Federal prosecutors reportedly plan to charge a former CEO of California cannabis delivery platform Eaze in connection with a case accusing two businessmen of deceiving banks into processing $100 million worth of credit and debit payments for marijuana products.
Law360 first reported the case, citing federal district court records in New York.
According to the report, records indicate that former Eaze CEO Jim Patterson will waive indictment by federal prosecutors in New York and plead guilty on Feb. 19 to unspecified charges.
Patterson couldn’t immediately be reached for comment.
Eaze spokeswoman Elizabeth Ashford wrote in an email to Marijuana Business Daily on Wednesday that “as reported, we are cooperating with relevant authorities, Jim is no longer with the company and Eaze is not a defendant in this matter.”
Patterson resigned as CEO of Eaze in 2019 and later left the company.
The two businessmen, Ruben Weigand and Hamid Akhavan, were indicted in March 2020, accused of a conspiracy to commit bank fraud in what was described as a “transaction laundering scheme” between 2016 and 2019.
The indictment alleged that the two, operating the Online Marijuana Marketplace, created fictitious online merchants that sold dog products, dive gear, carbonated drinks, green tea and face creams to route the marijuana transactions and get around cannabis banking restrictions.
Their trial has been scheduled for March 1 in the U.S. District Court of the Southern District of New York, according to court records.
The details of the scheme are similar to the claims in a lawsuit filed in California in 2019 against Eaze by a competitor.
Toronto-based DionyMed filed that suit on behalf of a California subsidiary that ran a marijuana delivery platform called Chill.
The suit alleged that Eaze engaged in bank and wire fraud to process credit- and debit-card payments from customers.
“Eaze conspires to disguise the cannabis transactions as transactions for dog toys, dive gear, carbonated drinks, drone components and face creams, among other things, to obtain approval for these transactions,” the lawsuit alleged.
Eaze said the allegations were false and a “thinly veiled attempt” by DionyMed to publicize its new delivery platform.
A California cannabis attorney said at the time that even if Eaze is innocent of such allegations, some of its retail partners could be guilty and the lawsuit could expose that.
The case was dismissed in 2020.
– Jeff Smith