SHE Beverage Co. Allegedly Used Scam to Fund Casino Gambling

In 2021, California-based SHE Beverage Company, which describes itself as a “celebrity-driven beverage company that sells several products” on its Instagram account with little over 2,000 followers, and its owners Lupe Rose, Sonja Shelby, and Katherine Dirden, were charged by the Securities and Exchange Commission (SEC) for something they allegedly did between 2017 and 2019. 

Namely, conducting a fraudulent offering that helped them raise $15.4 million with the help of false representations and misleading statements made to their investors.

SHE Beverage’s Bottled Water Allegedly Cured Cancer

Rose allegedly issued company shares for $2.50 each which she advertised via several channels including social media ads, investment guides, documents, and verbal pitches.

Some of the untrue statements used by Rose to raise the money claimed that the bottled water SHE Beverage was selling was manufactured with the help of an alleged proprietary and FDA-approved formula and that it could help cure cancer while having other surprising effects on one’s health.

While it was advertised that the company would generate up to $5 million in annual revenue, in reality, the company only managed to sell approximately $263,000 in merchandise in 2018, as mentioned in court documents.

The trio also falsely informed their investors they had personally invested millions of dollars into their venture, which allegedly led to building a brewery, as per the SEC filing. 

In reality, the brewery venue was just partially finished. The three women also “overstated and mischaracterized” the actual nature of their business by making false claims regarding third parties that expressed interest in its acquisition for hundreds of millions of dollars. 

In reality, no such offers existed.

$1.2 Million Spent in Casinos

The company also “falsely represented” that around a third of the funding would be used to purchase beverages. 

The three only spent around 2% on stock while splurging a minimum of $7.5 million on luxury retail goods, cars, trucks, and casino gambling. 

The three owners spent approximately $1.2 million in casinos, $50,000 on Louis Vuitton and Gucci handbags, $180,000 on eight cars and trucks, and $100,000 on lease payments on a house.

The defendants have been ordered by the Central District Court of California to jointly pay $12,021,500 in disgorgement of ill-gotten gains, along with an additional $738,774 in prejudgment interest. 

All three women were also imposed civil monetary penalties. Rose will need to pay $669,687 while Dirden and Shelby will need to cover $334,842 each.

Last October, a Las Vegas casino fraudster was sentenced to jail after stealing $1 million for alleged thefts at Eureka Casino Resort, Circa Hotel and Casino, and the Golden Nugget. The 24-year-old only pleaded guilty to the fraud at Circa Hotel and Casino.

During the same time, an Australian woman who was allegedly involved in scamming elderly people was arrested alongside her husband who reportedly used the ill-gained money for gambling.