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Four charged in Gallatin County over alleged CBD Ponzi scheme

Four men were charged last week in Gallatin County with defrauding investors, farmers and the state of Montana out of millions of dollars while operating a hemp extraction business.

The State of Montana and the Gallatin County Attorney’s Office allege a group is involved Texas-based CBD oil company Isotex Health was involved in a conspiracy, including a Ponzi scheme.

Two of the defendants are residents of Gallatin County, while the others reside in Texas and Washington State. Prosecutors allege that the defendants used fraudulent financial documents and falsified laboratory test results to raise more than $6 million from investors and apply for a small business grant from the state of Montana.

Isotex contracted with several farmers in eastern Montana to grow hemp and leased a large industrial building in Libby, where the company’s CEO reportedly said they hoped to hire more than 100 workers to turn hemp into CBD products to process. But prosecutors allege the company never produced or sold any actual products.

The state subsidy was never awarded to the company. Lincoln County officials withheld the grant, which was announced just days after the company was sued by investors and left its Libby facility.

Preliminary hearings in the case are scheduled for early July in Gallatin County.

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