula, Fernandez, Beri, Elegance, Emerald Health, and DeMesa; an order
barring Beri, Dhillon, and DeMesa from serving as an officer or director of a public
company; and an order enjoining Mikula, Fernandez, and Beri from participating in
any campaign to promote stock or other securities for compensation.
THE DEFENDANTS
15. Jonathan William Mikula, a/k/a/ William Mikula, is a resident of
Georgia, who, from at least 2019 through late 2021, was chief analyst and author of
Palm Beach Venture, a newsletter published by Palm Beach Research Group.  He
currently operates his own entity, POP Finance a/k/a The Deal Report, through which
he recommends securities investments.  Mikula has been twice enjoined by federal
courts, including this Court, from violating the federal securities laws:  In 2007,
Judge Spencer Letts permanently enjoined Mikula from future violations of Sections
5 and 17(a) of the Securities Act, 15 U.S.C. § 77e & 77q(a), and Section 10(b) of the
Exchange Act, 15 U.S.C. § 78j(b) and Rule 10b-5, 17 C.F.R. §240.10b-5, and ordered
Mikula to disgorge $106,671.08 in ill-gotten gains and prejudgment interest, SEC v.
Phoenixsurf.com, et al., Case No. 2:07-cv-04765-JSL, ECF No. 6 (C.D. Cal. Aug. 14,

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2007).  The Commission ultimately waived payment of monetary relief following
Mikula’s submission of a sworn financial statement.  But Mikula lied on that
statement and later pled guilty to providing false information to a federal agency, in
violation of 18 U.S.C. § 1001, United States v. Mikula, Case No. 2:10-cr-00649-DSF,
ECF No. 18 (C.D. Cal. Jan. 19, 2011).  In fact, Mikula lied about his receipt of funds
from another securities fraud that resulted in another permanent injunction, this time
entered by the District Court for the Northern District of Georgia, SEC v. Mikula,
Case No. 1:08-cv-03097-BBM, ECF No. 95 (N.D. Ga. Sept. 24, 2009).
16. Christian Fernandez a/k/a Christian Crockwell is a Mexican citizen
residing in Georgia.  Fernandez controls the entities, including Nucleo de Negocios
Dialin SA DE CV and Bench International LLC, through which the Defendant issuers
funneled payments to Mikula in exchange for his promotion of their securities
offerings.
17. Amit Raj Beri a/k/a Raj Beri is an Australian national residing in
Florida.  He moved to the United States in 2018 and founded Elegance, where he was
the chief executive officer (“CEO”).  Beri was listed as the chief financial officer
(“CFO”) in Elegance’s filings with the Commission.
18. Sway Energy Corporation f/k/a Elegance Brands, Inc. is a beverage
company incorporated in Delaware with its principal place of business in Los
Angeles, California.  In January 2022, Elegance changed its name to Sway Energy
Corporation.
19. Avtar Singh Dhillon is    a Canadian citizen residing in California.
Dhillon co  -founded Emerald Health and served as president and chairman of its board
until 2019.  During the conduct described below, Dhillon served as a corporate
finance consultant for the company and participated in meetings of the board of
directors of Emerald Health as a board observer.  The Commission charged Dhillon
in 2021 for his role in large-scale international microcap fraud schemes.  SEC v.
Sharp, et al., Case No. 1:21-cv-11276-WGY, ECF No. 1 (D. Mass. Aug. 5, 2021),

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ECF No. 1.   He was also criminally charged for his involvement in those schemes.
United States v. Dhillon, 1:21-mj-07174-JCB, ECF No. 3 (D. Mass Aug. 3, 2021).
20. Emerald Health Pharmaceuticals Inc. is a biopharmaceutical company
incorporated in Delaware with its principal place of business in San Diego,
California.
21. James M. DeMesa is    a resident of Florida and was the president and
CEO of Emerald Health during the conduct described below.
RELATED ENTITIES AND INDIVIDUALS
22. Palm Beach Research Group is operated by Common Sense
Publishing, LLC, a subsidiary of Market Wise, Inc., a U.S. public company.  Palm
Beach Research Group publishes Palm Beach Venture, a subscription-based
newsletter that focuses on opportunities for investors to invest in securities offered
under Reg A.  Mikula was one of two attributed authors of the Palm Beach Venture
newsletter.
23. Hightimes Holding Corporation (“Hightimes”) is a Delaware
corporation with its principal place of business in Los Angeles, California.
Hightimes focuses on Cannabis related publications and platforms.  Hightimes
received qualifications from the Commission to conduct Reg A offerings in March
and July 2018.  Hightimes was promoted by Palm Beach Venture between April 2020
and March 2021.
24. Cloudastructure, Inc. (“Cloudastructure”) is a technology company
incorporated in Delaware with its principal place of business in Miami, Florida.
Cloudastructure received qualifications from the Commission to conduct Reg A
offerings in July 2020, May 2021, and May 2022.  Cloudastructure was promoted by
Palm Beach Venture between September 2020 and May 2021.
THE ALLEGATIONS
A. The Fraudulent Promotional Scheme
25. Between at least 2019 through 2021, Mikula promoted at least four Reg

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A issuers through the Palm Beach Venture newsletter, which falsely represented that
his recommendation was based on his “own analysis” and that he did not receive
compensation for “bringing this deal to you [the investor].”
26. In fact, Mikula promoted the issuers in exchange for compensation that
Mikula concealed from investors.
27. As described below, Mikula typically introduced a middleman to the
issuer that Palm Beach Venture planned to promote.  The middleman would then
negotiate consulting or advisory agreements with the Reg A issuer with the
understanding that the middleman would share a portion of the proceeds with Mikula.
The agreements contained a generic description of services that the middleman would
provide to the issuer, but in reality there was no expectation that the services would
be provided; the agreement instead served the purpose of disguising compensation in
exchange for the promotion.
28. The payments to the consultants were typically tied to a percentage of
investor proceeds from the Palm Beach Venture promotion.  The middlemen often
submitted fake invoices to the issuers for services that were not performed.  Upon
receipt of the payments from the issuer, the middlemen would retain a share of the
compensation for their efforts, and funnel the remaining monies through accounts
controlled by Fernandez—many of which were maintained offshore—for the benefit
of Mikula.
B. The Elegance Promotion
29. The Commission qualified Elegance to conduct a Reg A offering in
December 2018.
30. Between December 2018 and August 2019, Elegance raised less than $1
million.
31. In August 2019, Beri was introduced to Mikula and began discussing
possible promotion of Elegance by Palm Beach Venture.
32. In August 2019, at the request of Mikula in anticipation of a promotion

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by Palm Beach Venture, Elegance and Beri made changes to the terms of Elegance’s
offering, including increasing the number of securities outstanding and adding
warrants.
33. For the Reg A exemption to remain available, these changes could only
be accomplished through a new offering statement or post-qualification amendment
qualified by the Commission.  Elegance did not prepare a new offering statement, nor
did it obtain Commission approval for a post-qualification amendment.
34. No other registration exemptions were available for Elegance’s sale of
the securities after August 2019.  Thus, the securities that Elegance sold after August
2019 were not registered and were not subject to any valid registration exemptions.
35. At Mikula’s urging, and in order to “facilitate” the promotion, Elegance
agreed to engage Individual 1, an associate of Mikula’s, and pay him 3% of investor
funds raised through the promotion and provide him with 8.9 million shares of
Elegance’s stock, which amounted to 10% of the company’s outstanding stock.
36. Individual 1 joined Elegance’s board as a non-executive chairman, but
provided no other services to Elegance.
37. In September and October 2019, Mikula and Beri corresponded
frequently concerning the content of the upcoming promotional article on Elegance.
38. On or about October 7, 2019, Mikula emailed Beri: “Final issue that
subscribers will see attached... Let the games begin...” (Ellipses original.)
39. Mikula attached a Palm Beach Venture newsletter containing a 23-page
article promoting the Elegance Reg A offering, entitled “We’re Buying the Next
‘Best Performing Stock of the Century’ for 50 Cents.”

40. Though nominally co-authored with the editor of Palm Beach Venture,
Mikula, in fact, was the article’s author.
41. The article contained a number of false and misleading statements,
including:
(a) That Gorilla Hemp, a product that Elegance was in the early stages of

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formulating, was “poised to ship to stores”;
(b) That Gorilla Hemp was retailing for $3.95 a can;
(c) That Gorilla Hemp could yield Elegance a 2,630% price increase;
(d) That Elegance had distribution agreements in place for Gorilla Hemp
with the largest adult beverage distributer in the United States; and
(e) That Elegance’s share price was projected to increase by 9,900% in five
years.
42. Elegance and Beri either provided false and misleading information to
Mikula, or knew it was included in the article and never corrected it.
43. In addition to the false and misleading information described above,
Mikula’s promotional article, under the heading “How to Invest in Elegance Brands,”
provided contact information, including a website link, a phone number, and an email
address where investors would “have the option to invest in Elegance by check,
ACH, credit card, wire transfer, or through an IRA.”
44. The article advised, “if you’d like to act, do so quickly. With the amount
of anticipated demand, this deal won’t be available long.”
45. The article included this “Important Note”:
Neither the Palm Beach Research Group nor its affiliates receive
compensation for bringing this deal to you. As publishers of financial
information, we make general recommendations based on our own
analysis.
46. Another version of the article released in January 2020 included that
same “Important Note,” as well as a disclaimer stating that “Palm Beach Research
Group writers and publications do not take compensation in any form for covering
those securities or commodities.”
47. In fact, Mikula received from Elegance more than $80,000 in
entertainment, including meals, nightclubs, and first class airfare, in exchange for his
promotion of Elegance.

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48. In late 2019 and early 2020, to ensure the success of the Palm Beach
Venture promotion, Elegance and Beri made a number of misstatements and material
omissions of fact in its Commission filings, press releases, and other communications
with prospective investors, including:
(a) Falsely representing that Elegance was conducting an offering pursuant
to a valid Reg A exemption;
(b) Misrepresenting that $530,000 of investor funds and 8.9 million shares
of Elegance   stock were provided to Individual 1 in exchange for “marketing”
and “consulting services,” and omitting that they were provided in exchange
for the promotion;
(c) Failing to disclose that Elegance used more than $80,000 in investor
funds to entertain Mikula and his associates in exchange for the promotion; and
(d) Failing to include in its related party disclosures a share purchase
agreement between Elegance and an entity owned by Beri and a payment of
$1.7 million to Beri in December 2019 in connection with that agreement.
49. Elegance and Beri engaged in a scheme to defraud investors by making
the misstatements and omissions above and by engaging in related manipulative acts
to raise funds through the Palm Beach promotion.  For example, Elegance and Beri:
(a) Represented Palm Beach to be an “independent” third party;
(b) Directly provided Mikula with false information that was used in the
Palm Beach Venture articles; and
(c) Circulated the article containing the falsities to investors, and directed its
call center to use the article containing false information with prospective
investors.
50. Palm Beach Venture promoted Elegance between October 2019 and
February 2020.
51. During the promotion, Elegance raised approximately $20 million in
investor funds, of which Elegance paid $530,000 to Individual 1.

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52. The securities that Elegance sold during the promotion were not
registered, and were not subject to any valid registration exemption.
C. The Emerald Health Promotion
53. Founded in 2017, Emerald Health is a biopharmaceutical company
focused on developing cannabinoid-derived drug products to treat autoimmune and
neurodegenerative diseases.
54. From 2020 through 2021, Emerald Health and members of its leadership
participated in a fraudulent promotional scheme, paying undisclosed compensation
for Mikula’s recommendation in the Palm Beach Venture newsletter.
55. The scheme began in 2019 when Emerald Health contacted Palm Beach
Venture about the possibility of the newsletter featuring Emerald Health.
56. On or about October 9, 2019, Mikula met DeMesa, Emerald Health’s
president and CEO, at a conference and introduced DeMesa to Beri.
57. In November 2019, DeMesa, Dhillon, and others from Emerald Health
met Mikula and Beri for lunch, at which Beri was introduced to Dhillon.
58. In early 2020, Dhillon, who was the co-founder, former president and
chairman of the board, and corporate finance consultant for Emerald Health, worked
with Beri on a plan to have Emerald Health secretly pay Mikula to tout Emerald
Health’s Reg A offering through Palm Beach Venture.
59. Regarding the proposed Emerald Health promotional scheme, Beri and
Mikula exchanged the following text messages on or about January 14, 2020:
Beri:   $200k cash and 2,000,000 shares
And we can go halves on both.
Once I get shares I can transfer to your Vegas company
Mikula: We’d seek to publish on Monday March 9
So a week late but our r[e]adars wouldn’t mind if the story is good
enough
Beri:   Ok great 

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Don’t lock it in
Let me get us our $$ and shares first
Mikula: Sounds good 
60. On the same day, in a WhatsApp exchange with Dhillon, Beri wrote, “I
spoke with William at 1 pm and I can guarantee some things if you can look after
him, which I told him you can. Want to speak to you before I lock it in.”
61. Dhillon understood that Beri was referring to compensating Mikula for
his promotion of Emerald Health.
62. Based on this plan, Emerald Health would covertly transfer funds to
Mikula by engaging Beri’s brother to ostensibly provide consulting services for the
company.
63. In turn, Beri’s brother would funnel a portion of his consulting fees to
Mikula, and keep a portion for brokering this fraudulent deal.
64. After agreeing to this scheme, Dhillon urged   DeMesa to enter into sham
consulting agreements with Beri and Beri’s brother (an Australian resident) to
procure Mikula’s promotion.
65. DeMesa initially had reservations about entering into these consulting
agreements because he was “uncomfortable” with the arrangement with Beri.
DeMesa questioned whether Beri was engaging in “blackmail” and whether Mikula
could lose his job if Emerald Health exposed the terms of Beri’s proposal.
66. Between March 2020 and July 2020, DeMesa had several meetings with
Beri to discuss prospective consulting agreements with Beri and Beri’s brother.
67. Through these meetings, DeMesa came to understand that Beri had a
strong relationship with Mikula and would be influential over the decision of whether
Mikula would recommend Emerald Health through Palm Beach.
68. DeMesa considered Palm Beach Venture’s subscribers a promising
source of the investor capital Emerald Health needed to pursue clinical studies, cover
employee salaries, and satisfy other operational expenses.

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69. DeMesa understood that the company would be paying Beri to help
influence Mikula to promote Emerald Health, and DeMesa knew, or was reckless in
not knowing, that Mikula would receive compensation for promoting Emerald
Health.
70. By the end of July 2020, DeMesa, on behalf of Emerald Health, entered
into sham consulting agreements with Beri and his brother, agreeing to pay Beri 6%
of investor funds raised through Palm Beach’s promotional efforts.
71. DeMesa drafted the agreement with Beri’s brother and negotiated the
terms of the agreement with Beri.
72. Emerald Health’s written agreement with Beri failed to identify that his
compensation was tied to Palm Beach’s promotional efforts and that he would be
receiving a percentage of the funds raised.
73. In February and March, 2020, Mikula authored a Palm Beach Venture
article titled “Curing Incurable Diseases and Giving Us Over 4,900% Potential
Gains,” which touted Emerald Health and was distributed to the newsletter’s
subscribers.
74. The article concluded with a section “How to Invest in Emerald Health
Pharmaceuticals” and provided contact information, including a phone number, email
address, and website where subscribers could purchase Emerald Health stock as part
of Emerald Health’s Reg A offering.
75. The article advised subscribers, “if you’d like to act, do so quickly.”
76. Finally, the article contained an “Important Note” falsely claiming that
“[n]either the Palm Beach Research Group nor its affiliates receive compensation for
bringing this deal to you.”
77. On or about March 2, 2020, Mikula shared his promotional article with
Dhillon and DeMesa before it was circulated to prospective investors, and neither
Dhillon nor DeMesa raised any issue with the false disclaimer.
78. In late summer 2020, Mikula authored another Palm Beach Venture

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ar  ticle touting Emerald Health entitled “The Next Aspirin.”
79. This article also contained information for how subscribers could invest
in the Emerald Health Reg A offering and also contained an “Important Note” that
“[n]either the Palm Beach Research Group nor its affiliates receive compensation for
bringing this deal to you.”  In addition, an endnote stated, “Palm Beach Research
Group writers and publications do not take compensation in any form for covering
those securities or commodities.”
80. In fact, between June 2020 and May 2021, Emerald Health paid the
Beris $1.7 million collectively ($1.6 million to Beri and $100,000 to his brother).
The company also issued 100,000 shares of Emerald Health stock, valued at
$600,000 at the time of issuance, to Beri’s brother.
81. Despite his substantial compensation, valued at $700,000, Beri’s brother
performed no consulting services for Emerald Health during the six months in which
he was engaged as a consultant for the company.
82. Fernandez was responsible for collecting Mikula’s share of the monies
from Emerald Health.  Fernandez submitted sham invoices to Beri for these amounts.
The invoices contained false descriptions, such as “Consulting for Developing Agave
Syrup Phase 2.”
83. Beri and his brother transferred approximately $700,000 of the funds
they received from Emerald Health to Mikula and Fernandez, as their share of the
payment for Mikula’s promotional campaign.  Over $100,000 was paid directly to
Mikula and Fernandez, and the balance was paid through entities controlled by
Fernandez to entities controlled by Mikula.
84. For example, between July 9, 2020, and September 9, 2020, in four
transfers ranging in amounts from $9,996.08 to $ 49,996.12, Beri’s brother paid
$79,992.20 to Nucleo de Negocios Dialin SA DE CV, an entity controlled by
Fernandez.
85. On September 25, 2020, at Fernandez’s request, Beri provided him with

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$30,000 in cash.
86. Between October 10, 2020, and February 11, 2021, in four separate
transfers ranging in amounts from $2,500 to $70,000, Beri transferred $78,500 from
Beri Holdings, LLC to Fernandez.
87. Between November 9, 2020, and May 28, 2021, in six transfers ranging
in amounts from $30,000 to $200,000, Beri transferred $607,500 to Nucleo de
Negocios Dialin SA DE CV.
88. It was Beri’s understanding that the monies paid to Fernandez were for
the benefit of Mikula.  Between September 15, 2020, and December 6, 2021, in 21
transfers ranging in amounts from $1,666.66 to $54,000, Fernandez transferred at
least $155,000 to New Age Vending LLC, an entity controlled by Mikula.
89. Moreover, in a quarterly update to its investors, Emerald Health
highlighted that Palm Beach Venture recommended the company “as an attractive
investment opportunity” without disclosing that this was a paid-for recommendation.
90.  DeMesa approved the quarterly update and directed that it be sent to
investors and posted on the company’s public website.
91. Throughout 2020, Emerald Health filed offering circulars with the
Commission that included, as exhibits, the agreements with Beri and his brother.
These circulars misled investors about the true nature of these consulting agreements
and failed to disclose that the company was paying for the Palm Beach Venture
promotion.
92. DeMesa knew, or was reckless in not knowing, that the offering circulars
and its exhibits failed to disclose that Beri’s agreement was linked to Palm Beach
Venture’s efforts and that Beri was receiving 6% of funds raised from Palm Beach
Venture subscribers.  Nevertheless, he prepared, reviewed, approved, and signed the
filings.
93. Emerald Health raised approximately $30 million from thousands of
investors through Mikula’s promotion.

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D. The Hightimes and Cloudastructure Promotions
94. Mikula also falsely stated that he did not receive compensation in
connection with the promotion of at least two other Reg A issuers: Hightimes
Holding between April 2020 and March 2021, and Cloudastructure between
September 2020 and May 2021.
95. The Palm Beach Venture promotional articles on Hightimes and
Cloudastructure again included the “Important Note” that “[n]either the Palm Beach
Research Group nor its affiliates receive compensation for bringing this deal to you,”
and further stated that “Palm Beach Research Group writers and publications do not
take compensation in any form for covering those securities or commodities.”
96. In February 2020, Beri began negotiating a consulting agreement with
Hightimes, representing that he would facilitate a promotion by Palm Beach Venture
if Hightimes would pay him a percentage of investor funds raised through the
promotion.
97. Beri coordinated with Mikula and agreed that he would share a portion
of any funds received from Hightimes with Mikula.
98. Hightimes ultimately entered into an agreement to pay Entity 1, a
Canadian entity controlled by Individual 2, 5% of the funds raised through the Palm
Beach promotion.
99. Beri, Individual 2, Fernandez, and Mikula agreed that they would all
receive a share of monies that Entity 1 received from Hightimes.
100. The purpose of using a Canadian entity and offshore account was to
conceal that payments from Hightimes would go to Mikula.
101. Beri submitted sham invoices to Individual 2 for his share of the
payments from Hightimes.  Hightimes paid at least $150,000 to Entity 1, which was
then disbursed to Individual 2, Fernandez, Beri, and Mikula.
102. In February 2020, Beri began negotiating a consulting agreement with
Cloudastructure, informing Cloudastructure’s CEO that Palm Beach Venture would

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promote the company if Cloudastructure paid Beri a percentage of investor funds
raised.
103. Beri entered into these negotiations with the intent to share half of any
amounts received from Cloudastructure with Mikula.
104. Beri’s negotiations were not successful, and Mikula subsequently
introduced Fernandez to Cloudastructure.
105. In September 2020, Cloudastructure entered into a consulting agreement
with Entity 2, a Canadian entity.
106. The consulting agreement provided that Entity 2 would receive certain
fees based on the amounts raised from the Palm Beach promotion.
107. Fernandez negotiated the agreement on behalf of Entity 2 and submitted
invoices for Entity 2’s    agreed-upon share of investor proceeds raised through the
Palm Beach Venture promotion.
108. Cloudastructure ultimately paid Entity 2 $650,000, which was
distributed at least in part to entities controlled by Mikula and Fernandez.
FIRST CLAIM FOR RELIEF
Fraud in Connection with the Purchase or Sale of Securities
Violations of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c)
(against all Defendants)
109. The SEC realleges and incorporates by reference paragraphs 1 through
108 above.
110. Mikula, Beri, and Elegance carried out a scheme to defraud, through the
combination of their deceptive statements and actions concerning the Elegance
offering. Throughout the promotional campaign, defendants concealed the
compensation paid to Mikula, in the form of entertainment expenses, in exchange for
Mikula’s promotion of the Elegance offering.
111. Mikula, Fernandez,  Beri, Dhillon, Emerald Health, and DeMesa carried
out a scheme to defraud, through the combination of their deceptive statements and

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actions concerning the Emerald Health offering. Throughout the promotional
campaigns, defendants concealed the compensation paid to Mikula, through
Fernandez and/or Beri and others in exchange for Mikula’s promotion of the Emerald
Health offering.
112. Mikula, Fernandez, and Beri carried out a scheme to defraud, through
the combination of their deceptive statements and actions concerning the Hightimes
offering. Throughout the promotional campaign, defendants concealed the
compensation paid to Mikula, through Fernandez, Beri, and others, in exchange for
Mikula’s promotion of the Hightimes offering.
113. Mikula and Fernandez carried out a scheme to defraud, through the
combination of their deceptive statements and actions concerning the Cloudastructure
offering. Throughout the promotional campaign, defendants concealed the
compensation paid to Mikula, through Fernandez, in exchange for Mikula’s
promotion of the Cloudastructure offering.
114. By engaging in the conduct described above, Mikula, Fernandez, Beri,
Elegance, Dhillon, Emerald Health, and DeMesa and each of them, directly or
indirectly, in connection with the purchase or sale of a security, and by the use of
means or instrumentalities of interstate commerce, of the mails, or of the facilities of
a national securities exchange:  (a) employed devices, schemes, or artifices to
defraud; and (b) engaged in acts, practices, or courses of business which operated or
would operate as a fraud or deceit upon other persons.
115. Mikula, Fernandez, Beri, Elegance, Dhillon, Emerald Health, and
DeMesa, with scienter, employed devices, schemes, and artifices to defraud; and
engaged in acts, practices, or courses of conduct that operated as a fraud on the
investing public by the conduct described in detail above.
116. By engaging in the conduct described above, Mikula, Fernandez, Beri,
Elegance, Dhillon, Emerald Health, and DeMesa violated, and unless restrained and
enjoined will continue to violate, Section 10(b) of the Exchange Act, 15 U.S.C.

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§   78j(b), and Rules 10b-5(a) and 10b-5(c) thereunder, 17 C.F.R. §§ 240.10b-5(a) and
240.10b-5(c).
SECOND CLAIM FOR RELIEF
Fraud in Connection with the Purchase or Sale of Securities
Violations of Section 10(b) of the Exchange Act and Rule 10b-5(b)
(against Mikula, Beri, Elegance, Emerald Health, and DeMesa)
117. The SEC realleges and incorporates by reference paragraphs 1 through
108 above.
118. Mikula, Beri, and Elegance made materially false and misleading
statements concerning Mikula’s promotion of the Elegance offering.
119. Mikula, Emerald Health, and DeMesa made materially false and
misleading statements concerning Mikula’s promotion of the Emerald Health
offering.
120. Beri and Elegance, in filings with the Commission, misrepresented that
the payments to Individual 1 were for Mikula’s promotion of Elegance and they
falsely informed investors that they were qualified to engage in a Reg A offering.  In
addition, Beri and Elegance also failed to disclose that investor funds would be used
to pay for Mikula’s promotion and failed to disclose a related party transaction and
$1.7 million payment to Beri. In addition, Elegance and Beri either provided false and
misleading information to Mikula for inclusion in promotional articles to investors,
and knew false and misleading information was included in those articles and never
corrected it.
121. Beri, as CEO of Elegance, controlled the content of Elegance’s filings
with the Commission and thus exercised ultimate authority over the statements
contained in the filings.
122. Similarly, Emerald Health and DeMesa likewise failed to disclose that
(1) Emerald Health paid for Mikula’s promotion of Emerald Health, and (2) investor
funds would be used to pay for Mikula’s promotion.  In addition, Emerald Health and

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DeMesa made material misrepresentations in offering circulars and a quarterly
investor update, falsely implying that Beri and his brother were providing legitimate
consulting services to Emerald Health and that the recommendation by Mikula in the
Palm Beach Venture newsletter was an independent and objective third-party
recommendation.
123. DeMesa, as Emerald Health’s president and CEO, controlled and
approved the content and exercised ultimate authority over the statements in the
offering circulars and the quarterly investor update.
124. Mikula knew, or was reckless in not knowing, that the promotional
articles he authored for the Elegance, Emerald Health, Hightimes, and
Cloudastructure promotions represented to Palm Beach Venture subscribers he did
not receive compensation from the issuers for the articles.
125. By engaging in the conduct described above, Mikula, Beri, Elegance,
Emerald Health, and DeMesa, and each of them, directly or indirectly, in connection
with the purchase or sale of a security, and by the use of means or instrumentalities of
interstate commerce, of the mails, or of the facilities of a national securities exchange,
made untrue statements of a material fact or omitted to state a material fact necessary
in order to make the statements made, in the light of the circumstances under which
they were made, not misleading.
126. Mikula, Beri, Elegance, Emerald Health, and DeMesa, with scienter,
made untrue statements of a material fact or omitted to state a material fact necessary
in order to make the statements made, in the light of the circumstances under which
they were made, not misleading, by the conduct described in detail above.
127. By engaging in the conduct described above, Mikula, Beri, Elegance,
Emerald Health, and DeMesa violated, and unless restrained and enjoined will
continue to violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule
10b-5(b) thereunder, 17 C.F.R. § 240.10b-5(b).

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THIRD CLAIM FOR RELIEF
Fraud in the Offer or Sale of Securities
Violations of Sections   17(a)(1) and (3) of the Securities Act
(against all Defendants)
128. The SEC realleges and incorporates by reference paragraphs 1 through
108 above.
129. Mikula, Beri, and Elegance carried out a scheme to defraud, through the
combination of their deceptive statements and actions concerning the Elegance
offering. Throughout the promotional campaigns, defendants concealed the
compensation paid to Mikula, through and others in exchange for Mikula’s promotion
of the Elegance offering.
130. Mikula, Fernandez, Beri, Dhillon, Emerald Health, and DeMesa carried
out a scheme to defraud, through the combination of their deceptive statements and
actions concerning the Emerald Health offering. Throughout the promotional
campaigns, defendants concealed the compensation paid to Mikula, through
Fernandez and/or Beri and others in exchange for Mikula’s promotion of the Emerald
Health offering.
131. Mikula, Fernandez, and Beri carried out a scheme to defraud, through
the combination of their deceptive statements and actions concerning the Hightimes
offering. Throughout the promotional campaign, defendants concealed the
compensation paid to Mikula, through Fernandez, Beri, and others, in exchange for
Mikula’s promotion of the Hightimes offering.
132. Mikula and Fernandez carried out a scheme to defraud, through the
combination of their deceptive statements and actions concerning the Cloudastructure
offering. Throughout the promotional campaign, defendants concealed the
compensation paid to Mikula, through Fernandez, in exchange for Mikula’s
promotion of the Cloudastructure offering.
133. By engaging in the conduct described above, Mikula, Fernandez, Beri,

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Elegance, Dhillon, Emerald Health, and DeMesa,  and each of them, directly or
indirectly, in the offer or sale of securities, and by the use of means or instruments of
transportation or communication in interstate commerce or by use of the mails
directly or indirectly:  (a) employed devices, schemes, or artifices to defraud; and (b)
engaged in transactions, practices, or courses of business which operated or would
operate as a fraud or deceit upon the purchaser.
134. Mikula, Fernandez, Beri, Elegance, Dhillon, Emerald Health, and
DeMesa, with scienter, employed devices, schemes,  and artifices to defraud; and,
with scienter or negligence, engaged in transactions, practices, or courses of business
which operated or would operate as a fraud or deceit upon the purchaser.
135. By engaging in the conduct described above, Mikula, Fernandez, Beri,
Elegance, Dhillon, Emerald Health, and DeMesa violated, and unless restrained and
enjoined will continue to violate, Sections 17(a)(1) and 17(a)(3) of the Securities Act,
15 U.S.C. §§ 77q(a)(1) and 77q(a)(3).
FOURTH CLAIM FOR RELIEF
Fraud in the Offer or Sale of Securities
Violations of Section 17(a)(2) of the Securities Act
(against Mikula, Beri, Elegance, Emerald Health, and DeMesa)
136. The SEC realleges and incorporates by reference paragraphs 1 through
108 above.
137. Mikula, Beri, Elegance, Emerald Health, and DeMesa obtained money
or property by means of materially false and misleading statements concerning
Mikula’s promotion of the Elegance and Emerald Health offerings.  Specifically, Beri
and Elegance failed to disclose that (1) payments to Individual 1 were for Mikula’s
promotion of Elegance, and (2) investor funds would be used to pay for Mikula’s
promotion.  In addition, Elegance and Beri either provided false and misleading
information to Mikula for inclusion in promotional articles to investors, and knew
false and misleading information was included in those articles and never corrected it.

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Emerald Health and DeMesa likewise failed to disclose that (1) Emerald Health paid
for Mikula’s promotion of Emerald Health, and (2) investor funds would be used to
pay for Mikula’s promotion. Mikula failed to disclose that he was received
compensation for his articles promoting the Elegance and Emerald Health offerings,
contrary to the representations in the articles that he received no compensation from
the issuers.
138. By failing to disclose that he received compensation from the issuers for
his articles, Mikula obtained money or property by means of materially false and
misleading statements concerning his promotion of the Hightimes and
Cloudastructure offerings.
139. By engaging in the conduct described above, Mikula, Beri, Elegance,
Emerald Health, and DeMesa, and each of them, directly or indirectly, in the offer or
sale of securities, and by the use of means or instruments of transportation or
communication in interstate commerce or by use of the mails, directly or indirectly
obtained money or property by means of untrue statements of a material fact or by
omitting to state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading.
140. Mikula, Beri, Elegance, Emerald Health, and DeMesa, with scienter or
negligence, obtained money or property by means of untrue statements of a material
fact or by omitting to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading.
141. By engaging in the conduct described above, Mikula, Beri, Elegance,
Emerald Health, and DeMesa violated, and unless restrained and enjoined will
continue to violate, Section 17(a)(2) of the Securities Act, 15 U.S.C. § 77q(a)(2).

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FIFTH CLAIM FOR RELIEF
Nondisclosure of Compensation for Touting Stock
Violations of Section 17(b) of the Securities Act
(against Mikula)
142. The SEC realleges and incorporates by reference paragraphs 1 through
108 above.
143. Defendant Mikula violated the anti-touting provisions by concealing the
compensation he received for his promotions of Elegance, Emerald Health,
Hightimes, and Cloudastructure.  Mikula promoted these issuers’ stock through
articles he authored in the Palm Beach Venture newsletter without disclosing that
Mikula received compensation from the issuers.  Instead, each article falsely stated,
“[n]either the Palm Beach Research Group nor its affiliates receives compensation for
bringing this deal to you.”
144. By engaging in the conduct described above, Mikula, by the use of
means or instruments of transportation or communication in interstate commerce or
by the use of the mails, published, gave publicity to, or circulated notices, circulars,
advertisements, newspapers, articles, letters, investment services, or communications
which, though not purporting to offer a security for sale, described such security for a
consideration received or to be received, directly or indirectly, from an issuer,
underwriter, or dealer, without fully disclosing the receipt, whether past or
prospective, of such consideration and the amount thereof.
145. By engaging in the conduct described above, Mikula violated, and unless
restrained and enjoined will continue to violate, Section 17(b) of the Securities Act,
15 U.S.C. § 77q(b).

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SIXTH CLAIM FOR RELIEF
Aiding and Abetting
Violations of Section 17(b) of the Securities Act
(against Fernandez, Beri, and Dhillon)
146. The SEC realleges and incorporates by reference paragraphs 1 through
108 above.
147. Fe  rnandez, Beri, and Dhillon knowingly or recklessly provided
substantial assistance to Mikula’s violations of Section 17(b) of the Securities Act,
15 U.S.C. § 77q(b).
148. Beri substantially assisted Mikula’s violations when, acting in
conjunction with Mikula, he entered into an agreement with Emerald Health to
receive payments for the promotion with the knowledge that he would share a portion
of these payments with Mikula.
149. Dhillon substantially assisted Mikula’s violations when he facilitated   the
agreement between Beri’s brother and Emerald Health with the full understanding
that Mikula would receive a portion of the compensation.  Beri and Dhillon
understood that Mikula had an obligation to disclose compensation that he received in
exchange for promotion, and knew that the purpose of Beri acting as a consultant was
to conceal the payments and circumvent these obligations.
150. Fernandez substantially assisted Mikula’s violations when he submitted
sham invoices to Beri for Mikula’s share of the issuer payments, and both Beri and
Fernandez understood that Fernandez had not performed the services outlined in the
invoices.
151. In addition, Fernandez substantially assisted Mikula’s violations when
he assisted in negotiating an agreement with Cloudastructure for a portion of
proceeds from the promotion, submitted invoices directly to Cloudastructure for the
proceeds, and then funneled monies to accounts controlled by Mikula.
152. By engaging in the conduct described above, Fernandez, Beri, and

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Dhillon aided and abetted, and unless restrained and enjoined will continue to aid and
abet, Mikula’s violations of Section 17(b) of the Securities Act, 15 U.S.C. § 77q(b).
SEVENTH CLAIM FOR RELIEF
Unregistered Offer and Sale of Securities
Violations of Sections 5(a) and 5(c) of the Securities Act
(against Elegance and Beri)
153. The SEC realleges and incorporates by reference paragraphs 1 through
108 a bove.
154. As set forth above, Elegance lost its Reg A exemption in August 2019,
when it, through Beri, made fundamental changes to the terms of the offering by
increasing the number of securities outstanding, decreasing the price per security, and
adding warrants.  Elegance and Beri offered and sold approximately $20 million in
Elegance securities to investors in interstate commerce, without filing a registration
statement with the SEC, and without qualifying for any exemption from registration.
155. By engaging in the conduct described above, Elegance and Beri, and
each of them, directly or indirectly, singly and in concert with others, has made use of
the means or instruments of transportation or communication in interstate commerce,
or of the mails, to offer to sell or to sell securities, or carried or caused to be carried
through the mails or in interstate commerce, by means or instruments of
transportation, securities for the purpose of sale or for delivery after sale, when no
registration statement had been filed or was in effect as to such securities, and when
no exemption from registration was applicable.
156. By engaging in the conduct described above, Elegance and Beri have
violated, and unless restrained and enjoined, are reasonably likely to continue to
violate, Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) & 77e(c).
PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that the Court:

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I.
Issue findings of fact and conclusions of law that defendants committed the
alleged violations.
II.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
Civil Procedure, permanently enjoining Mikula, Fernandez, Beri, Elegance, Dhillon,
Emerald Health, and DeMesa, and their officers, agents, servants, employees, and
attorneys, and those persons in active concert or participation with any of them, who
receive actual notice of the judgment by personal service or otherwise, and each of
them, from violating Section 10(b) of the Exchange Act, 15 U.S.C. §§ 78j(b) and
Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.
III.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
Civil Procedure, permanently enjoining Mikula, Fernandez, Beri, Elegance, Dhillon,
Emerald Health, and DeMesa, and their officers, agents, servants, employees, and
attorneys, and those persons in active concert or participation with any of them, who
receive actual notice of the judgment by personal service or otherwise, and each of
them, from violating Section 17(a) of the Securities Act, 15 U.S.C. §77q(a).
IV.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
Civil Procedure, permanently enjoining Mikula, Fernandez, Beri, and Dhillon, and
their officers, agents, servants, employees, and attorneys, and those persons in active
concert or participation with any of them, who receive actual notice of the judgment
by personal service or otherwise, and each of them, from violating, directly or
indirectly, Section 17(b) of the Securities Act, 15 U.S.C. §77q(b).
V.
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of
Civil Procedure, permanently enjoining Beri and Elegance, and their officers, agents,

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servants, employees, and attorneys, and those persons in active concert or
participation with any of them, who receive actual notice of the judgment by personal
service or otherwise, and each of them, from violating Sections 5(a) and 5(c) of the
Securities Act, 15 U.S.C. §§ 77e(a) & 77e(c).
VI.
Order Mikula, Fernandez, and Beri to disgorge all funds received from their
illegal conduct, together with prejudgment interest thereon, pursuant to Exchange Act
Sections 21(d)(5) and 21(d)(7), 15 U.S.C. §§ 78u(d)(5) & 78u(d)(7).
VII.
Order Mikula, Fernandez, Beri, Elegance, Emerald Health, and DeMesa to pay
civil penalties under Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and
Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3).
VIII.
Enter an order against Beri, Dhillon, and DeMesa, pursuant to Section 20(e) of
the Securities Act, 15 U.S.C. § 77t(e), and Sections 2l(d)(2) of the Exchange Act, 15
U.S.C. § 78u(d)(2),  prohibiting each of them from acting as an officer or director of
any issuer that has a class of securities registered pursuant to Section 12 of the
Exchange Act, 15 U.S.C. § 78l or that is required to file reports pursuant to Section
15(d) of the Exchange Act, 15 U.S.C. § 78o(d).
IX.
Enter an order permanently enjoining Mikula and Fernandez from directly or
indirectly, including but not limited to, through any entity they own or control,
assisting with, facilitating, or receiving compensation in any form for a Promotional
Campaign related to any security.
Enter an order permanently enjoining Beri from directly or indirectly,
participating in a paid promotional campaign, unless an experienced securities lawyer
reviews the arrangement and affirms in writing that the arrangement is consistent
with applicable U.S. securities laws and regulations.

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‘Promotional Campaign’ means an effort, the goal of which is to generate
interest in any security by, directly or indirectly, publishing, giving publicity to, or
circulating any form of written communication, whether electronic or hard copy,
which, though not purporting to offer a security for sale, describes such security.
X.
Retain jurisdiction of this action in accordance with the principles of equity and
the Federal Rules of Civil Procedure in order to implement and carry out the terms of
all orders and decrees that may be entered, or to entertain any suitable application or
motion for additional relief within the jurisdiction of this Court.
XI.
Grant such other and further relief as this Court may determine to be just and
necessary.
Dated:  September 30, 2022

/s/ Charles E. Canter
Charles E. Canter
Sarah S. Nilson
Yolanda Ochoa
Attorneys   for Plaintiff
Securities and Exchange Commission

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CHARLES E. CANTER (Cal. Bar No. 263197) 
Email:  [email protected] 
SARAH S. NILSON (Cal. Bar No. 254574) 
Email:  [email protected] 
YOLANDA OCHOA (Cal. Bar No. 267993) 
Email:  [email protected] 
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
Michele Wein Layne, Regional Director 
Katharine Zoladz, Associate Regional Director 
Gary Y. Leung, Regional Trial Counsel 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Telephone: (323) 965-3998 
Facsimile: (213) 443-1904 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 
 

vs. 

JONATHAN WILLIAM MIKULA, 
CHRISTIAN FERNANDEZ, AMIT 
RAJ BERI, SWAY ENERGY 
CORPORATION, AVTAR SINGH 
DHILLON, EMERALD HEALTH 
PHARMACEUTICALS INC., and 
JAMES M. DEMESA, 

Defendants. 
 

 Case No. 
 
 
COMPLAINT 
 

 
 
 

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Plaintiff Securities and Exchange Commission (“SEC” or “Commission”) files 

this complaint against Defendants Jonathan William Mikula a/k/a William Mikula 

(“Mikula”), Christian Fernandez a/k/a Christian Crockwell (“Fernandez”), Amit Raj 

Beri a/k/a Raj Beri (“Beri”), Sway Energy Corporation f/k/a Elegance Brands, Inc. 

(“Elegance”), Avtar Singh Dhillon, M.D. (“Dhillon”), Emerald Health 

Pharmaceuticals, Inc. (“Emerald Health), and James DeMesa (“DeMesa”), and 

alleges: 

JURISDICTION 

1. The Court has jurisdiction over this action under Sections 20(b), 

20(d)(1), and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. 

§§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e), and 27(a) of 

the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78u(d)(1), 

78u(d)(3)(A), 78u(e) & 78aa(a). 

2. Defendants have, directly or indirectly, made use of the means or 

instrumentalities of interstate commerce, of the mails, or of the facilities of a national 

securities exchange in connection with the transactions, acts, practices and courses of 

business alleged in this complaint.  

3. Venue is proper in this district under Section 22(a) of the Securities Act, 

15 U.S.C. § 77v(a) and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), 

because certain of the transactions, acts, practices and courses of conduct constituting 

violations of the federal securities laws occurred within this district.  In addition, 

venue is proper in this district because Defendant Sway Energy Corporation has its 

principal place of business in this district. 

SUMMARY 

4. This securities fraud enforcement action involves a scheme to conceal 

paid promotion for securities offerings between at least 2019 and 2021. 

5. At the center of this scheme is Defendant Mikula, a recidivist violator of 

the federal securities laws.  Mikula, acting with various middlemen, including 

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Defendants Fernandez and Beri, promoted securities offerings to subscribers of the 

Palm Beach Venture newsletter for which Mikula was an author and chief analyst.  

While Mikula’s articles purported to be based on his independent analysis and 

claimed that no one associated with the Palm Beach Venture received compensation 

for the promotion, in reality Mikula secretly received compensation from the issuers 

of the promoted securities. 

6. Mikula carried out this scheme with respect to the securities offerings of 

at least four issuers: Elegance Brands, Emerald Health, Cloudastructure, Inc., and 

Hightimes Holding Corporation.  These four offerings were conducted (or purported 

to be conducted) pursuant to Regulation A (“Reg A”), which exempts certain 

qualified public securities offerings from the Securities Act’s registration provisions. 

7. Despite claiming that the promotions were not paid for, Mikula and 

others acting with him received millions of dollars in compensation in exchange for 

promoting the issuers’ Reg A offerings.  Mikula, acting with associates Fernandez 

and Beri, took extensive steps to deceive investors and conceal that the promotions 

were paid for by, among other things, arranging for the issuers to enter into sham 

consulting agreements, submitting false invoices for the illicit payments, and 

funneling payments for the promotion through multiple parties and accounts, many of 

which were foreign.   

8. During the period that Mikula deceptively promoted the Reg A offerings 

of Elegance, Emerald Health, Cloudastructure, and Hightimes, investors purchased 

more than $80 million in the securities of these companies.   

9. Fernandez played a central role in the promotional scheme.  Fernandez, a 

close associate of Mikula, was responsible for collecting and disbursing illicit funds 

related to the promotions.  Fernandez negotiated Mikula’s share of the proceeds with 

issuers and/or middlemen, sent sham invoices to collect Mikula’s share of the illicit 

proceeds, and funneled the proceeds through various entities and accounts—many of 

which were foreign—that he controlled.    

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10. Beri served the dual role of authorizing payments for promotion as CEO 

of Elegance, and acting as a middleman for Mikula’s promotions of Emerald Health 

and Hightimes.  Beri entered into a sham consulting contract with Emerald Health to 

collect payments in exchange for Mikula’s promotion of Emerald Health, and passed 

approximately half of the amount collected to Fernandez for the benefit of Mikula.    

11. Two of the issuers—Defendants Elegance and Emerald Health, along 

with several affiliated individuals, Defendants Beri, Dhillon (Emerald Health’s co-

founder), and DeMesa (Emerald Health’s CEO)—knew, or were reckless in not 

knowing, that investor funds paid for the Palm Beach Venture promotions of their 

Reg A offerings, thus participating in the scheme.  These issuers, acting through and 

with the approval and direction of Beri and DeMesa, made material 

misrepresentations and omissions to investors and in their filings with the 

Commission. 

12. In addition, Elegance and Beri offered and sold approximately $20 

million in Elegance securities to investors at a time when the offering was 

unregistered and not subject to a valid registration exemption.  Moreover, Elegance 

and Beri fed false information to Mikula to use in connection with the promotion of 

Elegance, and made several false and misleading disclosures in filings with the 

Commission and communications to investors, including falsely representing that the 

offering was conducted under a valid Reg A exemption and falsely stating that 

$530,000 and 8.9 million shares of Elegance stock were provided to a third party for 

“marketing” and “consulting services,” when in reality they were provided in 

exchange for Mikula’s promotion. 

13. Through their conduct:  (1) Defendants violated the antifraud provisions 

of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) thereunder, 

15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5(a) and (c), and the antifraud provisions 

of Sections 17(a)(1) and 17(a)(3) of the Securities Act, 15 U.S.C. § 77q(a)(1) and (3); 

(2) Mikula, Beri, Elegance, Emerald Health, and DeMesa violated the antifraud 

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provisions of Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder, 15 

U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5(b), and the antifraud provisions of Section 

17(a)(2) of the Securities Act, 15 U.S.C. § 77q(a)(2); (3) Mikula violated the anti-

touting provisions of Section 17(b) of the Securities Act, 15 U.S.C. § 77q(b); (4) 

Beri, Dhillon, and Fernandez aided and abetted Mikula’s violations of Section 17(b) 

of the Securities Act, 15 U.S.C. § 77q(b); and (5) Beri and Elegance violated the 

registration provisions of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. 

§§ 77e(a) & 77e(c).   

14. The SEC seeks permanent injunctions against future violations of 

Exchange Act Section 10(b) and Rule 10b-5 thereunder and Securities Act Sections 

17(a) and 17(b) and Sections 5(a) and 5(c); an order requiring Mikula, Fernandez, 

and Beri, to disgorge their ill-gotten gains with prejudgment interest; civil penalties 

against Mikula, Fernandez, Beri, Elegance, Emerald Health, and DeMesa; an order 

barring Beri, Dhillon, and DeMesa from serving as an officer or director of a public 

company; and an order enjoining Mikula, Fernandez, and Beri from participating in 

any campaign to promote stock or other securities for compensation.   

THE DEFENDANTS 

15. Jonathan William Mikula, a/k/a/ William Mikula, is a resident of 

Georgia, who, from at least 2019 through late 2021, was chief analyst and author of 

Palm Beach Venture, a newsletter published by Palm Beach Research Group.  He 

currently operates his own entity, POP Finance a/k/a The Deal Report, through which 

he recommends securities investments.  Mikula has been twice enjoined by federal 

courts, including this Court, from violating the federal securities laws:  In 2007, 

Judge Spencer Letts permanently enjoined Mikula from future violations of Sections 

5 and 17(a) of the Securities Act, 15 U.S.C. § 77e & 77q(a), and Section 10(b) of the 

Exchange Act, 15 U.S.C. § 78j(b) and Rule 10b-5, 17 C.F.R. §240.10b-5, and ordered 

Mikula to disgorge $106,671.08 in ill-gotten gains and prejudgment interest, SEC v. 

Phoenixsurf.com, et al., Case No. 2:07-cv-04765-JSL, ECF No. 6 (C.D. Cal. Aug. 14, 

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2007).  The Commission ultimately waived payment of monetary relief following 

Mikula’s submission of a sworn financial statement.  But Mikula lied on that 

statement and later pled guilty to providing false information to a federal agency, in 

violation of 18 U.S.C. § 1001, United States v. Mikula, Case No. 2:10-cr-00649-DSF, 

ECF No. 18 (C.D. Cal. Jan. 19, 2011).  In fact, Mikula lied about his receipt of funds 

from another securities fraud that resulted in another permanent injunction, this time 

entered by the District Court for the Northern District of Georgia, SEC v. Mikula, 

Case No. 1:08-cv-03097-BBM, ECF No. 95 (N.D. Ga. Sept. 24, 2009). 

16. Christian Fernandez a/k/a Christian Crockwell is a Mexican citizen 

residing in Georgia.  Fernandez controls the entities, including Nucleo de Negocios 

Dialin SA DE CV and Bench International LLC, through which the Defendant issuers 

funneled payments to Mikula in exchange for his promotion of their securities 

offerings.  

17. Amit Raj Beri a/k/a Raj Beri is an Australian national residing in 

Florida.  He moved to the United States in 2018 and founded Elegance, where he was 

the chief executive officer (“CEO”).  Beri was listed as the chief financial officer 

(“CFO”) in Elegance’s filings with the Commission. 

18. Sway Energy Corporation f/k/a Elegance Brands, Inc. is a beverage 

company incorporated in Delaware with its principal place of business in Los 

Angeles, California.  In January 2022, Elegance changed its name to Sway Energy 

Corporation. 

19. Avtar Singh Dhillon is a Canadian citizen residing in California.  

Dhillon co-founded Emerald Health and served as president and chairman of its board 

until 2019.  During the conduct described below, Dhillon served as a corporate 

finance consultant for the company and participated in meetings of the board of 

directors of Emerald Health as a board observer.  The Commission charged Dhillon 

in 2021 for his role in large-scale international microcap fraud schemes.  SEC v. 

Sharp, et al., Case No. 1:21-cv-11276-WGY, ECF No. 1 (D. Mass. Aug. 5, 2021), 

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ECF No. 1.  He was also criminally charged for his involvement in those schemes.  

United States v. Dhillon, 1:21-mj-07174-JCB, ECF No. 3 (D. Mass Aug. 3, 2021). 

20. Emerald Health Pharmaceuticals Inc. is a biopharmaceutical company 

incorporated in Delaware with its principal place of business in San Diego, 

California. 

21. James M. DeMesa is a resident of Florida and was the president and 

CEO of Emerald Health during the conduct described below. 

RELATED ENTITIES AND INDIVIDUALS 

22. Palm Beach Research Group is operated by Common Sense 

Publishing, LLC, a subsidiary of Market Wise, Inc., a U.S. public company.  Palm 

Beach Research Group publishes Palm Beach Venture, a subscription-based 

newsletter that focuses on opportunities for investors to invest in securities offered 

under Reg A.  Mikula was one of two attributed authors of the Palm Beach Venture 

newsletter. 

23. Hightimes Holding Corporation (“Hightimes”) is a Delaware 

corporation with its principal place of business in Los Angeles, California.  

Hightimes focuses on Cannabis related publications and platforms.  Hightimes 

received qualifications from the Commission to conduct Reg A offerings in March 

and July 2018.  Hightimes was promoted by Palm Beach Venture between April 2020 

and March 2021. 

24. Cloudastructure, Inc. (“Cloudastructure”) is a technology company 

incorporated in Delaware with its principal place of business in Miami, Florida.  

Cloudastructure received qualifications from the Commission to conduct Reg A 

offerings in July 2020, May 2021, and May 2022.  Cloudastructure was promoted by 

Palm Beach Venture between September 2020 and May 2021. 

THE ALLEGATIONS 

A. The Fraudulent Promotional Scheme 

25. Between at least 2019 through 2021, Mikula promoted at least four Reg 

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A issuers through the Palm Beach Venture newsletter, which falsely represented that 

his recommendation was based on his “own analysis” and that he did not receive 

compensation for “bringing this deal to you [the investor].” 

26. In fact, Mikula promoted the issuers in exchange for compensation that 

Mikula concealed from investors. 

27. As described below, Mikula typically introduced a middleman to the 

issuer that Palm Beach Venture planned to promote.  The middleman would then 

negotiate consulting or advisory agreements with the Reg A issuer with the 

understanding that the middleman would share a portion of the proceeds with Mikula.  

The agreements contained a generic description of services that the middleman would 

provide to the issuer, but in reality there was no expectation that the services would 

be provided; the agreement instead served the purpose of disguising compensation in 

exchange for the promotion.   

28. The payments to the consultants were typically tied to a percentage of 

investor proceeds from the Palm Beach Venture promotion.  The middlemen often 

submitted fake invoices to the issuers for services that were not performed.  Upon 

receipt of the payments from the issuer, the middlemen would retain a share of the 

compensation for their efforts, and funnel the remaining monies through accounts 

controlled by Fernandez—many of which were maintained offshore—for the benefit 

of Mikula. 

B. The Elegance Promotion   

29. The Commission qualified Elegance to conduct a Reg A offering in 

December 2018.   

30. Between December 2018 and August 2019, Elegance raised less than $1 

million. 

31. In August 2019, Beri was introduced to Mikula and began discussing 

possible promotion of Elegance by Palm Beach Venture.  

32. In August 2019, at the request of Mikula in anticipation of a promotion 

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by Palm Beach Venture, Elegance and Beri made changes to the terms of Elegance’s 

offering, including increasing the number of securities outstanding and adding 

warrants.   

33. For the Reg A exemption to remain available, these changes could only 

be accomplished through a new offering statement or post-qualification amendment 

qualified by the Commission.  Elegance did not prepare a new offering statement, nor 

did it obtain Commission approval for a post-qualification amendment.     

34. No other registration exemptions were available for Elegance’s sale of 

the securities after August 2019.  Thus, the securities that Elegance sold after August 

2019 were not registered and were not subject to any valid registration exemptions.   

35. At Mikula’s urging, and in order to “facilitate” the promotion, Elegance 

agreed to engage Individual 1, an associate of Mikula’s, and pay him 3% of investor 

funds raised through the promotion and provide him with 8.9 million shares of 

Elegance’s stock, which amounted to 10% of the company’s outstanding stock.   

36. Individual 1 joined Elegance’s board as a non-executive chairman, but 

provided no other services to Elegance. 

37. In September and October 2019, Mikula and Beri corresponded 

frequently concerning the content of the upcoming promotional article on Elegance. 

38. On or about October 7, 2019, Mikula emailed Beri: “Final issue that 

subscribers will see attached... Let the games begin…” (Ellipses original.) 

39. Mikula attached a Palm Beach Venture newsletter containing a 23-page 

article promoting the Elegance Reg A offering, entitled “We’re Buying the Next 

‘Best Performing Stock of the Century’ for 50 Cents.” 
   

40. Though nominally co-authored with the editor of Palm Beach Venture, 

Mikula, in fact, was the article’s author. 

41. The article contained a number of false and misleading statements, 

including: 

(a) That Gorilla Hemp, a product that Elegance was in the early stages of 

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formulating, was “poised to ship to stores”; 

(b) That Gorilla Hemp was retailing for $3.95 a can; 

(c) That Gorilla Hemp could yield Elegance a 2,630% price increase;   

(d) That Elegance had distribution agreements in place for Gorilla Hemp 

with the largest adult beverage distributer in the United States; and 

(e) That Elegance’s share price was projected to increase by 9,900% in five 

years. 

42. Elegance and Beri either provided false and misleading information to 

Mikula, or knew it was included in the article and never corrected it. 

43. In addition to the false and misleading information described above, 

Mikula’s promotional article, under the heading “How to Invest in Elegance Brands,” 

provided contact information, including a website link, a phone number, and an email 

address where investors would “have the option to invest in Elegance by check, 

ACH, credit card, wire transfer, or through an IRA.” 

44. The article advised, “if you’d like to act, do so quickly. With the amount 

of anticipated demand, this deal won’t be available long.” 

45. The article included this “Important Note”: 

Neither the Palm Beach Research Group nor its affiliates receive 

compensation for bringing this deal to you. As publishers of financial 

information, we make general recommendations based on our own 

analysis. 

46. Another version of the article released in January 2020 included that 

same “Important Note,” as well as a disclaimer stating that “Palm Beach Research 

Group writers and publications do not take compensation in any form for covering 

those securities or commodities.”   

47. In fact, Mikula received from Elegance more than $80,000 in 

entertainment, including meals, nightclubs, and first class airfare, in exchange for his 

promotion of Elegance.  

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48. In late 2019 and early 2020, to ensure the success of the Palm Beach 

Venture promotion, Elegance and Beri made a number of misstatements and material 

omissions of fact in its Commission filings, press releases, and other communications 

with prospective investors, including: 

(a) Falsely representing that Elegance was conducting an offering pursuant 

to a valid Reg A exemption;   

(b) Misrepresenting that $530,000 of investor funds and 8.9 million shares 

of Elegance stock were provided to Individual 1 in exchange for “marketing” 

and “consulting services,” and omitting that they were provided in exchange 

for the promotion; 

(c) Failing to disclose that Elegance used more than $80,000 in investor 

funds to entertain Mikula and his associates in exchange for the promotion; and 

(d) Failing to include in its related party disclosures a share purchase 

agreement between Elegance and an entity owned by Beri and a payment of 

$1.7 million to Beri in December 2019 in connection with that agreement.   

49. Elegance and Beri engaged in a scheme to defraud investors by making 

the misstatements and omissions above and by engaging in related manipulative acts 

to raise funds through the Palm Beach promotion.  For example, Elegance and Beri: 

(a) Represented Palm Beach to be an “independent” third party; 

(b) Directly provided Mikula with false information that was used in the 

Palm Beach Venture articles; and 

(c) Circulated the article containing the falsities to investors, and directed its 

call center to use the article containing false information with prospective 

investors. 

50. Palm Beach Venture promoted Elegance between October 2019 and 

February 2020.   

51. During the promotion, Elegance raised approximately $20 million in 

investor funds, of which Elegance paid $530,000 to Individual 1.   

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52. The securities that Elegance sold during the promotion were not 

registered, and were not subject to any valid registration exemption. 

C. The Emerald Health Promotion 

53. Founded in 2017, Emerald Health is a biopharmaceutical company 

focused on developing cannabinoid-derived drug products to treat autoimmune and 

neurodegenerative diseases.   

54. From 2020 through 2021, Emerald Health and members of its leadership 

participated in a fraudulent promotional scheme, paying undisclosed compensation 

for Mikula’s recommendation in the Palm Beach Venture newsletter. 

55. The scheme began in 2019 when Emerald Health contacted Palm Beach 

Venture about the possibility of the newsletter featuring Emerald Health. 

56. On or about October 9, 2019, Mikula met DeMesa, Emerald Health’s 

president and CEO, at a conference and introduced DeMesa to Beri. 

57. In November 2019, DeMesa, Dhillon, and others from Emerald Health 

met Mikula and Beri for lunch, at which Beri was introduced to Dhillon.  

58. In early 2020, Dhillon, who was the co-founder, former president and 

chairman of the board, and corporate finance consultant for Emerald Health, worked 

with Beri on a plan to have Emerald Health secretly pay Mikula to tout Emerald 

Health’s Reg A offering through Palm Beach Venture. 

59. Regarding the proposed Emerald Health promotional scheme, Beri and 

Mikula exchanged the following text messages on or about January 14, 2020: 

Beri:  $200k cash and 2,000,000 shares 

And we can go halves on both. 

Once I get shares I can transfer to your Vegas company 

Mikula: We’d seek to publish on Monday March 9 

So a week late but our r[e]adars wouldn’t mind if the story is good 

enough 

Beri:  Ok great 👍👍👍👍 

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Don’t lock it in 

Let me get us our $$ and shares first 

Mikula: Sounds good 👌👌 
60. On the same day, in a WhatsApp exchange with Dhillon, Beri wrote, “I 

spoke with William at 1 pm and I can guarantee some things if you can look after 

him, which I told him you can. Want to speak to you before I lock it in.” 

61. Dhillon understood that Beri was referring to compensating Mikula for 

his promotion of Emerald Health. 

62. Based on this plan, Emerald Health would covertly transfer funds to 

Mikula by engaging Beri’s brother to ostensibly provide consulting services for the 

company.   

63. In turn, Beri’s brother would funnel a portion of his consulting fees to 

Mikula, and keep a portion for brokering this fraudulent deal.   

64. After agreeing to this scheme, Dhillon urged DeMesa to enter into sham 

consulting agreements with Beri and Beri’s brother (an Australian resident) to 

procure Mikula’s promotion.   

65. DeMesa initially had reservations about entering into these consulting 

agreements because he was “uncomfortable” with the arrangement with Beri.  

DeMesa questioned whether Beri was engaging in “blackmail” and whether Mikula 

could lose his job if Emerald Health exposed the terms of Beri’s proposal.     

66. Between March 2020 and July 2020, DeMesa had several meetings with 

Beri to discuss prospective consulting agreements with Beri and Beri’s brother.   

67. Through these meetings, DeMesa came to understand that Beri had a 

strong relationship with Mikula and would be influential over the decision of whether 

Mikula would recommend Emerald Health through Palm Beach. 

68. DeMesa considered Palm Beach Venture’s subscribers a promising 

source of the investor capital Emerald Health needed to pursue clinical studies, cover 

employee salaries, and satisfy other operational expenses.  

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69. DeMesa understood that the company would be paying Beri to help 

influence Mikula to promote Emerald Health, and DeMesa knew, or was reckless in 

not knowing, that Mikula would receive compensation for promoting Emerald 

Health. 

70. By the end of July 2020, DeMesa, on behalf of Emerald Health, entered 

into sham consulting agreements with Beri and his brother, agreeing to pay Beri 6% 

of investor funds raised through Palm Beach’s promotional efforts.   

71. DeMesa drafted the agreement with Beri’s brother and negotiated the 

terms of the agreement with Beri.   

72. Emerald Health’s written agreement with Beri failed to identify that his 

compensation was tied to Palm Beach’s promotional efforts and that he would be 

receiving a percentage of the funds raised.   

73. In February and March, 2020, Mikula authored a Palm Beach Venture 

article titled “Curing Incurable Diseases and Giving Us Over 4,900% Potential 

Gains,” which touted Emerald Health and was distributed to the newsletter’s 

subscribers.  

74. The article concluded with a section “How to Invest in Emerald Health 

Pharmaceuticals” and provided contact information, including a phone number, email 

address, and website where subscribers could purchase Emerald Health stock as part 

of Emerald Health’s Reg A offering. 

75. The article advised subscribers, “if you’d like to act, do so quickly.” 

76. Finally, the article contained an “Important Note” falsely claiming that 

“[n]either the Palm Beach Research Group nor its affiliates receive compensation for 

bringing this deal to you.” 

77. On or about March 2, 2020, Mikula shared his promotional article with 

Dhillon and DeMesa before it was circulated to prospective investors, and neither 

Dhillon nor DeMesa raised any issue with the false disclaimer.   

78. In late summer 2020, Mikula authored another Palm Beach Venture 

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article touting Emerald Health entitled “The Next Aspirin.”  

79. This article also contained information for how subscribers could invest 

in the Emerald Health Reg A offering and also contained an “Important Note” that 

“[n]either the Palm Beach Research Group nor its affiliates receive compensation for 

bringing this deal to you.”  In addition, an endnote stated, “Palm Beach Research 

Group writers and publications do not take compensation in any form for covering 

those securities or commodities.” 

80. In fact, between June 2020 and May 2021, Emerald Health paid the 

Beris $1.7 million collectively ($1.6 million to Beri and $100,000 to his brother).  

The company also issued 100,000 shares of Emerald Health stock, valued at 

$600,000 at the time of issuance, to Beri’s brother. 

81. Despite his substantial compensation, valued at $700,000, Beri’s brother 

performed no consulting services for Emerald Health during the six months in which 

he was engaged as a consultant for the company. 

82. Fernandez was responsible for collecting Mikula’s share of the monies 

from Emerald Health.  Fernandez submitted sham invoices to Beri for these amounts.  

The invoices contained false descriptions, such as “Consulting for Developing Agave 

Syrup Phase 2.”   

83. Beri and his brother transferred approximately $700,000 of the funds 

they received from Emerald Health to Mikula and Fernandez, as their share of the 

payment for Mikula’s promotional campaign.  Over $100,000 was paid directly to 

Mikula and Fernandez, and the balance was paid through entities controlled by 

Fernandez to entities controlled by Mikula. 

84. For example, between July 9, 2020, and September 9, 2020, in four 

transfers ranging in amounts from $9,996.08 to $ 49,996.12, Beri’s brother paid 

$79,992.20 to Nucleo de Negocios Dialin SA DE CV, an entity controlled by 

Fernandez. 

85. On September 25, 2020, at Fernandez’s request, Beri provided him with 

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$30,000 in cash.   

86. Between October 10, 2020, and February 11, 2021, in four separate 

transfers ranging in amounts from $2,500 to $70,000, Beri transferred $78,500 from 

Beri Holdings, LLC to Fernandez. 

87. Between November 9, 2020, and May 28, 2021, in six transfers ranging 

in amounts from $30,000 to $200,000, Beri transferred $607,500 to Nucleo de 

Negocios Dialin SA DE CV. 

88. It was Beri’s understanding that the monies paid to Fernandez were for 

the benefit of Mikula.  Between September 15, 2020, and December 6, 2021, in 21 

transfers ranging in amounts from $1,666.66 to $54,000, Fernandez transferred at 

least $155,000 to New Age Vending LLC, an entity controlled by Mikula. 

89. Moreover, in a quarterly update to its investors, Emerald Health 

highlighted that Palm Beach Venture recommended the company “as an attractive 

investment opportunity” without disclosing that this was a paid-for recommendation.  

90.  DeMesa approved the quarterly update and directed that it be sent to 

investors and posted on the company’s public website. 

91. Throughout 2020, Emerald Health filed offering circulars with the 

Commission that included, as exhibits, the agreements with Beri and his brother.  

These circulars misled investors about the true nature of these consulting agreements 

and failed to disclose that the company was paying for the Palm Beach Venture 

promotion.   

92. DeMesa knew, or was reckless in not knowing, that the offering circulars 

and its exhibits failed to disclose that Beri’s agreement was linked to Palm Beach 

Venture’s efforts and that Beri was receiving 6% of funds raised from Palm Beach 

Venture subscribers.  Nevertheless, he prepared, reviewed, approved, and signed the 

filings. 

93. Emerald Health raised approximately $30 million from thousands of 

investors through Mikula’s promotion. 

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D. The Hightimes and Cloudastructure Promotions 

94. Mikula also falsely stated that he did not receive compensation in 

connection with the promotion of at least two other Reg A issuers: Hightimes 

Holding between April 2020 and March 2021, and Cloudastructure between 

September 2020 and May 2021.   

95. The Palm Beach Venture promotional articles on Hightimes and 

Cloudastructure again included the “Important Note” that “[n]either the Palm Beach 

Research Group nor its affiliates receive compensation for bringing this deal to you,” 

and further stated that “Palm Beach Research Group writers and publications do not 

take compensation in any form for covering those securities or commodities.” 

96. In February 2020, Beri began negotiating a consulting agreement with 

Hightimes, representing that he would facilitate a promotion by Palm Beach Venture 

if Hightimes would pay him a percentage of investor funds raised through the 

promotion.   

97. Beri coordinated with Mikula and agreed that he would share a portion 

of any funds received from Hightimes with Mikula.   

98. Hightimes ultimately entered into an agreement to pay Entity 1, a 

Canadian entity controlled by Individual 2, 5% of the funds raised through the Palm 

Beach promotion.   

99. Beri, Individual 2, Fernandez, and Mikula agreed that they would all 

receive a share of monies that Entity 1 received from Hightimes.   

100. The purpose of using a Canadian entity and offshore account was to 

conceal that payments from Hightimes would go to Mikula.   

101. Beri submitted sham invoices to Individual 2 for his share of the 

payments from Hightimes.  Hightimes paid at least $150,000 to Entity 1, which was 

then disbursed to Individual 2, Fernandez, Beri, and Mikula. 

102. In February 2020, Beri began negotiating a consulting agreement with 

Cloudastructure, informing Cloudastructure’s CEO that Palm Beach Venture would 

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promote the company if Cloudastructure paid Beri a percentage of investor funds 

raised.   

103. Beri entered into these negotiations with the intent to share half of any 

amounts received from Cloudastructure with Mikula.   

104. Beri’s negotiations were not successful, and Mikula subsequently 

introduced Fernandez to Cloudastructure. 

105. In September 2020, Cloudastructure entered into a consulting agreement 

with Entity 2, a Canadian entity.   

106. The consulting agreement provided that Entity 2 would receive certain 

fees based on the amounts raised from the Palm Beach promotion.     

107. Fernandez negotiated the agreement on behalf of Entity 2 and submitted 

invoices for Entity 2’s agreed-upon share of investor proceeds raised through the 

Palm Beach Venture promotion.   

108. Cloudastructure ultimately paid Entity 2 $650,000, which was 

distributed at least in part to entities controlled by Mikula and Fernandez. 

FIRST CLAIM FOR RELIEF 

Fraud in Connection with the Purchase or Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) 

(against all Defendants) 

109. The SEC realleges and incorporates by reference paragraphs 1 through 

108 above. 

110. Mikula, Beri, and Elegance carried out a scheme to defraud, through the 

combination of their deceptive statements and actions concerning the Elegance 

offering. Throughout the promotional campaign, defendants concealed the 

compensation paid to Mikula, in the form of entertainment expenses, in exchange for 

Mikula’s promotion of the Elegance offering. 

111. Mikula, Fernandez, Beri, Dhillon, Emerald Health, and DeMesa carried 

out a scheme to defraud, through the combination of their deceptive statements and 

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actions concerning the Emerald Health offering. Throughout the promotional 

campaigns, defendants concealed the compensation paid to Mikula, through 

Fernandez and/or Beri and others in exchange for Mikula’s promotion of the Emerald 

Health offering. 

112. Mikula, Fernandez, and Beri carried out a scheme to defraud, through 

the combination of their deceptive statements and actions concerning the Hightimes 

offering. Throughout the promotional campaign, defendants concealed the 

compensation paid to Mikula, through Fernandez, Beri, and others, in exchange for 

Mikula’s promotion of the Hightimes offering. 

113. Mikula and Fernandez carried out a scheme to defraud, through the 

combination of their deceptive statements and actions concerning the Cloudastructure 

offering. Throughout the promotional campaign, defendants concealed the 

compensation paid to Mikula, through Fernandez, in exchange for Mikula’s 

promotion of the Cloudastructure offering. 

114. By engaging in the conduct described above, Mikula, Fernandez, Beri, 

Elegance, Dhillon, Emerald Health, and DeMesa and each of them, directly or 

indirectly, in connection with the purchase or sale of a security, and by the use of 

means or instrumentalities of interstate commerce, of the mails, or of the facilities of 

a national securities exchange:  (a) employed devices, schemes, or artifices to 

defraud; and (b) engaged in acts, practices, or courses of business which operated or 

would operate as a fraud or deceit upon other persons. 

115. Mikula, Fernandez, Beri, Elegance, Dhillon, Emerald Health, and 

DeMesa, with scienter, employed devices, schemes, and artifices to defraud; and 

engaged in acts, practices, or courses of conduct that operated as a fraud on the 

investing public by the conduct described in detail above. 

116. By engaging in the conduct described above, Mikula, Fernandez, Beri, 

Elegance, Dhillon, Emerald Health, and DeMesa violated, and unless restrained and 

enjoined will continue to violate, Section 10(b) of the Exchange Act, 15 U.S.C. 

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§ 78j(b), and Rules 10b-5(a) and 10b-5(c) thereunder, 17 C.F.R. §§ 240.10b-5(a) and 

240.10b-5(c). 

SECOND CLAIM FOR RELIEF 

Fraud in Connection with the Purchase or Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) 

(against Mikula, Beri, Elegance, Emerald Health, and DeMesa) 

117. The SEC realleges and incorporates by reference paragraphs 1 through 

108 above. 

118. Mikula, Beri, and Elegance made materially false and misleading 

statements concerning Mikula’s promotion of the Elegance offering. 

119. Mikula, Emerald Health, and DeMesa made materially false and 

misleading statements concerning Mikula’s promotion of the Emerald Health 

offering.   

120. Beri and Elegance, in filings with the Commission, misrepresented that 

the payments to Individual 1 were for Mikula’s promotion of Elegance and they 

falsely informed investors that they were qualified to engage in a Reg A offering.  In 

addition, Beri and Elegance also failed to disclose that investor funds would be used 

to pay for Mikula’s promotion and failed to disclose a related party transaction and 

$1.7 million payment to Beri. In addition, Elegance and Beri either provided false and 

misleading information to Mikula for inclusion in promotional articles to investors, 

and knew false and misleading information was included in those articles and never 

corrected it. 

121. Beri, as CEO of Elegance, controlled the content of Elegance’s filings 

with the Commission and thus exercised ultimate authority over the statements 

contained in the filings. 

122. Similarly, Emerald Health and DeMesa likewise failed to disclose that 

(1) Emerald Health paid for Mikula’s promotion of Emerald Health, and (2) investor 

funds would be used to pay for Mikula’s promotion.  In addition, Emerald Health and 

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DeMesa made material misrepresentations in offering circulars and a quarterly 

investor update, falsely implying that Beri and his brother were providing legitimate 

consulting services to Emerald Health and that the recommendation by Mikula in the 

Palm Beach Venture newsletter was an independent and objective third-party 

recommendation. 

123. DeMesa, as Emerald Health’s president and CEO, controlled and 

approved the content and exercised ultimate authority over the statements in the 

offering circulars and the quarterly investor update. 

124. Mikula knew, or was reckless in not knowing, that the promotional 

articles he authored for the Elegance, Emerald Health, Hightimes, and 

Cloudastructure promotions represented to Palm Beach Venture subscribers he did 

not receive compensation from the issuers for the articles.   

125. By engaging in the conduct described above, Mikula, Beri, Elegance, 

Emerald Health, and DeMesa, and each of them, directly or indirectly, in connection 

with the purchase or sale of a security, and by the use of means or instrumentalities of 

interstate commerce, of the mails, or of the facilities of a national securities exchange, 

made untrue statements of a material fact or omitted to state a material fact necessary 

in order to make the statements made, in the light of the circumstances under which 

they were made, not misleading.  

126. Mikula, Beri, Elegance, Emerald Health, and DeMesa, with scienter, 

made untrue statements of a material fact or omitted to state a material fact necessary 

in order to make the statements made, in the light of the circumstances under which 

they were made, not misleading, by the conduct described in detail above. 

127. By engaging in the conduct described above, Mikula, Beri, Elegance, 

Emerald Health, and DeMesa violated, and unless restrained and enjoined will 

continue to violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 

10b-5(b) thereunder, 17 C.F.R. § 240.10b-5(b). 

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THIRD CLAIM FOR RELIEF 

Fraud in the Offer or Sale of Securities 

Violations of Sections 17(a)(1) and (3) of the Securities Act 

(against all Defendants) 

128. The SEC realleges and incorporates by reference paragraphs 1 through 

108 above. 

129. Mikula, Beri, and Elegance carried out a scheme to defraud, through the 

combination of their deceptive statements and actions concerning the Elegance 

offering. Throughout the promotional campaigns, defendants concealed the 

compensation paid to Mikula, through and others in exchange for Mikula’s promotion 

of the Elegance offering. 

130. Mikula, Fernandez, Beri, Dhillon, Emerald Health, and DeMesa carried 

out a scheme to defraud, through the combination of their deceptive statements and 

actions concerning the Emerald Health offering. Throughout the promotional 

campaigns, defendants concealed the compensation paid to Mikula, through 

Fernandez and/or Beri and others in exchange for Mikula’s promotion of the Emerald 

Health offering. 

131. Mikula, Fernandez, and Beri carried out a scheme to defraud, through 

the combination of their deceptive statements and actions concerning the Hightimes 

offering. Throughout the promotional campaign, defendants concealed the 

compensation paid to Mikula, through Fernandez, Beri, and others, in exchange for 

Mikula’s promotion of the Hightimes offering. 

132. Mikula and Fernandez carried out a scheme to defraud, through the 

combination of their deceptive statements and actions concerning the Cloudastructure 

offering. Throughout the promotional campaign, defendants concealed the 

compensation paid to Mikula, through Fernandez, in exchange for Mikula’s 

promotion of the Cloudastructure offering. 

133. By engaging in the conduct described above, Mikula, Fernandez, Beri, 

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Elegance, Dhillon, Emerald Health, and DeMesa, and each of them, directly or 

indirectly, in the offer or sale of securities, and by the use of means or instruments of 

transportation or communication in interstate commerce or by use of the mails 

directly or indirectly:  (a) employed devices, schemes, or artifices to defraud; and (b) 

engaged in transactions, practices, or courses of business which operated or would 

operate as a fraud or deceit upon the purchaser. 

134. Mikula, Fernandez, Beri, Elegance, Dhillon, Emerald Health, and 

DeMesa, with scienter, employed devices, schemes, and artifices to defraud; and, 

with scienter or negligence, engaged in transactions, practices, or courses of business 

which operated or would operate as a fraud or deceit upon the purchaser. 

135. By engaging in the conduct described above, Mikula, Fernandez, Beri, 

Elegance, Dhillon, Emerald Health, and DeMesa violated, and unless restrained and 

enjoined will continue to violate, Sections 17(a)(1) and 17(a)(3) of the Securities Act, 

15 U.S.C. §§ 77q(a)(1) and 77q(a)(3). 

FOURTH CLAIM FOR RELIEF 

Fraud in the Offer or Sale of Securities 

Violations of Section 17(a)(2) of the Securities Act 

(against Mikula, Beri, Elegance, Emerald Health, and DeMesa) 

136. The SEC realleges and incorporates by reference paragraphs 1 through 

108 above. 

137. Mikula, Beri, Elegance, Emerald Health, and DeMesa obtained money 

or property by means of materially false and misleading statements concerning 

Mikula’s promotion of the Elegance and Emerald Health offerings.  Specifically, Beri 

and Elegance failed to disclose that (1) payments to Individual 1 were for Mikula’s 

promotion of Elegance, and (2) investor funds would be used to pay for Mikula’s 

promotion.  In addition, Elegance and Beri either provided false and misleading 

information to Mikula for inclusion in promotional articles to investors, and knew 

false and misleading information was included in those articles and never corrected it.  

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Emerald Health and DeMesa likewise failed to disclose that (1) Emerald Health paid 

for Mikula’s promotion of Emerald Health, and (2) investor funds would be used to 

pay for Mikula’s promotion. Mikula failed to disclose that he was received 

compensation for his articles promoting the Elegance and Emerald Health offerings, 

contrary to the representations in the articles that he received no compensation from 

the issuers. 

138. By failing to disclose that he received compensation from the issuers for 

his articles, Mikula obtained money or property by means of materially false and 

misleading statements concerning his promotion of the Hightimes and 

Cloudastructure offerings.   

139. By engaging in the conduct described above, Mikula, Beri, Elegance, 

Emerald Health, and DeMesa, and each of them, directly or indirectly, in the offer or 

sale of securities, and by the use of means or instruments of transportation or 

communication in interstate commerce or by use of the mails, directly or indirectly 

obtained money or property by means of untrue statements of a material fact or by 

omitting to state a material fact necessary in order to make the statements made, in 

light of the circumstances under which they were made, not misleading. 

140. Mikula, Beri, Elegance, Emerald Health, and DeMesa, with scienter or 

negligence, obtained money or property by means of untrue statements of a material 

fact or by omitting to state a material fact necessary in order to make the statements 

made, in light of the circumstances under which they were made, not misleading. 

141. By engaging in the conduct described above, Mikula, Beri, Elegance, 

Emerald Health, and DeMesa violated, and unless restrained and enjoined will 

continue to violate, Section 17(a)(2) of the Securities Act, 15 U.S.C. § 77q(a)(2). 

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FIFTH CLAIM FOR RELIEF 

Nondisclosure of Compensation for Touting Stock 

Violations of Section 17(b) of the Securities Act 

(against Mikula) 

142. The SEC realleges and incorporates by reference paragraphs 1 through 

108 above. 

143. Defendant Mikula violated the anti-touting provisions by concealing the 

compensation he received for his promotions of Elegance, Emerald Health, 

Hightimes, and Cloudastructure.  Mikula promoted these issuers’ stock through 

articles he authored in the Palm Beach Venture newsletter without disclosing that 

Mikula received compensation from the issuers.  Instead, each article falsely stated, 

“[n]either the Palm Beach Research Group nor its affiliates receives compensation for 

bringing this deal to you.” 

144. By engaging in the conduct described above, Mikula, by the use of 

means or instruments of transportation or communication in interstate commerce or 

by the use of the mails, published, gave publicity to, or circulated notices, circulars, 

advertisements, newspapers, articles, letters, investment services, or communications 

which, though not purporting to offer a security for sale, described such security for a 

consideration received or to be received, directly or indirectly, from an issuer, 

underwriter, or dealer, without fully disclosing the receipt, whether past or 

prospective, of such consideration and the amount thereof.  

145. By engaging in the conduct described above, Mikula violated, and unless 

restrained and enjoined will continue to violate, Section 17(b) of the Securities Act, 

15 U.S.C. § 77q(b). 

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SIXTH CLAIM FOR RELIEF 

Aiding and Abetting  

Violations of Section 17(b) of the Securities Act 

(against Fernandez, Beri, and Dhillon) 

146. The SEC realleges and incorporates by reference paragraphs 1 through 

108 above. 

147. Fernandez, Beri, and Dhillon knowingly or recklessly provided 

substantial assistance to Mikula’s violations of Section 17(b) of the Securities Act, 

15 U.S.C. § 77q(b). 

148. Beri substantially assisted Mikula’s violations when, acting in 

conjunction with Mikula, he entered into an agreement with Emerald Health to 

receive payments for the promotion with the knowledge that he would share a portion 

of these payments with Mikula.   

149. Dhillon substantially assisted Mikula’s violations when he facilitated the 

agreement between Beri’s brother and Emerald Health with the full understanding 

that Mikula would receive a portion of the compensation.  Beri and Dhillon 

understood that Mikula had an obligation to disclose compensation that he received in 

exchange for promotion, and knew that the purpose of Beri acting as a consultant was 

to conceal the payments and circumvent these obligations.   

150. Fernandez substantially assisted Mikula’s violations when he submitted 

sham invoices to Beri for Mikula’s share of the issuer payments, and both Beri and 

Fernandez understood that Fernandez had not performed the services outlined in the 

invoices.   

151. In addition, Fernandez substantially assisted Mikula’s violations when 

he assisted in negotiating an agreement with Cloudastructure for a portion of 

proceeds from the promotion, submitted invoices directly to Cloudastructure for the 

proceeds, and then funneled monies to accounts controlled by Mikula. 

152. By engaging in the conduct described above, Fernandez, Beri, and 

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Dhillon aided and abetted, and unless restrained and enjoined will continue to aid and 

abet, Mikula’s violations of Section 17(b) of the Securities Act, 15 U.S.C. § 77q(b). 

SEVENTH CLAIM FOR RELIEF 

Unregistered Offer and Sale of Securities 

Violations of Sections 5(a) and 5(c) of the Securities Act 

(against Elegance and Beri) 

153. The SEC realleges and incorporates by reference paragraphs 1 through 

108 above. 

154. As set forth above, Elegance lost its Reg A exemption in August 2019, 

when it, through Beri, made fundamental changes to the terms of the offering by 

increasing the number of securities outstanding, decreasing the price per security, and 

adding warrants.  Elegance and Beri offered and sold approximately $20 million in 

Elegance securities to investors in interstate commerce, without filing a registration 

statement with the SEC, and without qualifying for any exemption from registration. 

155. By engaging in the conduct described above, Elegance and Beri, and 

each of them, directly or indirectly, singly and in concert with others, has made use of 

the means or instruments of transportation or communication in interstate commerce, 

or of the mails, to offer to sell or to sell securities, or carried or caused to be carried 

through the mails or in interstate commerce, by means or instruments of 

transportation, securities for the purpose of sale or for delivery after sale, when no 

registration statement had been filed or was in effect as to such securities, and when 

no exemption from registration was applicable. 

156. By engaging in the conduct described above, Elegance and Beri have 

violated, and unless restrained and enjoined, are reasonably likely to continue to 

violate, Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) & 77e(c).  

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that the Court: 

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I. 

Issue findings of fact and conclusions of law that defendants committed the 

alleged violations. 

II. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Mikula, Fernandez, Beri, Elegance, Dhillon, 

Emerald Health, and DeMesa, and their officers, agents, servants, employees, and 

attorneys, and those persons in active concert or participation with any of them, who 

receive actual notice of the judgment by personal service or otherwise, and each of 

them, from violating Section 10(b) of the Exchange Act, 15 U.S.C. §§ 78j(b) and 

Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5. 

III. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Mikula, Fernandez, Beri, Elegance, Dhillon, 

Emerald Health, and DeMesa, and their officers, agents, servants, employees, and 

attorneys, and those persons in active concert or participation with any of them, who 

receive actual notice of the judgment by personal service or otherwise, and each of 

them, from violating Section 17(a) of the Securities Act, 15 U.S.C. §77q(a). 

IV. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Mikula, Fernandez, Beri, and Dhillon, and 

their officers, agents, servants, employees, and attorneys, and those persons in active 

concert or participation with any of them, who receive actual notice of the judgment 

by personal service or otherwise, and each of them, from violating, directly or 

indirectly, Section 17(b) of the Securities Act, 15 U.S.C. §77q(b). 

V. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Beri and Elegance, and their officers, agents, 

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servants, employees, and attorneys, and those persons in active concert or 

participation with any of them, who receive actual notice of the judgment by personal 

service or otherwise, and each of them, from violating Sections 5(a) and 5(c) of the 

Securities Act, 15 U.S.C. §§ 77e(a) & 77e(c). 

VI. 

Order Mikula, Fernandez, and Beri to disgorge all funds received from their 

illegal conduct, together with prejudgment interest thereon, pursuant to Exchange Act 

Sections 21(d)(5) and 21(d)(7), 15 U.S.C. §§ 78u(d)(5) & 78u(d)(7). 

VII. 

Order Mikula, Fernandez, Beri, Elegance, Emerald Health, and DeMesa to pay 

civil penalties under Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and 

Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). 

VIII. 

Enter an order against Beri, Dhillon, and DeMesa, pursuant to Section 20(e) of 

the Securities Act, 15 U.S.C. § 77t(e), and Sections 2l(d)(2) of the Exchange Act, 15 

U.S.C. § 78u(d)(2), prohibiting each of them from acting as an officer or director of 

any issuer that has a class of securities registered pursuant to Section 12 of the 

Exchange Act, 15 U.S.C. § 78l or that is required to file reports pursuant to Section 

15(d) of the Exchange Act, 15 U.S.C. § 78o(d). 

IX. 

Enter an order permanently enjoining Mikula and Fernandez from directly or 

indirectly, including but not limited to, through any entity they own or control, 

assisting with, facilitating, or receiving compensation in any form for a Promotional 

Campaign related to any security.  

Enter an order permanently enjoining Beri from directly or indirectly, 

participating in a paid promotional campaign, unless an experienced securities lawyer 

reviews the arrangement and affirms in writing that the arrangement is consistent 

with applicable U.S. securities laws and regulations.  

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‘Promotional Campaign’ means an effort, the goal of which is to generate 

interest in any security by, directly or indirectly, publishing, giving publicity to, or 

circulating any form of written communication, whether electronic or hard copy, 

which, though not purporting to offer a security for sale, describes such security.  

X. 

Retain jurisdiction of this action in accordance with the principles of equity and 

the Federal Rules of Civil Procedure in order to implement and carry out the terms of 

all orders and decrees that may be entered, or to entertain any suitable application or 

motion for additional relief within the jurisdiction of this Court. 

XI. 

Grant such other and further relief as this Court may determine to be just and 

necessary. 

Dated:  September 30, 2022  
 /s/ Charles E. Canter  

Charles E. Canter 
Sarah S. Nilson 
Yolanda Ochoa 
Attorneys for Plaintiff 
Securities and Exchange Commission 

 

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	A. The Fraudulent Promotional Scheme
	B. The Elegance Promotion
	(a) That Gorilla Hemp, a product that Elegance was in the early stages of formulating, was “poised to ship to stores”;
	(b) That Gorilla Hemp was retailing for $3.95 a can;
	(c) That Gorilla Hemp could yield Elegance a 2,630% price increase;
	(d) That Elegance had distribution agreements in place for Gorilla Hemp with the largest adult beverage distributer in the United States; and
	(e) That Elegance’s share price was projected to increase by 9,900% in five years.
	(a) Falsely representing that Elegance was conducting an offering pursuant to a valid Reg A exemption;
	(b) Misrepresenting that $530,000 of investor funds and 8.9 million shares of Elegance stock were provided to Individual 1 in exchange for “marketing” and “consulting services,” and omitting that they were provided in exchange for the promotion;
	(c) Failing to disclose that Elegance used more than $80,000 in investor funds to entertain Mikula and his associates in exchange for the promotion; and
	(d) Failing to include in its related party disclosures a share purchase agreement between Elegance and an entity owned by Beri and a payment of $1.7 million to Beri in December 2019 in connection with that agreement.
	(a) Represented Palm Beach to be an “independent” third party;
	(b) Directly provided Mikula with false information that was used in the Palm Beach Venture articles; and
	(c) Circulated the article containing the falsities to investors, and directed its call center to use the article containing false information with prospective investors.
	C. The Emerald Health Promotion
	D. The Hightimes and Cloudastructure Promotions