WASHINGTON — A federal judge warned the CEO of a magic mushroom company under SEC investigation Friday that he was on the edge of being thrown in jail for attempting to board a one-way flight to Tanzania on the eve of a court-ordered deposition.
Julius Makiri Jenge, of Virginia, was arrested at Ronald Reagan National Airport last week just before boarding a flight to his native Tanzania. On the same day, the government unsealed a federal complaint accusing Jenge of securities fraud for his role in an alleged pump and dump scheme involving the stock of his company, Minerco.
Jenge appeared before U.S. Magistrate Judge Michael Harvey on Tuesday and attempted to explain the flight – saying he was traveling to attend the funeral of a friend’s father and intended to buy his return ticket once in Tanzania to save money. But Jenge was unable to provide the name of the decedent or proof at the time of his intention to purchase a return ticket. His court-appointed attorney, Christopher Davis, asked Harvey to reschedule the hearing for Friday afternoon to give him additional time to investigate.
On Friday, Davis was able to provide information to Harvey to corroborate Jenge’s intention to attend a funeral in Tanzania. The judge agreed to release Jenge on GPS monitoring and a $100,000 unsecured bond. Jenge was also ordered to remain in home incarceration at his girlfriend’s residence in Maryland.
Before ordering his release, however, Harvey said he still had concerns about Jenge’s attempt to leave the country and warned him he was “right on the edge of being locked up.”
“If you somehow make it to Tanzania, you better plan on living there for the rest of your life,” Harvey said.
Jenge’s flight to the East African country was scheduled a little more than a week before he was set to appear in a deposition in an ongoing investigation by the Securities and Exchange Commission (SEC) into Minerco, a Nevada-based company that purported to be in the business of developing and selling psilocybin mushrooms, also known as magic mushrooms.
According to an affidavit filed by an SEC investigator seeking Jenge’s arrest, Jenge and an unnamed co-schemer took over Minerco in late 2019. At the time, the company was trading at approximately $0.0001 per share. The SEC said Jenge agreed to play the role of president and CEO because he, unlike his alleged co-schemer, had no criminal history.
Once they had taken over the company, the SEC alleges Jenge assisted his co-schemer in obtaining one billion shares of Minerco. The two then allegedly began pumping up the company’s stock by releasing false and misleading statements and press releases and in a call with investors, including that the company had been acquired by a “specialized investment firm” and “psilocybin research firm.” In fact, the SEC said, the company had been acquired by a Georgia holding company created by Jenge for the sole purpose of taking over Minerco. Jenge also allegedly lied to investors about obtaining an undergraduate accounting degree from the University of Maryland and an MBA from Strayer University – neither of which were true, the SEC said.
As a result of Jenge and his alleged co-schemer’s efforts to pump the company – which included announcing musical artist Sean Kingston as an ambassador – the stock reached a high of nearly $0.016 per share in early February 2021. On Feb. 10, 2021, the SEC said approximately 1 billion shares of Minerco controlled by Jenge’s co-schemer began to be sold. By the time the SEC suspended trading of the stock on May 26, 2021, Jenge’s co-schemer had reportedly made approximately $8.4 million from the sale. According to the affidavit, Jenge was paid approximately $26,000 for his alleged role in pumping the stock.
In the affidavit filed earlier this month, investigators said Jenge reported during a March 2024 interview with the SEC and the U.S. Postal Inspection Service that his co-schemer was the “main guy” at Minerco and made all the decisions. He said he’d allowed himself to be used to take over Minerco because his co-schemer was a “very good talker” and he trusted him.
Jenge, who is a naturalized U.S. citizen, was ordered not to seek a new passport or to travel outside of the D.C. metropolitan area without informing probation. He was scheduled to return to court for a status conference on Oct. 21. As of Friday, his alleged co-schemer had not been charged.