A federal grand jury in the District of Columbia has indicted Bobby Shumake Japhia, 56, of Michigan, on charges of defrauding investors in Minerco Inc. (MINE) and obstructing an SEC investigation. The indictment alleges that Shumake, who used multiple aliases including Robert Samuel Shumake Jr. and Shaman Bobby Shu, orchestrated a fraudulent scheme involving Minerco, a company that publicly claimed to develop and market psilocybin mushrooms, also known as magic mushrooms.
Shumake allegedly ran Minerco's operations behind the scenes, using another individual, Julius Jenge, as a figurehead CEO to conceal his role due to Shumake’s criminal history and negative media coverage. The indictment claims that Shumake used materially false and misleading information in press releases and investor communications to artificially inflate Minerco’s stock price.
Starting in January 2020, Shumake promoted Minerco as a leading player in the psychedelic mushroom business. To boost public perception and demand for Minerco stock, he allegedly used an alias to pose as an independent investor on internet message boards, falsely portraying favorable opinions of the company. Shumake also enlisted others to help promote Minerco online, further misleading potential investors.
According to the indictment, Shumake covertly acquired nearly one billion shares of Minerco stock and sold them, generating at least $2.5 million in profits. His fraudulent activities inflated Minerco's stock price, ultimately causing millions of dollars in losses to investors.
When the Financial Industry Regulatory Authority (FINRA) and the SEC began investigating Minerco, Shumake allegedly provided false information to investigators and deleted critical email evidence after learning about the SEC’s inquiry. He is charged with one count of securities fraud and one count of obstruction of justice. If convicted, he faces up to 20 years in prison on each count.
Julius Jenge, the nominal CEO of Minerco, was arrested earlier this year for his involvement in the fraudulent scheme.
Principal Deputy Assistant Attorney General Nicole M. Argentieri of the Department of Justice’s Criminal Division, SEC Inspector General Deborah Jeffrey, and U.S. Postal Inspection Service (USPIS) Inspector in Charge Eric Shen announced the charges. The SEC Office of Inspector General and USPIS are investigating the case. Trial Attorney Kyle Crawford of the Justice Department’s Fraud Section will prosecute the case.
