Former Eaze CEO Pleads Guilty to Conspiracy to Commit Bank Fraud

Eaze’s former CEO Jim Patterson pleaded guilty to one count of conspiracy to commit bank fraud. Two co-conspirators in the case are scheduled for a federal trial on March 1.

Full story after the jump.

Former Eaze CEO Jim Patterson pleaded guilty last week to one count of conspiracy to commit bank fraud, according to a San Francisco Gate report. His associates, Ruben Weigand and Hamid “Ray” Akhavan are scheduled for a March 1 trial in the Southern District of New York federal court.

Patterson resigned from Eaze in 2019 and the company is not a defendant in the case, which centers around allegations that the trio created fake online merchants in order to bypass rules related to the use of credit cards for cannabis purchases and funnel more than $100 million in credit and debit payments.

Patterson acknowledged working with Weigand and Akhavan to coverup the purchases because he “understood that if banks were aware of the nature of the transactions they would not allow them,” according to a Law360 report outlined by Marijuana Business Daily.

Eaze was sued by a competitor in 2019 for the same practices. The company denied the charges and ultimately the case was dismissed and sent to mediation, the report says.

Weigand and Akhavan argue that the charges against them are invalid because they are not alleged to have intended to harm or steal from banks, and the funds involved were only transferred through banks, not actually acquired from the banks.

Patterson was named CEO of Eaze in 2016 after the sudden departure of founder Keith McCarty. He was removed as CEO and replaced by Rogelio Choy in October 2019.

Eaze, originally founded as a cannabis delivery app, announced last year it would pivot from a tech platform to a retail, touch-the-plant model.

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