Ex-Eaze CEO Pleads Guilty in $100 Million Cannabis Payment Scheme
The former CEO of California cannabis delivery platform Eaze pleaded guilty to one count of conspiracy to commit bank fraud in connection with an alleged scheme to deceive banks into processing more than $100 million worth of credit and debit payments for marijuana purchases.
James Patterson’s plea, reported Friday by Law360.com, comes a week before a scheduled March 1 conspiracy-to-bank-fraud trial of businessmen Ruben Weigand and Hamid Akhavan in the Southern District of New York federal court.
Such pretrial pleas often are an indication that the individual is cooperating with prosecutors and could testify against other defendants in exchange for a lighter sentence.
Patterson admitted to working with Weigand and Akhavan to disguise the purchases because he “understood that if banks were aware of the nature of the transactions they would not allow them,” Law360.com reported.
A March 2020 indictment alleged that Weigand and Akhavan created phony online merchants that sold carbonated drinks, green tea, face creams and other products to disguise marijuana payments between 2016 and 2019, therefore circumventing cannabis banking restrictions.
The allegations were similar to a lawsuit filed in a state court in California against Eaze by a competitor in 2019. That case was dismissed and, according to Law360.com, sent to mediation.
For its part, Eaze denied the allegations in the 2019 lawsuit and, last week, said it had cooperated with federal authorities and “is not a defendant in” the case against Patterson.
Patterson resigned from Eaze in 2019.