From his Minneapolis-area farm in Maple Plain, Mark Anderson spent years building Drake’s Organic Spirits into what he described as America’s first spirits line certified organic, non-GMO verified, gluten-free, vegan, and kosher — five certifications that became the commercial identity of his brand and the pitch that attracted 180 investors and $21 million in capital. Anderson started trading commodities with $5,000 borrowed on a credit card, built holding companies and supply businesses before founding Drake’s in 2016, and positioned it nationally through distribution with Southern Glazer’s Wine and Spirits.
When actual revenue fell persistently short of the projections he had made to investors, the SEC alleges he made up the difference himself, engineering round-trip transactions through shell companies he controlled to manufacture millions in fake sales, then using those fabricated figures to raise another $2.4 million from new investors. The SEC filed charges against Anderson, BBFY USA, Inc., and Captain Drake, LLC on April 7, 2026.
The Revenue Gap Anderson Saw Coming and the Sham Sales He Engineered to Cover It
Drake’s struggled to generate sufficient revenue from its founding. Anderson had publicly touted projections of $20 million in annual sales and positioned the company as a fast-growth brand on a path to acquisition by a larger strategic buyer. By late 2021, the SEC alleges, it was clear that Drake’s annual revenue would fall more than 30 percent short of the figures Anderson had represented to investors.
Rather than disclose the shortfall, Anderson directed Drake’s staff in the final two weeks of December 2021 to record approximately $2.6 million in sales. The transactions were not real. Anderson used bank accounts held in the names of BBFY USA and Liquid Solutions, an unregistered entity he operated, to transfer funds into Drake’s accounts. Drake’s then transferred approximately the same amount back out to Captain Drake, another Anderson-controlled entity, completing the circle. No inventory changed hands. Drake’s did not have sufficient product on hand to fill the orders being recorded. No bills of lading, title transfers, or invoices were generated. The result was that Drake’s reported 2021 revenue of $9.6 million, a figure the SEC alleges was overstated by 37 percent due solely to the fabricated December transactions.
How the False 2021 Figures Were Used to Raise $1.5 Million in Convertible Debt
With the inflated 2021 revenue numbers embedded in offering documents, Anderson and Drake’s raised approximately $1.5 million from 13 investors between February and December 2022 through a convertible debt offering — unsecured notes that could convert to equity. The investors who participated were given a financial picture of Drake’s that reflected a company growing toward viability. The picture was built on transactions that had never involved any real commercial activity.
In mid-2022, Anderson ran a smaller version of the same scheme. He transferred approximately $391,000 from Liquid Solutions into Drake’s accounts and directed staff to record the payment as bulk alcohol sales. Again, no product was transferred. The fabricated 2022 revenue figures were then incorporated into offering documents used to raise more than $900,000 from 71 existing Drake’s shareholders in a rights offering for preferred stock between February and March 2023. In total, the two rounds of fraudulent fundraising extracted approximately $2.4 million from investors on the basis of financial statements Anderson knew to be false.
The Board Confrontation, the CEO Resignation and the Discovery of the Fabricated Sales
In April 2023, Anderson resigned as Drake’s CEO at the request of the board and certain investors who wanted more experienced management. He remained on the board. After his departure from the executive role, the board’s chair and Drake’s CFO reviewed the company’s finances in detail and found conditions materially worse than what the financial statements had shown. The board chairman, according to the SEC’s complaint, became concerned that specific sales had been fabricated and directly confronted Anderson about the issue.
Drake’s sold off its remaining assets in the second half of 2023 and ceased operations entirely. The company was formally dissolved in January 2026. The SEC’s complaint states that Drake’s has no assets remaining. The 180 investors who collectively put in approximately $21 million over the company’s seven years have lost most of what they invested. Anderson personally sank between $3 million and $4 million of his own money into the company, a detail his lawyer referenced in a statement calling the SEC allegations groundless and asserting that Anderson had acted appropriately at all times.
What the SEC Charges Seek Against Anderson and His Two Shell Entities
The SEC’s complaint, filed April 7, 2026 in the U.S. District Court for the District of Minnesota, charges Anderson with violating the antifraud provisions of Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. BBFY USA and Captain Drake are charged with the same antifraud provisions for their roles as the vehicle accounts through which the round-trip transactions were executed. The SEC seeks permanent injunctions and civil penalties against all three defendants. Against Anderson specifically, the complaint seeks a conduct-based injunction barring him from participating in the issuance, purchase, offer, or sale of any security, with one narrow exception for transactions in his own personal account. The case remains at the complaint stage with no judgment entered as of April 2026.
Conclusion
Drake’s Organic Spirits was a real company with real products, a national distributor, and a founder who had put significant personal capital behind the brand. The fraud the SEC describes was not the work of someone running an empty shell. It was the work of someone who watched a legitimate business fall short of its own projections and chose to manufacture the numbers rather than disclose the gap. The 180 investors who believed in the five-certification pitch and the $20 million revenue story have been left with a dissolved company, no remaining assets, and an SEC complaint filed eight years after Drake’s first opened for business.
