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Sweet Grass Vodka

The former Sweetgrass Lounge’s patio utilizes rebar for decoration, as seen on Wednesday, Sept. 25, 2024, in Charleston.

A combination lock box is present at the former site of Sweetgrass Lounge, recorded on Wednesday, Sept. 25, 2024, in Charleston.

During a brand party at a resort in October 2023, actor Jeremy Renner and Sweet Grass Vodka proprietor Jarrod Swanger were seen conversing with Brian Richardson, the resort’s food and beverage director.

A view of the previous Sweetgrass Lounge entrance as of Wednesday, September 25, 2024, located in Charleston.

There is a new business announcing its arrival at the old Sweetgrass Lounge spot, dated Wednesday, September 25, 2024, in Charleston.

Jarrod Swanger has been promising that “the money’s on the way” for almost ten years, a line used to pacify investors who are currently seeking to recover millions of dollars they invested.

In a surprising turn of events, Swanger admits he was seduced by the same deceptive promises, resulting in the collapse of his Charleston-based business, Sweet Grass Vodka.

On September 13, his enterprise, Might Be Hungover, initiated legal action against a group of nine individuals and phantom entities, alleging they defrauded Swanger of over $80,000 with the false guarantee of a $10 million investment.

Operations at Sweet Grass Vodka were discontinued in April due to escalating financial woes after three years of activity.

The 46-page legal filing primarily attributes the fault to Rodney Koch, a Las Vegas-based investor who purportedly never provided the essential financial boost Swanger anticipated.

Koch is implicated in two additional federal lawsuits for allegedly conducting schemes that bear a striking resemblance to past ones. Furthermore, Canadian authorities have barred him from trading in Canada for 25 years due to his involvement in a fraudulent investment scheme, according to official records.

In a financial transaction with Koch, Swanger claims to have lost $83,400. However, his financial troubles had already been escalating prior to this event, as outlined in his lawsuit:

The negotiations for financial support started in December 2023, with Koch’s investor group initially proposing $5 million, followed by a revised offer of $10 million, to be repaid over five years. As part of the terms, Swanger was to allocate 20 percent of his company’s equity to Koch.

In addition, Swanger was obligated to pay a $83,400 insurance fee before the receipt of the funds. He made this payment on December 20.

That’s when the stalling started.

Swanger repeatedly asked Koch for the cash, saying he needed short-term capital. But Koch failed to deliver, all the time promising the money would arrive soon, the lawsuit states.

As the wait continued into the new year, Swanger’s company took out two short-term loans to cover his bills. One secured $100,000 at 12 percent interest, which was due March 24. A second for $90,000 had interest accruing at $1,500 a day, the lawsuit stated.

By April, still with no cash from Koch, Swanger’s company couldn’t repay the loans it had taken out or follow through on deposits made to expand the business.

Months later, Koch was reportedly still delaying Swanger, and in July, suggested that Swanger guide the Charleston company through bankruptcy to escape debt. If Swanger proceeded, Koch promised to establish a new company, granting Swanger and his wife a 20 percent share, as evidenced by text messages and a partial call transcript between Swanger and Koch mentioned in the legal claim.

Swanger’s legal action accuses his former CEO, David Matuschewski, of collaborating with Koch to usurp his business and abscond with $10 million. The lawsuit’s only proof of Matuschewski’s involvement is Koch’s statement.

Matuschewski did not provide any comment.

Both Swanger and his attorneys did not respond to comment requests.

The business support and financial injection that were expected never materialized, leading Swanger to file a lawsuit.

This is not the first time Koch has been implicated in fraudulent activities, nor is it the largest accusation against him. He is mentioned in several federal lawsuits in Nevada and was included in a 2009 decision by Canadian authorities.

According to allegations in the lawsuits, Koch has duped numerous businesses in recent times into sending him sums totaling over a million dollars using the same deceptive strategies that led Sweet Grass to lose $83,000.

A group in the Canadian agricultural sector is said to have transferred more than $650,000 to Koch in a transaction purported to secure a $130 million investment. Similarly, a Canadian cannabis company reportedly paid over $100,000 in anticipation of acquiring an investment exceeding $10 million. Both entities are now pursuing legal action against Koch, along with his network of fictive corporations and associates.

Like Swanger, both companies began expending resources and engaging in deals while relying on unfulfilled investments, exacerbating their financial difficulties, according to the lawsuits.

Koch and his associates allegedly assured the businesses that the payments were for an insurance policy on the investments, which would be reimbursed after the completion of the deals. However, it is claimed that Koch diverted these funds to purchase two expensive homes in Nevada, as confirmed by property records in Nevada, The Post and Courier reported.

The lawsuits in Nevada allege that Koch impersonated his son-in-law during these interactions, which delayed the detection of his prior misconduct by the affected companies until it was too late.

According to an investigation by Canadian authorities, Koch is described as “an exceptionally persuasive communicator,” who reportedly deceived individuals out of their life savings. Whenever investors inquired about the timing of their returns, Koch consistently provided excuses, suggesting the payout was imminent, the Canadian investigation revealed.

In 2009, Canadian authorities levied a $225,000 fine against Koch and prohibited him from managing companies or marketing investments in the country for 25 years, after determining that he had defrauded individuals through his enterprise for millions of dollars.

However, litigation indicates that Koch has not altered his deceptive practices. Instead of defrauding investors directly, he now poses as one, targeting companies in urgent need of financial support.

John Kenney, a former Secret Service agent, stated that the accusations against Koch are just a slight twist on a classic con, where victims are tricked into sending money in hopes of receiving substantial future returns. This scam is fundamentally a corporate twist on the infamous Nigerian prince scam. He noted that the most effective con artists manage to persuade large numbers of people to send them modest sums, which generally keep them under the radar of federal law enforcement.

“This is what this guy does for a living,” Kenney said. “He doesn’t have an alternative plan. He just has an alternative scheme. But the plan is to get you to believe in me and send me money.”

Reached by phone on Sept. 25, Koch told a reporter he planned to send the newspaper a statement through his lawyer, probably by the end of the week.

Told that this sounded like the same kind of promise he’s accused of making in a trio of federal lawsuits, Koch sighed audibly, said “Thank you so much, sir,” and hung up the phone.

A lawyer for Koch did not return phone calls.

Swanger’s urgent requests for financial support represent a significant shift from the optimistic outlook he presented to investors in 2022. During a pitch, he claimed his spirits enterprise generated $22 million in revenue the previous year, with expectations to reach $40 million by 2023’s end. A $10 million investment from Koch for 20% equity placed the company’s valuation at $50 million.

Until then, Swanger had portrayed himself as thriving. In 2020, he acquired a luxurious residence in Mount Pleasant and two $150,000 BMW Alpina luxury vehicles, one each for himself and his spouse. Moreover, in the summer of 2023, he engaged actor Jeremy Renner as a promotional face for the Sweet Grass Vodka label.

Swanger also ventured into acquiring additional liquor labels, such as Terry Bradshaw’s Bradshaw Bourbon late in 2022. However, he couldn’t uphold the $1.5 million agreement, as noted by those involved in the deal.

By the final phase of 2023, employees at Sweet Grass were experiencing irregular payment schedules, with some reporting up to a five-week lapse in salaries. Others disclosed to The Post and Courier that they received fragmented payments through the Apple Cash app on their iPhones.

Swanger faced lawsuits from four different parties, accusing him of not repaying over $750,000 in borrowed funds. Additionally, he is indebted to multiple creditors for several million dollars according to Uniform Commercial Code filings.

Koch entered the chaotic scene, offering a substantial sum of money in hopes of resolving Swanger’s financial troubles.

However, the arrangement seemed too favorable to be realistic.

In April, the situation deteriorated when one of Swanger’s creditors confiscated assets from his vodka lounge in downtown Charleston, a worker lodged a labor complaint with the S.C. Department of Wages, and his liquor license was revoked on the last day of April.

While Koch could potentially have rescued Swanger with a $10 million agreement, he was not the root cause of Swanger’s difficulties. Similarly, the media, as accused in a lawsuit by Might Be Hungover, were not responsible for exposing these issues, according to statements from former associates.

Michael Cook, a past collaborator, commented that financial instability was typical with Swanger, who historically used investor funds with the expectation of future financial inputs.

In 2015, Cook partnered with Swanger in North Carolina, investing in his initial business endeavor, a retractable dog leash branded as Lucky’s Leash.

Cook connected Swanger with financiers like Piyush Bhula, an Atlanta-based entrepreneur, who gradually contributed and extended personal loans amounting over $250,000 to support the business foundation.

After persistently requesting a refund for three years, Bhula finally received $10,000 from Swanger, who subsequently severed all connections.

“We continued to demand our money… but then Jarrod disappeared,” Cook explained. “He blocked us on Facebook and other social media platforms and moved away from North Carolina.”

In an approach similar to the one used for Sweet Grass Vodka, Swanger spent substantial amounts hiring celebrities like Paula Abdul and former Nickelodeon star Daniela Monet to promote Lucky’s Leash. His promotional efforts also included trips to high-profile locations such as New York City and Las Vegas for trade shows.

Upon discovering Swanger’s recent ventures, Cook, alongside Bhula, suspected it was a repeat of the Lucky’s Leash scenario.

“He’s obtaining the funds and expending them, and once the product fails or doesn’t succeed, he simply shifts his focus to a new brand or product,” Cook articulated.

Up until now, approximately 23 creditors and investors—which include an individual battling cancer, a local physician, a law enforcement officer, and a small business proprietor in Charleston—claim they have incurred losses exceeding $7 million due to Swanger’s Sweet Grass Vodka business operations.

Several investors have expressed difficulties in locating Swanger following his property disposal in Mount Pleasant on June 21.

As of September 25, judicial documents indicate that Swanger’s business has yet to serve Koch, Matuschewski, or the other suspected conspirators with the legal suit.

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Teri Errico is the senior business reporter at The Post and Courier, focusing on retail and real estate. An award-winning journalist, Griffis previously worked as a Southeast commerce reporter for the Journal of Commerce and a reporter for the Charleston Regional Business Journal where she covered all business in the Charleston region. Raised in Connecticut and New York, she has called South Carolina home since 2012.

John Ramsey is a reporter on The Post and Courier’s Watchdog and Public Service team.

He has worked as an editor and reporter in Richmond, Va., Fayetteville, N.C. and Rocky Mount, N.C.

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