Eaze Consultants Convicted for Hiding Pot Transactions From Banks

A New York jury convicted two men of helping California marijuana business Eaze avoid banks stopping its credit card and other transactions involving the federally illegal drug.

The jury in the U.S. District Court for the Southern District of New York on Wednesday convicted Hamid “Ray” Akhavan, 42, a California businessman, and Ruben Weigand, 38, a German e-commerce consultant, on one count each of conspiracy to commit bank fraud.

Federal prosecutors from the U.S. Attorney’s Office for the Southern District of New York alleged that the two men assisted a multi-national scheme using shell companies, payment processing companies and other means to hide cannabis-related transactions from banks’ anti-money laundering and fraud detection tools. The men helped to disguise shipments as dog food, beverages and other products, which led banks to process $150 million of transactions from 2016 to 2018, the prosecutors alleged.

Federal law bars banks and payment processors from doing business with marijuana companies even in states like California where the drug is legal.

Eaze cooperated with the investigation and was not charged.

Weigand and Akhavan were both consultants for Eaze, a cannabis product delivery app developer that had attempted to allow customers to purchase pot with credit cards.

The transactions in question all took place in Oregon and California, prosecutors alleged. Marijuana is legal for adult use in Oregon.

William Burck, an attorney with Quinn Emanuel Urquhart & Sullivan representing Akhavan, said he was “disappointed” with the verdict.

“Our client’s core defense was that the banks were, and remain, complicit in the processing of marijuana purchases by credit and debit cards. We believe the evidence supported that defense and hope to have the verdict overturned,” he said in an email.

The U.S. Attorney’s office and attorneys for Weigand couldn’t immediately be reached for comment.

Former Eaze CEO James Patterson pleaded guilty to one count of bank fraud conspiracy before the trial of Akhavan and Weigand’s trial began on March 1.

U.S. v. Weigand, S.D.N.Y., No. 1:20-cr-00188, Verdict Returned 3/24/21