California beverage company operator arrested for $13.5 million in securities fraud

The president of a Lancaster company that markets beverages to women was arrested this week on a 39-count federal grand jury indictment alleging she defrauded more than 1,000 investors out of more than $13.5 million, most of which was used for automobile purchases, rent payments and gambling.

Lupe Louise Rose, who surrendered to federal authorities, is charged with 38 counts of securities fraud and one count of making false statements to federal investigators.

Rose, president and chief executive officer of SHE Beverage Co., has pleaded not guilty to the charges and has been released from custody on a $20,000 bond. She could not be reached for comment Thursday, Feb. 8.

According to a grand jury indictment unsealed this week, the 54-year-old Palmdale woman marketed SHE Beverage as a women-owned company that sold beer, wine, bottled water and other products primarily to female consumers. From 2017 to 2020, Rose allegedly secured more than $13.5 million from investors nationwide by offering stock in the company at $2.50 per share.

Rose touted SHE Beverage as a successful company during in-person and live-streamed meetings with investors and provided them with brochures and stock offering documents, according to the indictment.

From 2016 to 2021, Rose used $6 million of investor funds to enrich herself, along with her family and friends, through excursions to casinos and the purchase of cars, trucks and luxury clothing, according to the indictment.

Rose also allegedly purchased shell corporations to provide an illusion that SHE Beverage was expanding.

In 2018, Rose allegedly deceived investors, stating that SHE Beverage had generated more than $4 million in revenue, when, in fact, the company had sold less than $263,000 in merchandise. She also falsely told investors SHE Beverage bottled water was approved by the FDA to assist with cancer, diabetes, autism, stress and anxiety, according to the indictment.

Additionally, she allegedly lied to investors about having attended Southwest College, El Camino College, UC San Diego and National College.

She was also untruthful about her business background, erroneously claiming that she had developed the McDonald’s bagel sandwich and created the Versace Tribute clothing line, the indictment states.

The Guam Daily Post reported that in 2019 Rose announced she would start the Women’s Football League Association, which prompted women football players on the island to relocate to the U.S. Rose touted the WFLA as a professional female tackle football league and promised women pay equal to their National Football League counterparts. However, the WFLA never materialized, the Post reported.

In September 2021, the U.S. Securities and Exchange Commission sued Rose for allegedly fraudulently raising millions of dollars from She Beverage investors.

On Jan. 16, U.S. District Court Judge Christina A. Snyder imposed a judgment finding Rose, She Beverage Co. Inc., and two others liable for disgorgement of $12,021,500 in net profits and $738,774 in prejudgment interest.

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