Another day, another conviction. Due to the delicacy of the legal cannabis market, there are still many practices and laws that clash with one another. For example, while cannabis is legal in California, it is still illegal on a federal level. Because of this federal stranglehold, many banks are nervous to handle cannabis money, even if it’s legitimate by state standards. This, in turn, causes businessmen to create schemes to move money around.
As reported by Law360, two businessmen were convicted of bank fraud in relation to payments made by Eaze delivery service. Eaze is known for delivering a range of cannabis products, including smoke shop items like pre-rolled cones.
Hamid “Ray” Akhavan and Ruben Weigand were found guilty of creating a complicated yet successful method of tricking banks into processing over $150 million in credit card payments for the California-based delivery company. U.S. District Judge Jed Rakoff in New York called the act, “blatant, sophisticated fraud built on a mountain of lies.”
Akhavan was sentenced to 30 months, while Weigand got 15 months. “With respect to the fraud itself, it was a calculated, sophisticated, carefully planned method of deceiving banks and other financial institutions about something that was not only important to them, but also of great relevance to them because of the uncertainty of federal enforcement in this area,” Judge Rakoff stated. Akhavan was forced to forfeit $17 million and was also fined $100,000. Weigand previously agreed to forfeit $300,000 and was fined $50,000.
Assistant U.S. Attorney Nicholas Folly stated that Akhavan, “had a whole team in place to carry out this scheme. And he led it. He led it every step of the way.” In a statement to address the court, Akhavan accepted the verdict, explaining, “This experience has brought me to my knees and I wish I had made different choices.”
Weigand also submitted a statement to the court, declaring, “There have been challenging situations in my life before, but this is by far the most challenging I’ve ever experienced. And it brought me to a point where I thought I wouldn’t able to handle it.”
Weigand is due to report to prison on August 2, however, Akhavan remains in police custody.
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