Andrew Nash, founder of El Capitan Advisors, had to turn over the keys to his $5 million home in Santa Barbara, Calif., to multi-state operator Planet 13 as a result of a lawsuit accusing him of a massive theft and fraud.
Las Vegas-based Planet 13 has relentlessly pursued litigation against not only Nash, who is under federal investigation, but also his wife Jamie Nash and venture capital firm Casa Verde, which was an early investor in Nash’s company and held a board seat.
El Capitan Advisors, a cash management firm for cannabis companies, is an SEC registered investment advisor that claims to manage $7.4 billion of assets in its last SEC filings. The firm got its start in 2019 with $1 million in seed money from Los Angeles-based Casa Verde, the cannabis-dedicated investment firm known for its celebrity co-founder Snoop Dog, in return for a 20% stake in El Capitan, according to SEC filings. Andrew Nash is listed in the firm’s filings as El Capitan’s chief executive officer and majority owner, with Casa Verde and other outside investors holding at least a 25% stake. Casa Verde Managing Partner Karan Wadhera served as an independent director at El Capitan from its inception until the end of 2023.
Nash’s alleged illegal actions at El Capitan were investigated by CRB Monitor News last year. Casa Verde has fought tooth and nail to get their name thrown out of the litigation in Los Angeles County Superior Court, West District, but the judge ruled Planet 13 could move forward.
Planet 13 was trying to hold Wadhera accountable for a loan-to-own transaction that involved two short-term promissory notes allowing Casa Verde to sell back its 20% stake in El Capitan for $35.7 million. When Nash didn’t pay up, it enabled Casa Verde to get a state court judgement to seize most of El Capitan’s bank accounts at BridgeBank. The problem was that the seized bank accounts were really Planet 13’s money, it claimed in court filings.
At the heart of an amended complaint in November was the notion that Wadhera should have known or was negligent in not doing enough to inspect El Capitan’s books and records before Casa Verde made a sweetheart deal to turn an original $1 million investment into a $35.7 million windfall.
Attorneys for Planet 13, represented by L.A.-based Cozen O’Connor, challenged the valuation Nash and Wadhera agreed to for El Capitan in 2023. They asked the court for punitive damages, which can typically be at least double the amount of the original fraud.
Nashes surrender California ranch
The additional claims against Casa Verde and Wadhera were filed after a third-party receiver was assigned to trace the money trail and find more El Capitan bank accounts when Nash refused to cooperate in court-ordered depositions. Since then, Planet 13 has prevailed in getting back a lot of the $16.5 million they first told their stockholders had been stolen by El Capitan.
According to special purpose receiver Joel Weinberg, the paper trail showed the Nashes used $4.6 million of Planet 13’s funds to purchase a new home in June 2022 for cash. The property is in a gated golf course community called Hope Ranch in Santa Barbara. Hope Ranch offers homeowners equestrian trails, tennis courts and private access to a beautiful beach.
“The clarity of the Receiver’s conclusions respecting the funds used to purchase the home and the clarity of the fraudulent conduct on the part of Mr. Nash to cover-up the transaction cannot be understated,” Weinberg said in a report filed with the court last year.
Additionally, at closing of the Santa Barabara home, the escrow agent remitted to the Nashes an “overpayment” refund check for $137,562. The receiver found this check appears to have been deposited into the Nashes’ personal bank account after endorsement by Jamie Nash. He’s investigating whether that money also belonged to any of El Capitan’s clients.
Last year, during the litigation, Andrew and Jamie filed for divorce in what sources involved in the case say was an attempt by Andrew to move assets out of reach of any court-ordered judgements, which included the new home. The plan hasn’t exactly worked though. While Andrew Nash has gone off the radar avoiding emails, phone calls and court-ordered appearances, Jamie Nash tried to get her name thrown out of the litigation with her own counterclaim filed in Santa Barbara County Superior Court. But in December, Judge Donna Geck denied her motion. Jamie Nash is apparently now cooperating with Planet 13 in the litigation.
After Jamie Nash gave the receiver keys to El Capitan’s Santa Barbara office, which Andrew had rekeyed in an attempt to stop the receiver’s entry, at least $100,000 of sports memorabilia was found in its original packaging that was allegedly bought with commingled client funds, according to court documents filed by the receiver.
Last year, the receiver told the court it has identified several other Nash-controlled companies; several other banks or money investment companies with whom Andrew Nash or El Capitan did business; and potentially significant fraudulent outbound transfers that will need further research and verification in order to determine who the actual recipients are. As a result, the court granted additional subpoenas to third parties to continue tracing all the missing money. This included a review of Casa Verde’s books and records and Andrew Nash-affiliated accounts at RBC Capital Markets, New York-based Raisin Solutions, Live Life Federal Credit Union and Partner Colorado Credit Union, according to court filings.
Allegations dropped following settlement
On March 3, Planet 13 announced it has now recovered a total of $10.5 million. Part of that money is from Casa Verde returning $2.1 million of the funds it seized from El Capitan.
El Capitan and Andrew Nash have simply stopped responding to court motions. As a result, Planet 13 was about to get a judgement from both parties at the end of February. But it warned stockholders the ability to collect all of that judgment is unknown because the active government investigations could also end up seizing funds. If the SEC were to settle with Nash, a Fair Fund would be set up leaving Planet 13 without control of how recovered assets are distributed among all of El Capitan’s alleged victims.
As a result of this latest settlement, Planet 13’s attorney filed a motion March 13 to dismiss its litigation against Wadhera, Casa Verde and Jamie Nash. On April 8, the court-appointed receiver will present additional findings to the judge in Los Angeles County Superior Court.
According to the receiver report for the month of February, filed March 25, RBC and Raisin Solutions, a digital banking platform that works with federally insured banks and credit unions, are not fully cooperating with the receiver to trace outbound transfers from El Capitan and other Nash-affiliated accounts that could have more of Planet 13’s money. That will be the focus of the April 8 hearing.
None of the lawyers for parties in the litigation responded for comment. Andrew Nash, who is now listed as representing himself (per se), didn’t respond for comment.
