The stock promoter utilized by 小蓝视频 businessman and securities fraud convict Avtar Dhillon has entered two guilty pleas over his role in illegally raising tens of millions of dollars’ worth of securities ultimately controlled by a Vancouver-based investment firm.
Jonathan Mikula, 38, of Woodstock, Georgia, has pleaded guilty to conspiracy to tout securities for undisclosed compensation and touting securities for undisclosed compensation.
Mikula, who has a history of securities violations, changed his plea on March 13 and faces sentencing on Nov. 11.
San Diego-based Emerald Health Pharmaceuticals (EHP) hired Mikula to promote it, between December 2019 and August 2022. Mikula published materials via newsletter Palm Beach Venture, which the U.S. Attorney’s Office alleged last February falsely stated that neither the newsletter nor its affiliates had received compensation — a contravention of laws intended to prevent fraud and ensure transparency for investors in the capital markets.
Vancouver-based Emerald Health Sciences (EHS) was the investment firm Dhillon founded and directed and that owned a majority interest in EHP.
“As an officer and significant shareholder of EHS, Dhillon enjoyed and exerted significant influence over EHP and served as an EHP board member,” the indictment noted.
In hiring Mikula to conduct the criminal stock promotion Dhillon worked with “Co-conspirator 1,” a resident of Beverly Hills and chief executive officer and co-founder of a Canadian company the indictment does not name.
Co-conspirator 1 then used a “Canadian entity” (also unnamed) to act as a “financial intermediary” between EHP and Mikula.
The indictment explained, between March 2019 to March 2021, EHP raised approximately US$60 million in gross investment proceeds through the sale of 10.4 million shares; approximately $32.5 million of the funds raised resulted from Palm Beach Venture’s promotion of EHP.
In total, officials claimed Mikula and others received more than US$4.2 million in “undisclosed and misrepresented payments” as well as hundreds of thousands of dollars of compensation in the form of “undisclosed entertainment and illicit services.”
EHP was co-directed by Dhillon’s business associate and Vancouver lawyer Jim Heppell, also an EHS director, who was not implicated in the scheme and who reached a settlement on behalf of EHP with the SEC in October 2022.
Then, Heppell stated the company agreed to pay the SEC a US$517,955 civil monetary penalty but neither admitted nor denied the allegations of concealed paid promotions in the settlement.
In December 2022, Dhillon pleaded guilty to three criminal counts for his role in the pump-and-dump scheme. Following delays, Dhillon faces prison time and is scheduled to be sentenced May 23.
Dhillon initially pleaded the Fifth Amendment in his case but .
Last February, Dhillon filed with the U.S. courts to alter his release conditions in order to sell his US$12-million, 9,300-square-foot, yacht-lined waterfront home at 65 Vista Del Golfo, Long Beach, Calif. in order to pay the US$10.4 million he agreed to forego to the SEC in a related civil suit wherein he was found liable for fraud.
Dhillon still holds title to US$22 million worth of land in the Lower Mainland, held in numbered companies, per land title records from April 12.
Dhillon is banned from promoting stocks and acting as a director or officer of a public company in the United States. However, he could still do so in Canada, as the 小蓝视频 Securities Commission (小蓝视频SC) has not placed on him. (Dhillon is under house arrest, having surrendered his passports.)
Dhillon, 62, is a native of India and a former 小蓝视频 resident who obtained an internal medicine degree from the University of British Columbia. But over the past 25 years Dhillon pivoted his career toward promoting mostly health science companies. During this time he claimed to have raised more than C$1 billion in public and private financing. Dhillon served as past chairman of the Cannabis Canada Council and is a former member of the securities practice advisory committee to the 小蓝视频SC.
In his plea agreement, Dhillon has forfeited his right to appeal a conviction and prosecutors have agreed to a sentence of incarceration “at the low end of the guidelines sentencing range” plus forfeiture of US$1.49 million.
Glacier Media the plea has assigned a “total offence level” of 26 points, based on the serious nature of his alleged crimes and how he “wilfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice.”
shows an offence level 26 with no prior criminal convictions (as is the case for Dhillon) could receive a prison term of 63 to 78 months in a federal prison.
