Two former consultants for cannabis delivery and technology company, Eaze, who were found guilty of defrauding banks into processing more than $150 million in cannabis purchases, will each serve more than a year in prison.
U.S. District Judge Jed Rakoff last week sentenced Hamid Akhavan, who is described as the leader of the scheme, to 2 ½ years in federal prison along with a $100,000 fine. Rakoff also sentenced Ruben Weigard, a co-conspirator, to 15 months in prison and a $50,000 fine. Both men were also ordered to pay more than $17.5 million in restitution.
Former Eaze CEO Jim Patterson last year pleaded guilty to his role in the scheme. Eaze was never charged with any crimes and cooperated with the federal investigation which found the consultants used shell companies and fake websites to hide cannabis sales as shipments of dog food, beauty products, beverages, and diving gear from 2016 to 2019. Akhavan and Weigard argued that the banks knew they were processing credit card transactions for cannabis but looked the other way.
In a press release, Manhattan U.S. Attorney Audrey Strauss described the crime as an “elaborate web of lies to deceive U.S. banks and credit card companies into processing more than $150 million in marijuana transactions, in violation of those institutions’ strict policies against such payments.”
“This massive fraud undermined the fundamental integrity of the U.S. financial system, which relies on banks’ ability to identify the nature of the transactions they process. Now Akhavan and Weigand have rightly been sentenced to prison for their crimes.”—Strauss in a statement
Despite cannabis being legalized either for medical or adult-use throughout most of the U.S., it remains federally outlawed and cannabis companies often do not have access to traditional financial services, including banking and credit card processors.
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