The Wall Street Journal has a ????scoop about a $100M federal fraud case with potentially “profound consequences” for the cannabis industry.
The case involves Ruben Weigand, a German businessman, who was arrested at LAX in March. In an indictment, federal prosecutors charged him with conspiracy to commit bank fraud, “stemming from an alleged scheme to trick banks into processing more than $100M in marijuana sales.”
- Though the company has not been charged, and is not named in the indictment, the story puts delivery app Eaze at the heart of the case.
- Until last year, Eaze allowed customers to pay with credit cards. WSJ: “Prosecutors allege that Eaze executives and other unnamed co-conspirators worked with Mr. Weigand and another businessman…to devise a ‘transaction laundering scheme’ that hid the true nature of the transactions from banks.”
- Prosecutors allege Weigand’s main role, per the paper, was “to manage the alleged network of phony bank accounts used by the phony merchants to process payments on behalf of Eaze. He was responsible, they said, for finding European banks to process Eaze’s transactions.”
- Court filings say at least one Eaze CEO was involved in the alleged scheme. The Eaze executives allegedly involved, apparently no longer work for the company.
- Eaze is reportedly cooperating with authorities “in hopes of leniency,” according to the WSJ. The company says it is now using a new payment system.
- Prosecutors seem to believe an unspecified multinational “criminal network” is involved.
- The case “echoes” a ????settled California lawsuit in which a competitor accused Eaze of “holding an unfair advantage by using a payment system that skirted federal banking rules.”
WSJ PRO - Weigand, who’s in a California jail, has pleaded not-guilty. His attorney says the facts don’t support the fraud charge.
