BRADFORD, Pa. — Bradford resident Shane Hvizdzak has been named in an Ohio investigation into an alleged drug trafficking and money laundering scheme involving illegal THC vape cartridges.
A federal Complaint in Forfeiture was filed last month in Cleveland against assets owned by six people in a probe that includes Dank Vapes.
In the 40-page complaint, Hvizdzak and Hvizdzak Capital Management are among several third parties that the U.S. Attorney’s office claims were laundering money from the illicit drug sales.
When asked if Hvizdzak is under investigation regarding the Ohio case, Assistant U.S. Attorney Henry DeBaggis of the Northern District of Ohio said, “I can neither confirm nor deny that there is an ongoing investigation.”
Hvizdzak, 32, and his brother, Sean, 34, of St. Marys, currently are in settlement discussions with the Securities and Exchange Commission as a result of a multi-million-dollar cryptocurrency hedge fund fraud allegation here last year.
The Ohio case mentions Shane Hvizdzak and the company Hvizdzak Capital Management, but does not mention Sean Hvizdzak.
The brothers’ attorneys both commented on the matter in Ohio.
“The forfeiture complaint names dozens of innocent persons and businesses unknowingly swept up in financial transactions which the Cleveland U.S. Attorney is alleging are part of a drug trafficking investigation of two Ohio/California residents,” said attorney Efrem Grail, representing Shane Hvizdzak. “To believe any of these innocent persons or businesses knowingly assisted or helped in any of the alleged criminal conduct in that case does them a grave disservice.”
Attorney David Bernardinelli said, “Sean Hvizdzak is not alleged to have been a participant in the conduct discussed in the Complaint in Forfeiture and, indeed, he was not. Nor, did he have knowledge of the underlying conduct alleged in the complaint. Sean Hvizdzak did not participate in any money laundering activity or conspiracy.”
The Ohio complaint alleges that Eyton Senders and several associates were operating a multi-million-dollar business of selling THC vape cartridges across the country. In an attempt to make the proceeds appear legitimate, Senders used numerous third parties to conceal the source and nature of the funds, the complaint stated.
THC vape cartridges are federally illegal, and the Dank Vapes cartridges are linked to vape-related lung illnesses, according to the Centers for Disease Control and Prevention.
Transactions involving several third parties, including Shane Hvizdzak, were spelled out in the complaint. A Fifth Third Bank account owned by Senders and another person received four deposits totaling $305,000 from Gemini Trust Company.
“Gemini Trust is a virtual currency exchange and was used by Shane Hvizdzak and Hvizdzak Capital Management to launder drug proceeds for Senders and associates,” reads a footnote in the complaint.
Five pages of the 40-page complaint detail financial transactions with Hvizdzak, including through Northwest and CNB banks.
In the CNB account of Hvizdzak Capital Management, a total of $1,352,000 was transferred in from people connected to Senders, the complaint stated.
The Northwest account was a personal checking account. During the time period of Sept. 18, 2019 to Feb. 26, 2020, there were deposits of $8,005,197.33 relating to Senders, the complaint alleged. Transactions were detailed in which “Senders’ associates were paid large sums of money” from Hvizdzak and his businesses, and Senders’ associates sent money to the Capital Management company.
“The payments to lenders and acquaintances of Senders also demonstrate a mechanism to launder illicit proceeds,” the complaint read.
The U.S. Attorney’s office was seeking the forfeiture of numerous houses, properties, vehicles, high-end jewelry, a gold bar and more than $2 million in currency.
Regarding the Hvizdzak cryptocurrency fraud case, in June of 2020, the SEC had filed a complaint against the brothers and their companies including Hvizdzak Capital Management. The complaint alleged the two owned the business in Bradford, that they allegedly took money from investors, said it was being invested in digital assets and fabricated statements saying the investments were earning huge returns.
However, the SEC alleges the brothers took around $31 million from investors, put much of it in their personal accounts and then moved it outside the United States. Some of the funds were put in untraceable digital accounts, the SEC said.