SEC v. Minerco, Inc.; Bobby Shumake Japhia (f/k/a Robert Samuel Shumake, Jr.); and Julius Makiri Jenge, No. 1:24-cv-02870, District of Columbia (Oct. 9, 2024) — Complaint

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISRICT OF COLUMBIA

SECURITIES AND EXCHANGE
COMMISSION,
100 F Street, NE,
Washington, DC 20549

Plaintiff,

v.
MINERCO, INC., BOBBY SHUMAKE
JAPHIA, and JULIUS MAKIRI JENGE,
Defendants.

Case No. 1:24-cv-2870

JURY TRIAL DEMANDED

COMPLAINT
Plaintiff Securities and Exchange Commission (“Commission”) alleges:
SUMMARY
1. The Commission brings this action against Minerco, Inc. (formerly trading on the
OTC Pink market under the symbol “MINE”) (“Minerco”), Bobby Shumake Japhia f/k/a Robert
Samuel Shumake, Jr. (“Shumake”), and Julius Makiri Jenge (“Jenge”) (collectively
“Defendants”), for their roles in a pump-and-dump scheme that defrauded investors of
approximately $8 million dollars.  Defendants benefitted from their fraud through an entity
Shumake controlled that received millions in ill-gotten proceeds from Minerco stock sales,
which it distributed in part to Shumake and Jenge.  The scheme ran from October 2019 through
May 2021 (the “Relevant Period”).
2. The scheme had three essential parts.  First, Shumake used personal friends as
nominal actors, or “nominees,” to gain secret control of a large stock position in Minerco, an

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inactive company whose stock traded at a low price on the OTC Pink Market.  He used these
nominees, a then-friend (“Person A”) and a shell company called Jameson Holdings LLC
(“Jameson”), to obtain a note convertible into Minerco stock.  Through these nominees,
Shumake had the note converted into one billion newly issued shares of Minerco stock, which
constituted approximately ten percent of the company’s then-reported shares outstanding.
Shumake then arranged for Person A and Jameson to transfer the shares to an offshore company,
Company A.  Shumake also arranged for a third nominee, Jenge, to assume control of Minerco
using a shell company, CBD Acquisitions, LLC,  which Jenge formed for that purpose.
3. Second, having acquired a large position in Minerco and control over the
company, Defendants “pumped” Minerco’s stock price by attracting public attention around its
allegedly becoming the “first publicly traded company focused on the research, production and
distribution of psilocybin mushrooms.”  They accomplished this in part by issuing public
statements containing false and misleading information.  For example, Shumake and Minerco
issued press releases stating that Minerco had partnered with a Jamaican company that would
lend expertise in growing a unique strain of psilocybin and bequeath to Minerco its Jamaican
cannabis licenses, and had been valued at $1 billion by an independent third party.  Minerco and
Jenge also made false public disclosures, including claiming that Minerco was an active Nevada
company when its charter had been revoked.  Minerco also told investors that it was poised to
form a relationship with the University of Michigan to research psilocybin, something of which
the University had no knowledge.
4. Defendants also schemed to promote Minerco to the investing public by making
numerous announcements suggesting that Minerco was a vibrant, growing business.  For

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example, Minerco proclaimed a celebrity endorsement and announced that it would sponsor a
concert that could sell one million tickets.
5. Finally, Shumake engaged Company A to “dump” the Minerco shares into the
market that Defendants had “pumped” through their promotional and false statements.
Ultimately, Company A transferred at least $3.4 million of the proceeds back to an entity
Shumake controlled, Shubox LLC (“Shubox”).  Shubox used these funds to pay Shumake and
Jenge, and to defray the costs of the scheme.
JURISDICTION AND VENUE
6. The Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and
22(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)]
and Sections 21(d), 21(e), and 27(a) of the Securities Exchange Act of 1934 (“Exchange Act”)
[15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
7. Defendants have, directly or indirectly, made use of the means or
instrumentalities of interstate commerce and of the mails in connection with the acts, practices,
and courses of business alleged in this complaint.
8. Venue is proper in this district pursuant to 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] because certain of
the acts, practices, and courses of conduct constituting violations of the federal securities laws
occurred within this district.  Investors residing in this district purchased Minerco stock at
inflated prices and sold them at a loss due to the manipulation of Minerco’s stock price.
THE DEFENDANTS
9. Minerco, Inc. was a Nevada corporation.  On September 20, 2023, its registered
agent resigned and has not been replaced.  Its charter in Nevada has been revoked, and its last

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annual report with the state was due June 30, 2022, but has not been filed.   Minerco does not
currently have a class of shares registered with the Commission, but it did have a class of
securities registered under Exchange Act Section 12(g) until July 6, 2017, when it filed a Form
15 to terminate its registration.  Minerco’s common stock was quoted and traded over the counter
in the U.S., on the OTC Markets Group Pink Open Market, under the symbol MINE.  On May
26, 2021, the Commission issued an Order of Suspension of Trading pursuant to Section 12(k) of
the Exchange Act in the securities of Minerco, Inc. for a period of ten days commencing on May
27, 2021, citing, among other things, “questions and concerns regarding the adequacy and
accuracy of information about the Company in the marketplace.”  SEC Release No. 92027 (May
26, 2021).  Following the suspension, Minerco stock resumed trading on the OTC Expert Market
until July 22, 2024, when its symbol was deleted following the suspension of the stock’s
Committee on Uniform Security Identification Procedures (“CUSIP”) number.
10. Bobby Shumake Japhia, f/k/a Robert Samuel Shumake, Jr., age 56, is a
resident of Dallas, Texas and Michigan.  In December 2017, Shumake pled guilty to two
misdemeanor violations of the Michigan Credit Services Protection Act.  See People v. Shumake,
No. 2017-261752-FH (Mich. 46th Jud. Dist. Feb. 15, 2017).  On September 20, 2021, the
Commission filed a complaint against Shumake for securities fraud, which is presently in
litigation.  See SEC v. Shumake, No. 2:21-cv-12193 (E.D. Mich.).  On April 10, 2023, Shumake
changed his legal name to Bobby Shumake Japhia.  On February 7, 2024, Shumake filed for
bankruptcy.  See In re Bobby Japhia, No. 9:24-bk-10129 (Bankr. C.D. Cal.).
11. Julius Makiri Jenge, age 54, currently resides in Maryland.  On November 30,
2021, the SEC filed a subpoena enforcement action against Jenge.  See SEC v. Jenge, No. 1:21-
mc-149 (TSC) (D.D.C.).  On August 12, 2024, the court ordered Jenge to comply with the

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subpoena.  On August 23, 2024, Jenge was arrested as he prepared to depart on a flight to
Tanzania.  In a criminal complaint unsealed that day, Jenge was charged with criminal securities
fraud in violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  See United
States v. Jenge, No. 1:24-mj-00267 (MAU) (D.D.C.).  On September 8, 2024, Jenge asserted his
Fifth Amendment privilege against self-incrimination in response to the SEC subpoena for his
testimony, and the SEC dismissed the subpoena enforcement action.
OTHER RELEVANT ENTITIES
12. Shubox LLC is a Michigan limited liability company.  Shumake is its sole
member.  Shubox owned three bank accounts and a crypto asset account that received Minerco
stock sale proceeds.  Shumake was an authorized signer on each account.
13. Company A is a limited liability company organized under the laws of the
government of Dubai, United Arab Emirates, on March 1, 2020, with a principal place of
business in Dubai.  Company A’s formation documents do not list stock trading, speculation, or
investment among its corporate purposes; instead, the company’s listed purposes include
electronic and computer repair businesses such as “Cookers & Cookstove Trading,”
“Refrigerators, Washing Machines & Household Electrical Appliances [Trading],” “Watches &
Clocks & Spare Parts Trading,” and “Photographic Equipment & Accessories Trading.”
Company A’s corporate charter states specifically that it “may not engage in . . . investment of
funds for the account of others.”
14. Jameson Holdings LLC (“Jameson”) was, during the Relevant Period, a Virginia
limited liability company formed on March 23, 2020, listing Person A as its manager and Jenge
as its registered agent.

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15. CBD Acquisitions, LLC (“CBD Acquisitions”) is a Georgia limited liability
company organized on October 31, 2019, by “Julius Makari,”  who, upon information and belief,
was Defendant Jenge.   In late October 2019, Minerco acquired a company called “CBD
Securities Acquisition LLC” (emphasis added) for 2,000,000 preferred Class A shares of
Minerco.  Through this transaction, CBD Securities Acquisition LLC assumed a control position
in Minerco, and Jenge became Minerco’s CEO.  When the transaction took place, CBD
Securities Acquisition LLC did not exist.  Afterwards, Jenge formed “CBD Acquisitions” as a
Georgia company, dropping “Securities” from the company name.
BACKGROUND
“Pump-and-Dump” Schemes Generally

16. “Pump-and-dump” schemes typically target a company that has negligible assets,
revenue, or current operations, but whose stock trades on a public market.  As a first step in the
fraud, the perpetrators surreptitiously obtain control over a substantial portion of the shares of the
company’s stock.  If the targeted company is inactive at the time and its stock is thinly traded
and offered at a very low price, then the perpetrators may cheaply obtain a large position in the
stock.  After obtaining the publicly traded shares, the perpetrators “pump up” the stock price,
typically by disseminating press releases or other information touting the company’s financial
condition or prospects.  That false appearance of economic activity and success encourages
others to purchase the stock, which increases its price and volume.  Finally, the perpetrators
“dump” their shares, meaning they sell to unsuspecting investors the shares that they own and
control.  The dumping often occurs concurrent with or soon after the dissemination of
promotional materials touting the company.  The perpetrators of a pump-and-dump scheme often

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deposit or transfer their shares into different accounts, including nominees’ accounts, to conceal
the fact that they are both promoting and selling the stock.
Defendants’ Roles in the Scheme

17. Jenge was the public face of Minerco.  He was Minerco’s CEO and sole director.
During the Relevant Period, Jenge uploaded and signed Minerco’s Disclosure Statements
Pursuant to the Pink Basic Disclosure Guidelines (“OTC Markets Disclosure Statements”)
identifying himself as Minerco’s CEO, CFO, and Principal Financial Officer.  Minerco’s press
releases purported to quote Jenge, and he conducted shareholder meetings.  Jenge was aware that
he was publicly held out as Minerco’s CEO and quoted in its press releases, and he allowed
Shumake to act and make statements in Jenge’s name on Minerco’s behalf.
18. While Jenge was the public face of Minerco, Shumake acted behind the scenes as
Minerco’s de facto control person.  Shumake handled communications with third parties
including Minerco’s public relations consultant, its potential joint venture partners, and its
lawyer.  Shumake drafted press releases and even drafted Jenge’s quotes.   He also funded
various Minerco operations, using his credit card to pay for Minerco’s website domain
(www.minercoinc.com) and to issue many of its press releases.  Shubox, an entity that Shumake
controlled, made payments for Minerco to Minerco’s transfer agent, OTC Markets, and
Minerco’s investor relations firm.  Shumake’s phone number was the listed contact for
Minerco’s Twitter (now X) account, and Shumake was the listed contact for Minerco’s website
domain.
19. Although Minerco’s press releases, public statements, and investor calls did not
identify Shumake, he posted about the company anonymously on an investor message board
using the handle “Burntcheeze,” using the forum to draw attention to Minerco’s stock.

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FACTS
Part One:  Acquiring the Shares

20. During the Relevant Period, Minerco, as a microcap issuer, traded publicly on the
OTC Pink market under the symbol “MINE.”  On October 30, 2019 – just as Defendants’
scheme was beginning – Minerco’s closing stock price was $0.000001.  Minerco’s business was
in tatters:  its October 31, 2019, quarterly report noted a “Going Concern” warning, and showed
an accumulated deficit of more than $37 million and a net loss of more than $100,000.  Indeed,
Minerco was not even legally authorized to operate, as it had failed to file its annual report with
Nevada, its state of incorporation, which had been due on June 30, 2019.
A.  Shumake Gains Control of a Sizeable Position in Minerco Stock
21. In the fall of 2019, Shumake initiated a scheme to gain control over one billion
shares of Minerco stock while using nominee individuals and corporations to mask his
involvement.
22. In approximately October 2019, Shumake presented his then-friend, Person A,
with ownership of a company called Jameson – although, at the time, Jameson was a fictitious
entity that had not been legally formed.
23. Also in October 2019, one of Minerco’s creditors assigned to Jameson a $50,000
interest in a Convertible Promissory Note that the creditor held.  Critically, the Note was
convertible into Minerco stock.
24. Following Shumake’s instructions, Person A accepted the assignment on behalf of
Jameson.

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B. CBD Acquisitions and Jenge Assume Control of Minerco
25. In October and November 2019, Jenge assumed control of Minerco and became
its CEO.  The change in control took place as follows.
26. On October 30, 2019, Minerco caused 2,000,000 restricted Class A Preferred
shares of Minerco stock to be issued to CBD Securities Acquisition, pursuant to a Purchase and
Sale Agreement through which Minerco acquired CBD Securities Acquisition in return for
issuing to it stock that carried an outsized share of votes.  Minerco’s then-CEO requested the
issuance and copied Shumake on his request.  At the time of this transaction, CBD Securities
Acquisition did not exist.  The next day, Jenge, using the name “Julius Makiri,” organized CBD
Acquisitions, LLC as a Georgia corporation, dropping “Securities” from the company name.
27. On November 12, 2019, Minerco updated its website, listing CBD Acquisitions as
the registrant for the company’s domain (www.minercoinc.com).
28. Six weeks later, on January 7, 2020, in a board of directors resolution signed by
Jenge, Minerco acknowledged the Note assignment to Jameson and agreed to Jameson’s
conversion of its $50,000 interest into one billion shares of Minerco stock.  That same day, Jenge
signed a letter as Minerco’s CEO directing the company’s transfer agent to issue one billion
shares of stock to Jameson.
29. On February 26, 2020, Minerco issued one billion free-trading shares of its
common stock to Jameson.  Jameson, however, still did not legally exist at the time.  The
issuance of new common stock had a dilutive effect on Minerco’s existing equity holders.
30. Not until March 23, 2020, did Defendants form Jameson as a Virginia limited
liability company, listing Jenge as its registered agent and Person A as the sole member.  Person

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A was designated the sole member because Shumake did not want Jenge to be identified as the
principal of both Minerco and Jameson.
D. Shumake Arranges for Jameson to Transfer its Minerco Shares to Company
A, an Offshore Firm that Would Sell Them for a Fee

31. In September 2020, Shumake instructed Person A to sign an agreement in which
Jameson would transfer its Minerco shares to Company A, a company of which Person A had
never heard.
32. Person A complied.  On September 16, 2020, Person A electronically signed a
Stock Purchase Agreement with Company A, whereby Jameson sold its shares of unrestricted
Minerco stock to Company A.  The agreement specified:  “  The purchase price of the Stock shall
be Thirty (30%) of the Net Sale Proceeds upon successful clearing of the shares.”  In economic
substance, the agreement meant that, in the upcoming “dump” into the market, Company A
would distribute the shares into the market for a 30% fee.  On November 18, 2020, the transfer
agent reissued the Minerco shares to Company A.
33. On information and belief, after Jameson sold the Minerco stock to Company A,
Shumake controlled and directed Company A’s sales of the stock and received a portion of the
sales proceeds through Shubox accounts.

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Part Two:  The First Pump

A. Defendants Set the Stage for the Pump During Their Minerco Takeover

34. On November 20, 2019, amidst Defendants’ maneuvering to give Shumake and
his nominees control of Minerco, Shumake posted a link and remarked “Look what I found” on
the Minerco InvestorsHub message board, using the anonymous handle “Burntcheeze.”  By
highlighting Minerco’s website following CBD Acquisitions’ takeover, and doing so on an
investor forum dedicated to Minerco’s stock as an investment prospect, Shumake shepherded
investors to the website and began setting the stage for the upcoming pump.
35. Similarly, on January 16, 2020, Minerco announced that a “specialized
investment firm” had acquired Minerco.  Jenge approved the press release on Minerco’s behalf.
The press release identified the acquiror as a “psilocybin research and investment firm,” and
stated:  “The Company plans to immediately enter into the psilocybin ‘Magic Mushrooms’
market, targeting the multibillion-dollar space in the research and development of potential
FLOW OF STOCK AND PROCEEDS
2
Robert
Shumake
Jameson Holdings
LLC/ Person A
ARFS Trading
LLC
ARFS
deposits the
shares at
Bahamian
Bank for sale
Bank
(Bahamas)
Fintech
(Canada)
ShuboxLLC
ShumakeNominees get
ConvertibleNote: 1 Billion
Shares ofMinercoStock
Defendants
PromoteMinerco
stock
$8.4 million of
Shares Sold
$7.03 million
$3.4 million
$7.04 million
Stock
Acquisition
Stock
Proceeds
Stock Pumps
& Dumps
Jameson converts shares
And sells to ARFS

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psychiatric medicines, while relocating the Company's headquarters to Jamaica.”  Again, to
attract investors’ attention, Shumake posted a link to the press release on the InvestorsHub
Minerco message board using his “Burntcheeze” handle.  The press release was false:  CBD
Acquisitions, the only company to which the press release conceivably could have referred, was
a recently formed shell company with no specialized investment experience.
B. Defendants Promote Minerco with Statements that Create the False
Appearance of Economic Success and Vitality

36. Once Defendants had acquired control over the Minerco shares through Jameson,
transferred those shares to Company A for future sale, installed Jenge as CEO of Minerco, and
laid the groundwork for the pump, Defendants embarked on a media campaign to promote
Minerco and increase its stock price.
37. The first step was to make Minerco look like a real company.  In an effort to
project economic activity and growth, in the fall of 2019, Shumake retained on Minerco’s behalf
an advertising company to produce two articles, a social media campaign, a text message
campaign, and email distributions.  Shumake’s company Shubox later sent a payment for those
services.
38. Similarly, in approximately December 2019, Minerco hired a public relations firm
(the “PR Firm”).  Shumake again was involved:  He introduced the PR Firm’s principal to the
advertising firm to discuss Minerco.  On behalf of Minerco, the PR Firm’s principal hired a
Canadian newswire service, which Minerco used to publish some of its press releases starting in
2020.
39. Eventually, more than a year later on March 3, 2021, Minerco publicly announced
that it had retained the PR Firm, but the announcement disguised the fact that its principal had a
prior criminal conviction and SEC judgment against him:  Instead of using the PR Firm

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principal’s real name, it used the alias “Bill Miller.”  Shumake used his credit card to pay for the
publication of the press release.  From March 1 to April 6, 2021, Shumake’s company, Shubox,
paid approximately $23,000 to the PR Firm through an affiliate.
40. Defendants also made a series of false and misleading public statements,
including press releases and disclosures, to boost Minerco’s stock price.  From December 2020
through May 2021, Minerco issued approximately 20 press releases, or roughly one per week, at
least half of which Shumake funded using his credit card.  Minerco also posted frequently on its
website and Twitter (now X) account, and hosted multiple investor Zoom calls.  The volume of
public statements, and, in some cases, their false and materially misleading content, created the
false impression that Minerco was a vibrant and growing company that was successfully
implementing its business plan.
1. False and Misleading Statements About a Joint Venture
41. In or around November 2020, Shumake sought advice from a Jamaican business-
owner about how to develop operations in Jamaica.  This discussion resulted in a joint venture
between the companies memorialized in a letter of intent (“LOI”) dated December 20, 2020.
The LOI established that the parties intended to enter into negotiations for the Jamaican company
to contribute to a collaborative project its provisional cannabis licenses and land for growing
cannabis and mushrooms, in return for a strategic and financial contribution from Minerco.
42. Almost immediately – and contrary to the express wishes of the Jamaican
company – Minerco began making false statements about the new joint venture.  On or about
January 3, 2021, Shumake told the Jamaican company that Minerco was going to issue a press
release about the LOI, but the Jamaican company’s representative told Shumake not to do so
until he could review it.

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43. Shumake and Minerco ignored their joint venture partner’s plea.  On January 4,
2021, Minerco issued a press release – paid for using Shumake’s credit card – announcing a joint
venture to grow, process, and extract psilocybin and cannabis for export to Canada and Europe.
It falsely stated that the Jamaican company would “serve as psilocybin experts to grow and
develop a unique strain of mushrooms specific to Jamaica,” and that Minerco would “inherit”
from the Jamaican company “multiple cannabis licenses to grow, process, extract cannabis.”
Neither was true:  The Jamaican company had not agreed to provide psilocybin expertise or to
transfer its cannabis licenses to Minerco as part of the joint venture.  Indeed, the companies’ LOI
did not mention those things.
44. The false statements had their intended effect.  On the day of the press release,
Minerco’s stock price rose more than 15 percent and its volume increased by more than 100
percent.
45. Shortly following the press release, a representative of the Jamaican company
asked Shumake to retract it, but Shumake said that he could not do so.
46. The embryonic joint venture did not survive Defendants’ false statements.  On
February 20, 2021, the Jamaican company gave Minerco formal written notice immediately
terminating the LOI.  Minerco acknowledged the joint venture’s cancellation on a March 28,
2021, shareholder call, promising to update its website accordingly, but it failed to do so for
weeks.  As late as May 2021, Minerco’s website falsely claimed an existing partnership with the
Jamaican company to grow cannabis and psilocybin and produce 1 million microdose psilocybin
tablets per day.

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2.  False and Misleading Statements About an Alleged Third-Party
Valuation
47. Minerco also made misleading statements suggesting that an independent “third
party” had analyzed Minerco and valued it at $1 billion.  In fact, however, the valuation was
merely Shumake’s own assessment.
48. In a press release dated December 28, 2020, Minerco announced that it had
“hired” an online valuation tool (the “OVT”), to create a business valuation.  The press release
stressed the third-party nature of the valuation, quoting Jenge as saying:  “  It is significant to have
a third party evaluate our business strategy to determine if we are on the right track for our
shareholders.  This valuation will give definitive confidence as to the financial strength and
viability of the psilocybin industry.”
49. Minerco and Shumake underscored the purportedly independent nature of the
OVT’s process by announcing an anticipated timeline for the OVT’s efforts.  Minerco’s press
release explained that it “anticipate[d] the pre-money valuation and financial projections within
14 business days.”  Shumake also discussed the OVT valuation process in posts on the
InvestorsHub message board under his “Burntcheeze” alias, echoing the press release’s statement
that the “valuation report will be within 14 days.”  On January 4, 2021, again posting as
Burntcheeze, Shumake expressed his supposed continuing curiosity about the forthcoming
results, ruminating:  “I’m waiting on the valuation. What could that look like.”
50. In reality, an OVT valuation is not an independent or third-party appraisal, and its
results are nearly instantaneous – it is essentially a calculator, prompting the user to input data
including historical revenues, projected revenues, and balance sheet figures in response to 37
questions, and then using embedded formulas to generate a business valuation in seconds.

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51. Given the OVT’s nature, Minerco’s and Shumake’s statements that Minerco had
“hired” the OVT to conduct a “third party” valuation company over “14 days” were a charade.
Minerco hired the OVT to create a valuation only in the sense that a company hires Microsoft
Excel to create a spreadsheet.  Shumake created the OVT account online on December 28, 2020,
the day of Minerco’s press release, and because he had immediate access to the software, he
could have generated a result almost immediately.  Instead, to build anticipation while
maintaining the illusion that there was an independent company with expert employees
conducting a thorough analysis, Shumake waited 14 days to use the software to generate the
valuation.  At no time was Shumake “waiting on the valuation”; he could have generated it
whenever he chose.
52. Nor was there any mystery to Shumake about “[w]hat that [result] could look
like.”  His ability to manipulate the OVT’s inputs meant that he could essentially achieve
whatever output valuation he desired.  Indeed, when Shumake finally used the OVT software to
generate a report on January 14, 2021, he did so twice, using different inputs.
53. Shumake’s involvement in the valuation is clear.  Although the version of the
report published online redacted Shumake’s name from visibility, the report’s cover page
identified him as the contact person.
54. Having self-generated a $1 billion valuation, on January 14, 2021, Minerco
misleadingly posted on Twitter the message “Finally our [OVT] valuation is done,” and included
a graphic showing Minerco with a valuation over $1 billion.  Minerco posted a nearly identical
Tweet on January 15, 2021, stating:  “Finally received our Valuation Report from [the OVT]
Software. 14 Days later.”  The tweets continued the misleading implication that Minerco had

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waited 14 days to receive the OVT report when in fact it was generated instantly when Shumake
chose.
55. The OVT valuation charade paid dividends:  Minerco’s stock price increased by
approximately 18%, from at $0.0014 at the close on January 14, 2021, to $0.00165 on January
15, 2021.
56. On the next trading day, January 19, 2021, Minerco repeated the false and
misleading statements, issuing a press release and a Tweet claiming it had received a $1 billion
valuation from OVT.   In it, a quote attributed to Jenge stated:  “  This valuation will give
definitive confidence as to the strength and viability of the psilocybin industry.  In addition, it
gives confirmation that we are in the right industry with the right business at the right time.”
Shumake paid for Minerco to publish the January 19 press release using his credit card.
57. The valuation misstatements continued to pay:  Minerco’s stock price closed up
approximately 9%, from to $0.00165 on January 15 to $0.0018 on January 19, and the next day
(January 20) it increased approximately 17%, to $0.0021, with an intraday high of $0.0025.
3.  False and Misleading Statements in OTC Markets Filings
58. Defendants also made material misstatements in Minerco’s public disclosures.
On or about January 7, February 1, March 11, and May 25, 2021, Minerco posted public
financial disclosures (“Disclosure Statements”) on the OTC Markets website pursuant to the
OTC Pink Basic Disclosure Guidelines (“OTC Guidelines”).  Jenge signed each of the
Disclosure Statements as Minerco’s CEO, CFO, and Principal Financial Officer, and he
uploaded each from his personal Gmail account.  The Disclosure Statements were false and
misleading as described below.

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59. First, the Disclosure Statements disclosed only Jenge as an officer, director, or
control person of Minerco – they did not disclose Shumake’s involvement or role.  The failure to
state Shumake’s involvement violated the OTC Guidelines with respect to at least the second two
Disclosure Statements.  On March 1, 2021, OTC Markets updated the OTC Guidelines to make
clear that the Disclosure Statements should identify as “Company Insiders” “any officer, and any
director of the company, or any person that performs a similar function, regardless of the number
of shares they own” – a capacious definition easily encompassing Shumake.  Jenge signed and
uploaded the March 11 and May 25 Disclosure Statements, but each failed to list Shumake
despite his controlling Minerco’s operations at least to the extent that any officer or director
typically would.
60. The motive for omitting Shumake was clear:  He had a relevant criminal history.
The OTC Guidelines called for disclosure of the “Legal/Disciplinary History” of “Company
Insiders,” including “whether any of the persons or entities listed above have, in the past 10
years, been the subject of:  A conviction in a criminal proceeding . . . (excluding traffic
violations and other minor offenses).”  Shumake had misdemeanor criminal convictions, but by
entirely withholding Shumake’s name as a “Corporate Insider,” Jenge and Minerco evaded the
requirement to disclose them.
61. Additionally, Minerco’s 2021 Disclosure Statements falsely stated that it was an
“[a]ctive” Nevada corporation.  To the contrary, the Nevada Secretary of State had revoked
Minerco’s corporate charter the previous summer (on July 1, 2020) for failing to pay fees and
file its annual report.  Under Nevada law, the revocation terminated Minerco’s right to transact
business and required it to be treated as insolvent, with its assets held in trust by the company’s
directors.  Nev. Rev. Stat. § 78.175.  Consequently, Minerco’s reports of an “[a]ctive” status

19

were false, and it had no corporate legal standing to engage in any of the activities and operations
it purportedly carried out, including conducting business, entering into contracts, and pursuing a
joint venture.
D. Minerco’s Scheme Successfully Boosted its Stock Price and Trading Volume
62. As they intended, Defendants’ deceptive scheme and false statements successfully
“pumped” Minerco’s stock price and volume.  On October 1, 2020, Minerco’s stock closed at
$ 0.000001 (1/10,000 of a penny).  By February 10, 2021, however – merely four months later –
Minerco’s stock closed at $0.0127, a remarkable 1,269,900% increase despite its low absolute
price.  Trading volume likewise skyrocketed from approximately 22 million shares on October 1,
2020, to nearly 3 billion shares on February 10, 2021.
Part Three:  The First Sale – Company A Liquidates More Than 600 Million Shares

63. Once Defendants caused Minerco’s stock price and volume to spike through their
deceptive scheme and statements, Company A began selling large quantities of stock.  As
described above, Shumake had instructed Person A to enter into an agreement that transferred
Jameson’s one billion shares of Minerco stock to Company A, and that transfer occurred on
September 16, 2020.  At the time, Minerco’s stock was worth about $0.000075 per share.  On
October 1, 2020, Company A opened an account at an offshore bank in the Bahamas.  By
December 18, 2020, Company A had arranged for the transfer agent to reissue the one billion
shares into the Bahamian bank’s name.  The Bahamian bank held omnibus accounts at U.S.
broker-dealers.
64. On February 10, 2021, after the stock price had spiked, Company A rapidly sold
many of these Minerco shares into the market.  Company A’s representative gave trading
instructions to the Bahamian bank, which sold the stock through its New York brokerage on
Company A’s behalf.  In a single day – February 10, 2021 – Company A sold about 255 million

20

shares for gross proceeds of about $2.95 million.  Between February 10 and February 17,
Company A sold more than 600 million shares of Minerco stock (approximately 9% of its total
trading volume) for proceeds of approximately $7 million.
Part Four:  The Second Pump

65. Heavy selling tends to drive down the price of a stock, but a pause in selling and a
series of positive statements and promotional efforts sometimes can stabilize the stock price and
lead to greater ultimate gains from future sales.  In that vein, during a pause in Company A’s
sales of Minerco stock, Defendants issued additional public statements including false
statements, all with the intention of further boosting Minerco’s stock price and volume.
A. Minerco Announces Affiliation with a Famous Rapper
66. On February 27, 2021, Minerco issued a press release announcing that it had
named a well-known rapper as an “ambassador” to “raise awareness on the company’s overall
mission to educate the masses on botanical products such as cannabis or psilocybin.”  Shumake
paid to publish this press release with his credit card.
B. Minerco Announces an Imminent or Actual Relationship with University of
Michigan

67. On March 28, 2021, during a Minerco-hosted investor conference call, Minerco’s
representative announced that “we have entered into a relationship, or are about to enter into a
relationship, with the University of Michigan for the testing of magic mushrooms for medicinal
purposes, in particular, depression, insomnia, and other . . . unmet needs that we are currently
studying.”  However, no such relationship existed.
C. Minerco Announces that It Will Sponsor a Massive Concert
68. On April 19 and again on May 13, 2021, Minerco announced that it was
sponsoring a livestreamed concert with ticket sales projected to exceed one million worldwide.

21

69. On April 13, 2021, Jenge signed a contract to produce the concert.  Shubox wired
the $237,500 appearance fee (of contract price of $475,000) from its bank account, for which
Shumake was an authorized signer.  This same bank account received proceeds from Company
A’s sales of Minerco stock, including a wire receipt the previous day for approximately
$500,000.
70. On May 5, 2021, Shubox provided a deposit for a private rental of a concert hall
in Detroit as the venue for the concert, but Defendants had no intention to stage the actual event;
Minerco never signed a rental agreement, nor did it make preparations with the venue to stage
the concert.  Shumake and Shumake’s local agent were the only people who spoke with the
concert hall about the rental.  On May 17, the venue officially canceled the concert and forfeited
Minerco’s deposit.  The live concert never happened.
Part Five:  The Second Sale – Company A Sells 325 Million Additional Shares

71. Between April 20 and May 26, 2021, Company A resumed selling Minerco stock
and sold approximately 325.5 million additional shares for gross proceeds of about $1.3 million.
72. In total, between the first and second phases of selling, Company A sold about
928 million of the one billion shares that it had received for sale pursuant to its contract with
Jameson, for proceeds of about $8.4 million.

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Defendants Circulate the Fraud Proceeds to Shumake
73. Just after the final round of selling, Company A transferred approximately $7
million of the fraud proceeds first to its bank account in the Bahamas, and then to accounts at a
US and Canadian digital assets fintech company,  which converted the funds into crypto assets
including Tether (USDT) and Bitcoin (BTC).  Those accounts then transferred the majority of
the crypto assets to other accounts at the fintech company and two cryptocurrency exchanges.
74. Shumake’s Shubox account at the fintech company received approximately
16.236 BTC and 2.566 million USDT, excluding fees, which accounted for approximately $3.4
million of the Minerco stock sale proceeds.
75. Shubox then transferred approximately $2.7 million of the $3.4 million in ill-
gotten gains to U.S. bank accounts in the name of Shubox LLC.  As explained above, Shumake
is the sole member of Shubox and an authorized signer on each of the company’s bank accounts.

23

76. Shumake used the money in the Shubox accounts to fund personal expenditures
including payments to a car dealership, jewelry stores, grocery stores, and restaurants.  He also
paid approximately $26,000 to Jenge; $23,000 to the PR Firm’s affiliate; $237,500 to the concert
talent agency; and additional amounts to Minerco’s transfer agent, lawyers, accountants, and
others who did work for Minerco.
77. During the Relevant Period, Defendants’ pump-and-dump scheme inflicted
pecuniary harm on investors who traded Minerco shares.  Investors who bought Minerco stock in
reliance on the public announcements that were either misleading or false, or that created a false
appearance of fact, were duped.  They paid a higher price than the shares were worth, and they
suffered losses when they tried to sell their shares.  Moreover, Minerco’s issuance of one billion
additional shares diluted existing stockholders’ equity.
Attempt to Destroy Evidence
78. On October 1, 2021, SEC staff issued a subpoena to Jenge for documents and
testimony in the investigation that gave rise to this action.  That same day, the staff emailed a
copy of the subpoena package to Jenge’s Minerco business email address.  UPS delivered the
subpoena to the garage of Jenge’s then-residence in Norfolk, Virginia on Monday, October 4,
2021, at 9:18 a.m.  The day after the SEC subpoena arrived, Shumake requested that Minerco’s
email service provider remove seven email boxes in the Minerco domain, including the email
boxes for “Robert”; “  miners”; “Julius”; and “ceo.”  These efforts to destroy evidence in the wake
of Jenge’s receiving the subpoena are strong evidence of scienter and consciousness of
wrongdoing.

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COUNT ONE

False Statement or Misleading Omission in the Purchase or Sale of Securities
Violations 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)]
(Against Minerco, Shumake and Jenge)

79. Paragraphs 1 through 78 are realleged and incorporated by reference as though
fully set forth herein.
80. Section 10(b) of the Exchange Act provides that it shall be unlawful for any
person, directly or indirectly, by the use of any means or instrumentality of interstate commerce
or of the mails, or of any facility of any national securities exchange to use or employ, in
connection with the purchase or sale of any security registered on a national securities exchange
or any security not so registered, or any securities-based swap agreement, any manipulative or
deceptive device or contrivance in contravention of such rules and regulations as the
Commission may prescribe as necessary or appropriate in the public interest or for the protection
of investors.
81. Rule 10b-5(b) provides that it shall be unlawful for any person, directly or
indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or
of any facility of any national securities exchange, to make any untrue statement of a material
fact or to omit 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.
82. By reason of the foregoing, including but not limited to Paragraphs 7, 8, 35, 41-
61, 67, 73-78, Shumake, Jenge, and Minerco 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].

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COUNT TWO

Scheme to Defraud in the Purchase or Sale of Securities
Violations of Section 10(b) of the Exchange Act and Rule 10b-5(a) & (c) thereunder
[15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5(a) & (c)]
(Against Minerco, Shumake, and Jenge)

83. Paragraphs 1 through 78 are realleged and incorporated by reference as though
fully set forth herein.
84. Section 10(b) of the Exchange Act provides that it shall be unlawful for any
person, directly or indirectly, by the use of any means or instrumentality of interstate commerce
or of the mails, or of any facility of any national securities exchange to use or employ, in
connection with the purchase or sale of any security registered on a national securities exchange
or any security not so registered, or any securities-based swap agreement, any manipulative or
deceptive device or contrivance in contravention of such rules and regulations as the
Commission may prescribe as necessary or appropriate in the public interest or for the protection
of investors.
85. Rule 10b-5(a) and (c) provide that it shall be unlawful for any person, directly or
indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or
of any facility of any national securities exchange, to employ any device, scheme, or artifice to
defraud (Rule 10b-5(a)), or to engage in any act, practice, or course of business which operates
or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of
any security (Rule 10b-5(c)).
86. By reason of the foregoing, including but not limited to Paragraphs 7, 8, 16-34,
36-40, 62-66, 68-78, Shumake, Jenge, and Minerco, violated, and unless restrained and enjoined

26

will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-
5(a) and (c) [17 C.F.R. §24010b-5(a) and (c)].
COUNT THREE

Obtaining Money or Property by Means of False Statement or Misleading Omission in the
Offer or Sale of Securities
Violations of Section 17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)(2)]
(Against Minerco, Shumake, and Jenge)

87. Paragraphs 1 through 78 are realleged are re-alleged and incorporated by
reference.
88. Section 17(a)(2) of the Securities Act provides that it shall be unlawful for any
person in the offer in the offer and sale of securities, by use of the means or instruments of
transportation or communication in interstate commerce, or of the mails, directly or indirectly to
obtain money or property by means of untrue statements of material fact or by omitting to state
material facts necessary to make the statements made, in light of the circumstances under which
they were made, not misleading.
89. By reason of the foregoing, including but not limited to the allegations in
paragraphs 7, 8, 35, 41-61, 67, 73-78, Defendants Minerco, Shumake, and Jenge violated Section
17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)(2)].
COUNT FOUR

Scheme to Defraud in the Offer or Sale of Securities
Violations of Sections 17(a)(1) and (3) of the Securities Act [15 U.S.C. § 77q(a)(1) & (3)]
(Against Minerco, Shumake, and Jenge)
90. Paragraphs 1 through 78 are re-alleged and incorporated by reference.
91. Section 17(a)(1) and (3) of the Securities Act provides that it shall be unlawful for
any person in the offer in the offer and sale of securities, by use of the means or instruments of
transportation or communication in interstate commerce, or of the mails, directly or indirectly:

27

to employ any device, scheme or artifice to defraud (Section 17(a)(1)), or to engage in
transactions, practices, or courses of business that operated or would operate as a fraud or deceit
upon the purchasers of such securities (Section 17(a)(3)).
92. By reason of the foregoing, including but not limited to the allegations in
paragraphs 7, 8, 16-34, 36-40, 62-66, 68-78, Minerco, Shumake, and Jenge violated Section
17(a)(1) and (3) of the Securities Act [15 U.S.C. §77q(a)(1) and (3)].
93. prevent unjust enrichment, such proceeds should be disgorged.
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court enter a Final
Judgment:
1. Finding that the Defendants committed the securities law violations alleged in this
Complaint;
2. In forms consistent with Rule 65 (d) of the Federal Rules of Civil Procedure,
permanently enjoining the Defendants from violating Sections 17(a) of the Securities Act,
Section 10(b) of the Exchange Act, and Exchange Act Rule 10b-5 [15 U.S.C. § 77q(a), 15 U.S.C.
§ 78j(b), and 17 C.F.R. § 240.10b-5];
3. In forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure,
prohibiting Shumake and Jenge, pursuant to Section 20(g)(1) of the Securities Act [15 U.S.C.
§ 77t(g)(1)] and Section 21(d)(6)(A) of the Exchange Act [15 U.S.C. § 78u(d)(6)(A)], from
participating in any offering of penny stock;
4. In forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure,
prohibiting Shumake and Jenge, pursuant to Section 21(d)(2) of the Exchange Act [ 15
U.S.C.§78u(d)(2)], from serving as an officer or director of any issuer that has a class of

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securities registered pursuant to Section 12 [15 U.S.C. § 78l] of the Exchange Act or that is
required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. §78o(d)];
5. In forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure,
permanently enjoining Shumake and Jenge from directly or indirectly, including, but not limited
to, through any entity owned or controlled by either of them, participating in the issuance,
purchase, offer, or sale of any security, provided, however, that such injunction shall not prevent
either of them from purchasing or selling securities listed on a national securities exchange for
his own personal account;
6. Ordering that Defendants disgorge any and all ill-gotten gains, together with pre-
judgment and post-judgment interest, derived from the securities law violations set forth in this
Complaint pursuant to Section 21(d)(3), (d)(5) and 21(d)(7) of the Exchange Act [15 U.S.C. §§
78u(d)(3), 78u(d)(5) and 78u(d)(7)];
7. Imposing civil monetary penalties against Defendants for each of their securities
law violations, pursuant to 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)]; and
8. Granting such other relief as this Court may deem just or appropriate.
VIII.   JURY DEMAND
 The SEC demands a jury in this matter.

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Dated: October 9, 2024    Respectfully submitted,

       /s/  Damon W. Taaffe
Damon W. Taaffe (D.C. Bar No. 483874)
Trial Counsel
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Tel: (202) 551-7420
[email protected]

1 
 

IN THE UNITED STATES DISTRICT COURT 
FOR THE DISRICT OF COLUMBIA 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

100 F Street, NE,  
Washington, DC 20549 

 
Plaintiff, 

 
v. 

MINERCO, INC., BOBBY SHUMAKE 
JAPHIA, and JULIUS MAKIRI JENGE,  

Defendants. 
 

 

  
 
 
 
 
Case No. 1:24-cv-2870 
 
 
JURY TRIAL DEMANDED 

 
COMPLAINT 

Plaintiff Securities and Exchange Commission (“Commission”) alleges: 

SUMMARY 

1. The Commission brings this action against Minerco, Inc. (formerly trading on the 

OTC Pink market under the symbol “MINE”) (“Minerco”), Bobby Shumake Japhia f/k/a Robert 

Samuel Shumake, Jr. (“Shumake”), and Julius Makiri Jenge (“Jenge”) (collectively 

“Defendants”), for their roles in a pump-and-dump scheme that defrauded investors of 

approximately $8 million dollars.  Defendants benefitted from their fraud through an entity 

Shumake controlled that received millions in ill-gotten proceeds from Minerco stock sales, 

which it distributed in part to Shumake and Jenge.  The scheme ran from October 2019 through 

May 2021 (the “Relevant Period”).   

2. The scheme had three essential parts.  First, Shumake used personal friends as 

nominal actors, or “nominees,” to gain secret control of a large stock position in Minerco, an 

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inactive company whose stock traded at a low price on the OTC Pink Market.  He used these 

nominees, a then-friend (“Person A”) and a shell company called Jameson Holdings LLC 

(“Jameson”), to obtain a note convertible into Minerco stock.  Through these nominees, 

Shumake had the note converted into one billion newly issued shares of Minerco stock, which 

constituted approximately ten percent of the company’s then-reported shares outstanding.  

Shumake then arranged for Person A and Jameson to transfer the shares to an offshore company, 

Company A.  Shumake also arranged for a third nominee, Jenge, to assume control of Minerco 

using a shell company, CBD Acquisitions, LLC, which Jenge formed for that purpose.   

3. Second, having acquired a large position in Minerco and control over the 

company, Defendants “pumped” Minerco’s stock price by attracting public attention around its 

allegedly becoming the “first publicly traded company focused on the research, production and 

distribution of psilocybin mushrooms.”  They accomplished this in part by issuing public 

statements containing false and misleading information.  For example, Shumake and Minerco 

issued press releases stating that Minerco had partnered with a Jamaican company that would 

lend expertise in growing a unique strain of psilocybin and bequeath to Minerco its Jamaican 

cannabis licenses, and had been valued at $1 billion by an independent third party.  Minerco and 

Jenge also made false public disclosures, including claiming that Minerco was an active Nevada 

company when its charter had been revoked.  Minerco also told investors that it was poised to 

form a relationship with the University of Michigan to research psilocybin, something of which 

the University had no knowledge. 

4. Defendants also schemed to promote Minerco to the investing public by making 

numerous announcements suggesting that Minerco was a vibrant, growing business.  For 

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example, Minerco proclaimed a celebrity endorsement and announced that it would sponsor a 

concert that could sell one million tickets.  

5. Finally, Shumake engaged Company A to “dump” the Minerco shares into the 

market that Defendants had “pumped” through their promotional and false statements.  

Ultimately, Company A transferred at least $3.4 million of the proceeds back to an entity 

Shumake controlled, Shubox LLC (“Shubox”).  Shubox used these funds to pay Shumake and 

Jenge, and to defray the costs of the scheme. 

JURISDICTION AND VENUE 

6. The Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and 

22(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] 

and Sections 21(d), 21(e), and 27(a) of the Securities Exchange Act of 1934 (“Exchange Act”) 

[15 U.S.C. §§ 78u(d), 78u(e), and 78aa].  

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

instrumentalities of interstate commerce and of the mails in connection with the acts, practices, 

and courses of business alleged in this complaint.  

8. Venue is proper in this district pursuant to 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] because certain of 

the acts, practices, and courses of conduct constituting violations of the federal securities laws 

occurred within this district.  Investors residing in this district purchased Minerco stock at 

inflated prices and sold them at a loss due to the manipulation of Minerco’s stock price. 

THE DEFENDANTS 

9. Minerco, Inc. was a Nevada corporation.  On September 20, 2023, its registered 

agent resigned and has not been replaced.  Its charter in Nevada has been revoked, and its last 

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annual report with the state was due June 30, 2022, but has not been filed.  Minerco does not 

currently have a class of shares registered with the Commission, but it did have a class of 

securities registered under Exchange Act Section 12(g) until July 6, 2017, when it filed a Form 

15 to terminate its registration.  Minerco’s common stock was quoted and traded over the counter 

in the U.S., on the OTC Markets Group Pink Open Market, under the symbol MINE.  On May 

26, 2021, the Commission issued an Order of Suspension of Trading pursuant to Section 12(k) of 

the Exchange Act in the securities of Minerco, Inc. for a period of ten days commencing on May 

27, 2021, citing, among other things, “questions and concerns regarding the adequacy and 

accuracy of information about the Company in the marketplace.”  SEC Release No. 92027 (May 

26, 2021).  Following the suspension, Minerco stock resumed trading on the OTC Expert Market 

until July 22, 2024, when its symbol was deleted following the suspension of the stock’s 

Committee on Uniform Security Identification Procedures (“CUSIP”) number. 

10. Bobby Shumake Japhia, f/k/a Robert Samuel Shumake, Jr., age 56, is a 

resident of Dallas, Texas and Michigan.  In December 2017, Shumake pled guilty to two 

misdemeanor violations of the Michigan Credit Services Protection Act.  See People v. Shumake, 

No. 2017-261752-FH (Mich. 46th Jud. Dist. Feb. 15, 2017).  On September 20, 2021, the 

Commission filed a complaint against Shumake for securities fraud, which is presently in 

litigation.  See SEC v. Shumake, No. 2:21-cv-12193 (E.D. Mich.).  On April 10, 2023, Shumake 

changed his legal name to Bobby Shumake Japhia.  On February 7, 2024, Shumake filed for 

bankruptcy.  See In re Bobby Japhia, No. 9:24-bk-10129 (Bankr. C.D. Cal.).  

11. Julius Makiri Jenge, age 54, currently resides in Maryland.  On November 30, 

2021, the SEC filed a subpoena enforcement action against Jenge.  See SEC v. Jenge, No. 1:21-

mc-149 (TSC) (D.D.C.).  On August 12, 2024, the court ordered Jenge to comply with the 

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subpoena.  On August 23, 2024, Jenge was arrested as he prepared to depart on a flight to 

Tanzania.  In a criminal complaint unsealed that day, Jenge was charged with criminal securities 

fraud in violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  See United 

States v. Jenge, No. 1:24-mj-00267 (MAU) (D.D.C.).  On September 8, 2024, Jenge asserted his 

Fifth Amendment privilege against self-incrimination in response to the SEC subpoena for his 

testimony, and the SEC dismissed the subpoena enforcement action.   

OTHER RELEVANT ENTITIES 

12. Shubox LLC is a Michigan limited liability company.  Shumake is its sole 

member.  Shubox owned three bank accounts and a crypto asset account that received Minerco 

stock sale proceeds.  Shumake was an authorized signer on each account.  

13. Company A is a limited liability company organized under the laws of the 

government of Dubai, United Arab Emirates, on March 1, 2020, with a principal place of 

business in Dubai.  Company A’s formation documents do not list stock trading, speculation, or 

investment among its corporate purposes; instead, the company’s listed purposes include 

electronic and computer repair businesses such as “Cookers & Cookstove Trading,” 

“Refrigerators, Washing Machines & Household Electrical Appliances [Trading],” “Watches & 

Clocks & Spare Parts Trading,” and “Photographic Equipment & Accessories Trading.”  

Company A’s corporate charter states specifically that it “may not engage in . . . investment of 

funds for the account of others.” 

14. Jameson Holdings LLC (“Jameson”) was, during the Relevant Period, a Virginia 

limited liability company formed on March 23, 2020, listing Person A as its manager and Jenge 

as its registered agent.   

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15. CBD Acquisitions, LLC (“CBD Acquisitions”) is a Georgia limited liability 

company organized on October 31, 2019, by “Julius Makari,” who, upon information and belief, 

was Defendant Jenge.  In late October 2019, Minerco acquired a company called “CBD 

Securities Acquisition LLC” (emphasis added) for 2,000,000 preferred Class A shares of 

Minerco.  Through this transaction, CBD Securities Acquisition LLC assumed a control position 

in Minerco, and Jenge became Minerco’s CEO.  When the transaction took place, CBD 

Securities Acquisition LLC did not exist.  Afterwards, Jenge formed “CBD Acquisitions” as a 

Georgia company, dropping “Securities” from the company name.   

BACKGROUND 

“Pump-and-Dump” Schemes Generally 
 

16. “Pump-and-dump” schemes typically target a company that has negligible assets, 

revenue, or current operations, but whose stock trades on a public market.  As a first step in the 

fraud, the perpetrators surreptitiously obtain control over a substantial portion of the shares of the 

company’s stock.  If the targeted company is inactive at the time and its stock is thinly traded 

and offered at a very low price, then the perpetrators may cheaply obtain a large position in the 

stock.  After obtaining the publicly traded shares, the perpetrators “pump up” the stock price, 

typically by disseminating press releases or other information touting the company’s financial 

condition or prospects.  That false appearance of economic activity and success encourages 

others to purchase the stock, which increases its price and volume.  Finally, the perpetrators 

“dump” their shares, meaning they sell to unsuspecting investors the shares that they own and 

control.  The dumping often occurs concurrent with or soon after the dissemination of 

promotional materials touting the company.  The perpetrators of a pump-and-dump scheme often 

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7 
 

deposit or transfer their shares into different accounts, including nominees’ accounts, to conceal 

the fact that they are both promoting and selling the stock. 

Defendants’ Roles in the Scheme 
 

17. Jenge was the public face of Minerco.  He was Minerco’s CEO and sole director.  

During the Relevant Period, Jenge uploaded and signed Minerco’s Disclosure Statements 

Pursuant to the Pink Basic Disclosure Guidelines (“OTC Markets Disclosure Statements”) 

identifying himself as Minerco’s CEO, CFO, and Principal Financial Officer.  Minerco’s press 

releases purported to quote Jenge, and he conducted shareholder meetings.  Jenge was aware that 

he was publicly held out as Minerco’s CEO and quoted in its press releases, and he allowed 

Shumake to act and make statements in Jenge’s name on Minerco’s behalf.   

18. While Jenge was the public face of Minerco, Shumake acted behind the scenes as 

Minerco’s de facto control person.  Shumake handled communications with third parties 

including Minerco’s public relations consultant, its potential joint venture partners, and its 

lawyer.  Shumake drafted press releases and even drafted Jenge’s quotes.  He also funded 

various Minerco operations, using his credit card to pay for Minerco’s website domain 

(www.minercoinc.com) and to issue many of its press releases.  Shubox, an entity that Shumake 

controlled, made payments for Minerco to Minerco’s transfer agent, OTC Markets, and 

Minerco’s investor relations firm.  Shumake’s phone number was the listed contact for 

Minerco’s Twitter (now X) account, and Shumake was the listed contact for Minerco’s website 

domain.   

19. Although Minerco’s press releases, public statements, and investor calls did not 

identify Shumake, he posted about the company anonymously on an investor message board 

using the handle “Burntcheeze,” using the forum to draw attention to Minerco’s stock.  

Case 1:24-cv-02870   Document 1   Filed 10/09/24   Page 7 of 29



8 
 

FACTS 

Part One:  Acquiring the Shares 
 

20. During the Relevant Period, Minerco, as a microcap issuer, traded publicly on the 

OTC Pink market under the symbol “MINE.”  On October 30, 2019 – just as Defendants’ 

scheme was beginning – Minerco’s closing stock price was $0.000001.  Minerco’s business was 

in tatters:  its October 31, 2019, quarterly report noted a “Going Concern” warning, and showed 

an accumulated deficit of more than $37 million and a net loss of more than $100,000.  Indeed, 

Minerco was not even legally authorized to operate, as it had failed to file its annual report with 

Nevada, its state of incorporation, which had been due on June 30, 2019.  

A.  Shumake Gains Control of a Sizeable Position in Minerco Stock 

21. In the fall of 2019, Shumake initiated a scheme to gain control over one billion 

shares of Minerco stock while using nominee individuals and corporations to mask his 

involvement. 

22. In approximately October 2019, Shumake presented his then-friend, Person A, 

with ownership of a company called Jameson – although, at the time, Jameson was a fictitious 

entity that had not been legally formed. 

23. Also in October 2019, one of Minerco’s creditors assigned to Jameson a $50,000 

interest in a Convertible Promissory Note that the creditor held.  Critically, the Note was 

convertible into Minerco stock.  

24. Following Shumake’s instructions, Person A accepted the assignment on behalf of 

Jameson. 

  

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9 
 

B. CBD Acquisitions and Jenge Assume Control of Minerco 

25. In October and November 2019, Jenge assumed control of Minerco and became 

its CEO.  The change in control took place as follows. 

26. On October 30, 2019, Minerco caused 2,000,000 restricted Class A Preferred 

shares of Minerco stock to be issued to CBD Securities Acquisition, pursuant to a Purchase and 

Sale Agreement through which Minerco acquired CBD Securities Acquisition in return for 

issuing to it stock that carried an outsized share of votes.  Minerco’s then-CEO requested the 

issuance and copied Shumake on his request.  At the time of this transaction, CBD Securities 

Acquisition did not exist.  The next day, Jenge, using the name “Julius Makiri,” organized CBD 

Acquisitions, LLC as a Georgia corporation, dropping “Securities” from the company name.  

27. On November 12, 2019, Minerco updated its website, listing CBD Acquisitions as 

the registrant for the company’s domain (www.minercoinc.com).  

28. Six weeks later, on January 7, 2020, in a board of directors resolution signed by 

Jenge, Minerco acknowledged the Note assignment to Jameson and agreed to Jameson’s 

conversion of its $50,000 interest into one billion shares of Minerco stock.  That same day, Jenge 

signed a letter as Minerco’s CEO directing the company’s transfer agent to issue one billion 

shares of stock to Jameson.   

29. On February 26, 2020, Minerco issued one billion free-trading shares of its 

common stock to Jameson.  Jameson, however, still did not legally exist at the time.  The 

issuance of new common stock had a dilutive effect on Minerco’s existing equity holders. 

30. Not until March 23, 2020, did Defendants form Jameson as a Virginia limited 

liability company, listing Jenge as its registered agent and Person A as the sole member.  Person 

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10 
 

A was designated the sole member because Shumake did not want Jenge to be identified as the 

principal of both Minerco and Jameson.   

D. Shumake Arranges for Jameson to Transfer its Minerco Shares to Company 
A, an Offshore Firm that Would Sell Them for a Fee 

 
31. In September 2020, Shumake instructed Person A to sign an agreement in which 

Jameson would transfer its Minerco shares to Company A, a company of which Person A had 

never heard. 

32. Person A complied.  On September 16, 2020, Person A electronically signed a 

Stock Purchase Agreement with Company A, whereby Jameson sold its shares of unrestricted 

Minerco stock to Company A.  The agreement specified:  “The purchase price of the Stock shall 

be Thirty (30%) of the Net Sale Proceeds upon successful clearing of the shares.”  In economic 

substance, the agreement meant that, in the upcoming “dump” into the market, Company A 

would distribute the shares into the market for a 30% fee.  On November 18, 2020, the transfer 

agent reissued the Minerco shares to Company A.  

33. On information and belief, after Jameson sold the Minerco stock to Company A, 

Shumake controlled and directed Company A’s sales of the stock and received a portion of the 

sales proceeds through Shubox accounts.  

  

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11 
 

 

Part Two:  The First Pump 
 

A. Defendants Set the Stage for the Pump During Their Minerco Takeover 
 

34. On November 20, 2019, amidst Defendants’ maneuvering to give Shumake and 

his nominees control of Minerco, Shumake posted a link and remarked “Look what I found” on 

the Minerco InvestorsHub message board, using the anonymous handle “Burntcheeze.”  By 

highlighting Minerco’s website following CBD Acquisitions’ takeover, and doing so on an 

investor forum dedicated to Minerco’s stock as an investment prospect, Shumake shepherded 

investors to the website and began setting the stage for the upcoming pump. 

35. Similarly, on January 16, 2020, Minerco announced that a “specialized 

investment firm” had acquired Minerco.  Jenge approved the press release on Minerco’s behalf.  

The press release identified the acquiror as a “psilocybin research and investment firm,” and 

stated:  “The Company plans to immediately enter into the psilocybin ‘Magic Mushrooms’ 

market, targeting the multibillion-dollar space in the research and development of potential 

FLOW OF STOCK AND PROCEEDS

2

Robert
Shumake Jameson Holdings

LLC/ Person A

ARFS Trading
LLC

ARFS
deposits the

shares at
Bahamian

Bank for sale

Bank
(Bahamas)

Fintech
(Canada)

Shubox LLC

Shumake Nominees get
Convertible Note: 1 Billion
Shares of Minerco Stock

Defendants
Promote Minerco
stock

$8.4 million of
Shares Sold

$7.03 million

$3.4 million

$7.04 million

Stock
Acquisition

Stock
Proceeds

Stock Pumps & Dumps

Jameson converts shares
And sells to ARFS

Case 1:24-cv-02870   Document 1   Filed 10/09/24   Page 11 of 29



12 
 

psychiatric medicines, while relocating the Company's headquarters to Jamaica.”  Again, to 

attract investors’ attention, Shumake posted a link to the press release on the InvestorsHub 

Minerco message board using his “Burntcheeze” handle.  The press release was false:  CBD 

Acquisitions, the only company to which the press release conceivably could have referred, was 

a recently formed shell company with no specialized investment experience. 

B. Defendants Promote Minerco with Statements that Create the False 
Appearance of Economic Success and Vitality 

 
36. Once Defendants had acquired control over the Minerco shares through Jameson, 

transferred those shares to Company A for future sale, installed Jenge as CEO of Minerco, and 

laid the groundwork for the pump, Defendants embarked on a media campaign to promote 

Minerco and increase its stock price.   

37. The first step was to make Minerco look like a real company.  In an effort to 

project economic activity and growth, in the fall of 2019, Shumake retained on Minerco’s behalf 

an advertising company to produce two articles, a social media campaign, a text message 

campaign, and email distributions.  Shumake’s company Shubox later sent a payment for those 

services.  

38. Similarly, in approximately December 2019, Minerco hired a public relations firm 

(the “PR Firm”).  Shumake again was involved:  He introduced the PR Firm’s principal to the 

advertising firm to discuss Minerco.  On behalf of Minerco, the PR Firm’s principal hired a 

Canadian newswire service, which Minerco used to publish some of its press releases starting in 

2020.   

39. Eventually, more than a year later on March 3, 2021, Minerco publicly announced 

that it had retained the PR Firm, but the announcement disguised the fact that its principal had a 

prior criminal conviction and SEC judgment against him:  Instead of using the PR Firm 

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13 
 

principal’s real name, it used the alias “Bill Miller.”  Shumake used his credit card to pay for the 

publication of the press release.  From March 1 to April 6, 2021, Shumake’s company, Shubox, 

paid approximately $23,000 to the PR Firm through an affiliate. 

40. Defendants also made a series of false and misleading public statements, 

including press releases and disclosures, to boost Minerco’s stock price.  From December 2020 

through May 2021, Minerco issued approximately 20 press releases, or roughly one per week, at 

least half of which Shumake funded using his credit card.  Minerco also posted frequently on its 

website and Twitter (now X) account, and hosted multiple investor Zoom calls.  The volume of 

public statements, and, in some cases, their false and materially misleading content, created the 

false impression that Minerco was a vibrant and growing company that was successfully 

implementing its business plan. 

1. False and Misleading Statements About a Joint Venture 

41. In or around November 2020, Shumake sought advice from a Jamaican business-

owner about how to develop operations in Jamaica.  This discussion resulted in a joint venture 

between the companies memorialized in a letter of intent (“LOI”) dated December 20, 2020.  

The LOI established that the parties intended to enter into negotiations for the Jamaican company 

to contribute to a collaborative project its provisional cannabis licenses and land for growing 

cannabis and mushrooms, in return for a strategic and financial contribution from Minerco. 

42. Almost immediately – and contrary to the express wishes of the Jamaican 

company – Minerco began making false statements about the new joint venture.  On or about 

January 3, 2021, Shumake told the Jamaican company that Minerco was going to issue a press 

release about the LOI, but the Jamaican company’s representative told Shumake not to do so 

until he could review it.  

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43. Shumake and Minerco ignored their joint venture partner’s plea.  On January 4, 

2021, Minerco issued a press release – paid for using Shumake’s credit card – announcing a joint 

venture to grow, process, and extract psilocybin and cannabis for export to Canada and Europe.  

It falsely stated that the Jamaican company would “serve as psilocybin experts to grow and 

develop a unique strain of mushrooms specific to Jamaica,” and that Minerco would “inherit” 

from the Jamaican company “multiple cannabis licenses to grow, process, extract cannabis.”  

Neither was true:  The Jamaican company had not agreed to provide psilocybin expertise or to 

transfer its cannabis licenses to Minerco as part of the joint venture.  Indeed, the companies’ LOI 

did not mention those things.  

44. The false statements had their intended effect.  On the day of the press release, 

Minerco’s stock price rose more than 15 percent and its volume increased by more than 100 

percent.  

45. Shortly following the press release, a representative of the Jamaican company 

asked Shumake to retract it, but Shumake said that he could not do so. 

46. The embryonic joint venture did not survive Defendants’ false statements.  On 

February 20, 2021, the Jamaican company gave Minerco formal written notice immediately 

terminating the LOI.  Minerco acknowledged the joint venture’s cancellation on a March 28, 

2021, shareholder call, promising to update its website accordingly, but it failed to do so for 

weeks.  As late as May 2021, Minerco’s website falsely claimed an existing partnership with the 

Jamaican company to grow cannabis and psilocybin and produce 1 million microdose psilocybin 

tablets per day.   

  

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2.  False and Misleading Statements About an Alleged Third-Party 
Valuation  

47. Minerco also made misleading statements suggesting that an independent “third 

party” had analyzed Minerco and valued it at $1 billion.  In fact, however, the valuation was 

merely Shumake’s own assessment. 

48. In a press release dated December 28, 2020, Minerco announced that it had 

“hired” an online valuation tool (the “OVT”), to create a business valuation.  The press release 

stressed the third-party nature of the valuation, quoting Jenge as saying:  “It is significant to have 

a third party evaluate our business strategy to determine if we are on the right track for our 

shareholders.  This valuation will give definitive confidence as to the financial strength and 

viability of the psilocybin industry.” 

49. Minerco and Shumake underscored the purportedly independent nature of the 

OVT’s process by announcing an anticipated timeline for the OVT’s efforts.  Minerco’s press 

release explained that it “anticipate[d] the pre-money valuation and financial projections within 

14 business days.”  Shumake also discussed the OVT valuation process in posts on the 

InvestorsHub message board under his “Burntcheeze” alias, echoing the press release’s statement 

that the “valuation report will be within 14 days.”  On January 4, 2021, again posting as 

Burntcheeze, Shumake expressed his supposed continuing curiosity about the forthcoming 

results, ruminating:  “I’m waiting on the valuation. What could that look like.”  

50. In reality, an OVT valuation is not an independent or third-party appraisal, and its 

results are nearly instantaneous – it is essentially a calculator, prompting the user to input data 

including historical revenues, projected revenues, and balance sheet figures in response to 37 

questions, and then using embedded formulas to generate a business valuation in seconds.  

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51. Given the OVT’s nature, Minerco’s and Shumake’s statements that Minerco had 

“hired” the OVT to conduct a “third party” valuation company over “14 days” were a charade.  

Minerco hired the OVT to create a valuation only in the sense that a company hires Microsoft 

Excel to create a spreadsheet.  Shumake created the OVT account online on December 28, 2020, 

the day of Minerco’s press release, and because he had immediate access to the software, he 

could have generated a result almost immediately.  Instead, to build anticipation while 

maintaining the illusion that there was an independent company with expert employees 

conducting a thorough analysis, Shumake waited 14 days to use the software to generate the 

valuation.  At no time was Shumake “waiting on the valuation”; he could have generated it 

whenever he chose. 

52. Nor was there any mystery to Shumake about “[w]hat that [result] could look 

like.”  His ability to manipulate the OVT’s inputs meant that he could essentially achieve 

whatever output valuation he desired.  Indeed, when Shumake finally used the OVT software to 

generate a report on January 14, 2021, he did so twice, using different inputs.   

53. Shumake’s involvement in the valuation is clear.  Although the version of the 

report published online redacted Shumake’s name from visibility, the report’s cover page 

identified him as the contact person.  

54. Having self-generated a $1 billion valuation, on January 14, 2021, Minerco 

misleadingly posted on Twitter the message “Finally our [OVT] valuation is done,” and included 

a graphic showing Minerco with a valuation over $1 billion.  Minerco posted a nearly identical 

Tweet on January 15, 2021, stating:  “Finally received our Valuation Report from [the OVT] 

Software. 14 Days later.”  The tweets continued the misleading implication that Minerco had 

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17 
 

waited 14 days to receive the OVT report when in fact it was generated instantly when Shumake 

chose.   

55. The OVT valuation charade paid dividends:  Minerco’s stock price increased by 

approximately 18%, from at $0.0014 at the close on January 14, 2021, to $0.00165 on January 

15, 2021.  

56. On the next trading day, January 19, 2021, Minerco repeated the false and 

misleading statements, issuing a press release and a Tweet claiming it had received a $1 billion 

valuation from OVT.  In it, a quote attributed to Jenge stated:  “This valuation will give 

definitive confidence as to the strength and viability of the psilocybin industry.  In addition, it 

gives confirmation that we are in the right industry with the right business at the right time.”  

Shumake paid for Minerco to publish the January 19 press release using his credit card.  

57. The valuation misstatements continued to pay:  Minerco’s stock price closed up 

approximately 9%, from to $0.00165 on January 15 to $0.0018 on January 19, and the next day 

(January 20) it increased approximately 17%, to $0.0021, with an intraday high of $0.0025.  

3.  False and Misleading Statements in OTC Markets Filings 

58. Defendants also made material misstatements in Minerco’s public disclosures.  

On or about January 7, February 1, March 11, and May 25, 2021, Minerco posted public 

financial disclosures (“Disclosure Statements”) on the OTC Markets website pursuant to the 

OTC Pink Basic Disclosure Guidelines (“OTC Guidelines”).  Jenge signed each of the 

Disclosure Statements as Minerco’s CEO, CFO, and Principal Financial Officer, and he 

uploaded each from his personal Gmail account.  The Disclosure Statements were false and 

misleading as described below.  

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59. First, the Disclosure Statements disclosed only Jenge as an officer, director, or 

control person of Minerco – they did not disclose Shumake’s involvement or role.  The failure to 

state Shumake’s involvement violated the OTC Guidelines with respect to at least the second two 

Disclosure Statements.  On March 1, 2021, OTC Markets updated the OTC Guidelines to make 

clear that the Disclosure Statements should identify as “Company Insiders” “any officer, and any 

director of the company, or any person that performs a similar function, regardless of the number 

of shares they own” – a capacious definition easily encompassing Shumake.  Jenge signed and 

uploaded the March 11 and May 25 Disclosure Statements, but each failed to list Shumake 

despite his controlling Minerco’s operations at least to the extent that any officer or director 

typically would. 

60. The motive for omitting Shumake was clear:  He had a relevant criminal history.  

The OTC Guidelines called for disclosure of the “Legal/Disciplinary History” of “Company 

Insiders,” including “whether any of the persons or entities listed above have, in the past 10 

years, been the subject of:  A conviction in a criminal proceeding . . . (excluding traffic 

violations and other minor offenses).”  Shumake had misdemeanor criminal convictions, but by 

entirely withholding Shumake’s name as a “Corporate Insider,” Jenge and Minerco evaded the 

requirement to disclose them.   

61. Additionally, Minerco’s 2021 Disclosure Statements falsely stated that it was an 

“[a]ctive” Nevada corporation.  To the contrary, the Nevada Secretary of State had revoked 

Minerco’s corporate charter the previous summer (on July 1, 2020) for failing to pay fees and 

file its annual report.  Under Nevada law, the revocation terminated Minerco’s right to transact 

business and required it to be treated as insolvent, with its assets held in trust by the company’s 

directors.  Nev. Rev. Stat. § 78.175.  Consequently, Minerco’s reports of an “[a]ctive” status 

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19 
 

were false, and it had no corporate legal standing to engage in any of the activities and operations 

it purportedly carried out, including conducting business, entering into contracts, and pursuing a 

joint venture.   

D. Minerco’s Scheme Successfully Boosted its Stock Price and Trading Volume 

62. As they intended, Defendants’ deceptive scheme and false statements successfully 

“pumped” Minerco’s stock price and volume.  On October 1, 2020, Minerco’s stock closed at 

$ 0.000001 (1/10,000 of a penny).  By February 10, 2021, however – merely four months later – 

Minerco’s stock closed at $0.0127, a remarkable 1,269,900% increase despite its low absolute 

price.  Trading volume likewise skyrocketed from approximately 22 million shares on October 1, 

2020, to nearly 3 billion shares on February 10, 2021.  

Part Three:  The First Sale – Company A Liquidates More Than 600 Million Shares 
  

63. Once Defendants caused Minerco’s stock price and volume to spike through their 

deceptive scheme and statements, Company A began selling large quantities of stock.  As 

described above, Shumake had instructed Person A to enter into an agreement that transferred 

Jameson’s one billion shares of Minerco stock to Company A, and that transfer occurred on 

September 16, 2020.  At the time, Minerco’s stock was worth about $0.000075 per share.  On 

October 1, 2020, Company A opened an account at an offshore bank in the Bahamas.  By 

December 18, 2020, Company A had arranged for the transfer agent to reissue the one billion 

shares into the Bahamian bank’s name.  The Bahamian bank held omnibus accounts at U.S. 

broker-dealers.   

64. On February 10, 2021, after the stock price had spiked, Company A rapidly sold 

many of these Minerco shares into the market.  Company A’s representative gave trading 

instructions to the Bahamian bank, which sold the stock through its New York brokerage on 

Company A’s behalf.  In a single day – February 10, 2021 – Company A sold about 255 million 

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20 
 

shares for gross proceeds of about $2.95 million.  Between February 10 and February 17, 

Company A sold more than 600 million shares of Minerco stock (approximately 9% of its total 

trading volume) for proceeds of approximately $7 million.  

Part Four:  The Second Pump 
 

65. Heavy selling tends to drive down the price of a stock, but a pause in selling and a 

series of positive statements and promotional efforts sometimes can stabilize the stock price and 

lead to greater ultimate gains from future sales.  In that vein, during a pause in Company A’s 

sales of Minerco stock, Defendants issued additional public statements including false 

statements, all with the intention of further boosting Minerco’s stock price and volume.   

A. Minerco Announces Affiliation with a Famous Rapper 

66. On February 27, 2021, Minerco issued a press release announcing that it had 

named a well-known rapper as an “ambassador” to “raise awareness on the company’s overall 

mission to educate the masses on botanical products such as cannabis or psilocybin.”  Shumake 

paid to publish this press release with his credit card. 

B. Minerco Announces an Imminent or Actual Relationship with University of 
Michigan 

 
67. On March 28, 2021, during a Minerco-hosted investor conference call, Minerco’s 

representative announced that “we have entered into a relationship, or are about to enter into a 

relationship, with the University of Michigan for the testing of magic mushrooms for medicinal 

purposes, in particular, depression, insomnia, and other . . . unmet needs that we are currently 

studying.”  However, no such relationship existed.  

C. Minerco Announces that It Will Sponsor a Massive Concert 

68. On April 19 and again on May 13, 2021, Minerco announced that it was 

sponsoring a livestreamed concert with ticket sales projected to exceed one million worldwide.   

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69. On April 13, 2021, Jenge signed a contract to produce the concert.  Shubox wired 

the $237,500 appearance fee (of contract price of $475,000) from its bank account, for which 

Shumake was an authorized signer.  This same bank account received proceeds from Company 

A’s sales of Minerco stock, including a wire receipt the previous day for approximately 

$500,000.  

70. On May 5, 2021, Shubox provided a deposit for a private rental of a concert hall 

in Detroit as the venue for the concert, but Defendants had no intention to stage the actual event; 

Minerco never signed a rental agreement, nor did it make preparations with the venue to stage 

the concert.  Shumake and Shumake’s local agent were the only people who spoke with the 

concert hall about the rental.  On May 17, the venue officially canceled the concert and forfeited 

Minerco’s deposit.  The live concert never happened. 

Part Five:  The Second Sale – Company A Sells 325 Million Additional Shares 
 

71. Between April 20 and May 26, 2021, Company A resumed selling Minerco stock 

and sold approximately 325.5 million additional shares for gross proceeds of about $1.3 million.  

72. In total, between the first and second phases of selling, Company A sold about 

928 million of the one billion shares that it had received for sale pursuant to its contract with 

Jameson, for proceeds of about $8.4 million.  

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22 
 

 

Defendants Circulate the Fraud Proceeds to Shumake 

73. Just after the final round of selling, Company A transferred approximately $7 

million of the fraud proceeds first to its bank account in the Bahamas, and then to accounts at a 

US and Canadian digital assets fintech company, which converted the funds into crypto assets 

including Tether (USDT) and Bitcoin (BTC).  Those accounts then transferred the majority of 

the crypto assets to other accounts at the fintech company and two cryptocurrency exchanges.  

74. Shumake’s Shubox account at the fintech company received approximately 

16.236 BTC and 2.566 million USDT, excluding fees, which accounted for approximately $3.4 

million of the Minerco stock sale proceeds.  

75. Shubox then transferred approximately $2.7 million of the $3.4 million in ill-

gotten gains to U.S. bank accounts in the name of Shubox LLC.  As explained above, Shumake 

is the sole member of Shubox and an authorized signer on each of the company’s bank accounts.  

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23 
 

76. Shumake used the money in the Shubox accounts to fund personal expenditures 

including payments to a car dealership, jewelry stores, grocery stores, and restaurants.  He also 

paid approximately $26,000 to Jenge; $23,000 to the PR Firm’s affiliate; $237,500 to the concert 

talent agency; and additional amounts to Minerco’s transfer agent, lawyers, accountants, and 

others who did work for Minerco.   

77. During the Relevant Period, Defendants’ pump-and-dump scheme inflicted 

pecuniary harm on investors who traded Minerco shares.  Investors who bought Minerco stock in 

reliance on the public announcements that were either misleading or false, or that created a false 

appearance of fact, were duped.  They paid a higher price than the shares were worth, and they 

suffered losses when they tried to sell their shares.  Moreover, Minerco’s issuance of one billion 

additional shares diluted existing stockholders’ equity.    

Attempt to Destroy Evidence 

78. On October 1, 2021, SEC staff issued a subpoena to Jenge for documents and 

testimony in the investigation that gave rise to this action.  That same day, the staff emailed a 

copy of the subpoena package to Jenge’s Minerco business email address.  UPS delivered the 

subpoena to the garage of Jenge’s then-residence in Norfolk, Virginia on Monday, October 4, 

2021, at 9:18 a.m.  The day after the SEC subpoena arrived, Shumake requested that Minerco’s 

email service provider remove seven email boxes in the Minerco domain, including the email 

boxes for “Robert”; “miners”; “Julius”; and “ceo.”  These efforts to destroy evidence in the wake 

of Jenge’s receiving the subpoena are strong evidence of scienter and consciousness of 

wrongdoing.   

  

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24 
 

 

COUNT ONE 
 

False Statement or Misleading Omission in the Purchase or Sale of Securities  
Violations 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)] 
(Against Minerco, Shumake and Jenge) 

 
79. Paragraphs 1 through 78 are realleged and incorporated by reference as though 

fully set forth herein.   

80. Section 10(b) of the Exchange Act provides that it shall be unlawful for any 

person, directly or indirectly, by the use of any means or instrumentality of interstate commerce 

or of the mails, or of any facility of any national securities exchange to use or employ, in 

connection with the purchase or sale of any security registered on a national securities exchange 

or any security not so registered, or any securities-based swap agreement, any manipulative or 

deceptive device or contrivance in contravention of such rules and regulations as the 

Commission may prescribe as necessary or appropriate in the public interest or for the protection 

of investors. 

81. Rule 10b-5(b) provides that it shall be unlawful for any person, directly or 

indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or 

of any facility of any national securities exchange, to make any untrue statement of a material 

fact or to omit 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. 

82. By reason of the foregoing, including but not limited to Paragraphs 7, 8, 35, 41-

61, 67, 73-78, Shumake, Jenge, and Minerco 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]. 

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COUNT TWO 
 

Scheme to Defraud in the Purchase or Sale of Securities  
Violations of Section 10(b) of the Exchange Act and Rule 10b-5(a) & (c) thereunder 

[15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5(a) & (c)] 
(Against Minerco, Shumake, and Jenge) 

 
83. Paragraphs 1 through 78 are realleged and incorporated by reference as though 

fully set forth herein.   

84. Section 10(b) of the Exchange Act provides that it shall be unlawful for any 

person, directly or indirectly, by the use of any means or instrumentality of interstate commerce 

or of the mails, or of any facility of any national securities exchange to use or employ, in 

connection with the purchase or sale of any security registered on a national securities exchange 

or any security not so registered, or any securities-based swap agreement, any manipulative or 

deceptive device or contrivance in contravention of such rules and regulations as the 

Commission may prescribe as necessary or appropriate in the public interest or for the protection 

of investors. 

85. Rule 10b-5(a) and (c) provide that it shall be unlawful for any person, directly or 

indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or 

of any facility of any national securities exchange, to employ any device, scheme, or artifice to 

defraud (Rule 10b-5(a)), or to engage in any act, practice, or course of business which operates 

or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of 

any security (Rule 10b-5(c)). 

86. By reason of the foregoing, including but not limited to Paragraphs 7, 8, 16-34, 

36-40, 62-66, 68-78, Shumake, Jenge, and Minerco, violated, and unless restrained and enjoined 

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

5(a) and (c) [17 C.F.R. §24010b-5(a) and (c)]. 

COUNT THREE 
 

Obtaining Money or Property by Means of False Statement or Misleading Omission in the 
Offer or Sale of Securities 

Violations of Section 17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)(2)] 
(Against Minerco, Shumake, and Jenge) 

 
87. Paragraphs 1 through 78 are realleged are re-alleged and incorporated by 

reference. 

88. Section 17(a)(2) of the Securities Act provides that it shall be unlawful for any 

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

transportation or communication in interstate commerce, or of the mails, directly or indirectly to 

obtain money or property by means of untrue statements of material fact or by omitting to state 

material facts necessary to make the statements made, in light of the circumstances under which 

they were made, not misleading. 

89. By reason of the foregoing, including but not limited to the allegations in 

paragraphs 7, 8, 35, 41-61, 67, 73-78, Defendants Minerco, Shumake, and Jenge violated Section 

17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)(2)].   

COUNT FOUR 
 

Scheme to Defraud in the Offer or Sale of Securities 
Violations of Sections 17(a)(1) and (3) of the Securities Act [15 U.S.C. § 77q(a)(1) & (3)] 

(Against Minerco, Shumake, and Jenge) 

90. Paragraphs 1 through 78 are re-alleged and incorporated by reference. 

91. Section 17(a)(1) and (3) of the Securities Act provides that it shall be unlawful for 

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

transportation or communication in interstate commerce, or of the mails, directly or indirectly:  

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to employ any device, scheme or artifice to defraud (Section 17(a)(1)), or to engage in 

transactions, practices, or courses of business that operated or would operate as a fraud or deceit 

upon the purchasers of such securities (Section 17(a)(3)). 

92. By reason of the foregoing, including but not limited to the allegations in 

paragraphs 7, 8, 16-34, 36-40, 62-66, 68-78, Minerco, Shumake, and Jenge violated Section 

17(a)(1) and (3) of the Securities Act [15 U.S.C. §77q(a)(1) and (3)].   

93. prevent unjust enrichment, such proceeds should be disgorged. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court enter a Final 

Judgment: 

1. Finding that the Defendants committed the securities law violations alleged in this 

Complaint; 

2. In forms consistent with Rule 65 (d) of the Federal Rules of Civil Procedure, 

permanently enjoining the Defendants from violating Sections 17(a) of the Securities Act, 

Section 10(b) of the Exchange Act, and Exchange Act Rule 10b-5 [15 U.S.C. § 77q(a), 15 U.S.C. 

§ 78j(b), and 17 C.F.R. § 240.10b-5]; 

3. In forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, 

prohibiting Shumake and Jenge, pursuant to Section 20(g)(1) of the Securities Act [15 U.S.C. 

§ 77t(g)(1)] and Section 21(d)(6)(A) of the Exchange Act [15 U.S.C. § 78u(d)(6)(A)], from 

participating in any offering of penny stock; 

4. In forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, 

prohibiting Shumake and Jenge, pursuant to Section 21(d)(2) of the Exchange Act [15 

U.S.C.§78u(d)(2)], from serving as an officer or director of any issuer that has a class of 

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securities registered pursuant to Section 12 [15 U.S.C. § 78l] of the Exchange Act or that is 

required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. §78o(d)]; 

5. In forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, 

permanently enjoining Shumake and Jenge from directly or indirectly, including, but not limited 

to, through any entity owned or controlled by either of them, participating in the issuance, 

purchase, offer, or sale of any security, provided, however, that such injunction shall not prevent 

either of them from purchasing or selling securities listed on a national securities exchange for 

his own personal account; 

6. Ordering that Defendants disgorge any and all ill-gotten gains, together with pre-

judgment and post-judgment interest, derived from the securities law violations set forth in this 

Complaint pursuant to Section 21(d)(3), (d)(5) and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 

78u(d)(3), 78u(d)(5) and 78u(d)(7)]; 

7. Imposing civil monetary penalties against Defendants for each of their securities 

law violations, pursuant to 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)]; and  

8. Granting such other relief as this Court may deem just or appropriate. 

VIII. JURY DEMAND 

 The SEC demands a jury in this matter.  

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Dated: October 9, 2024    Respectfully submitted,  

  
       /s/ Damon W. Taaffe       

Damon W. Taaffe (D.C. Bar No. 483874) 
Trial Counsel 
U.S. Securities and Exchange Commission 
100 F Street, N.E.  
Washington, DC 20549 
Tel: (202) 551-7420 
[email protected]  

 

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