JuicyFields’ Alleged Ponzi Scheme May Be The Biggest Scam In Cannabis History
28 July 2022, 22:00:00
Hundreds of millions of dollars disappear along with the JuicyFields founders, leaving thousands of investors in the Dutch-based crowd-funding scheme out of pocket
A cannabis investment platform operating worldwide promised high returns to invest in cannabis plants cultivated by top cannabis industry giants.
Many so-called “e-growers” joined the company and invested in the cannabis crowdfunding platform.
Recent investigations suggest the founders of JuicyFields may have scammed hundreds of thousands of investors, running off with millions of dollars deposited in the company’s bank accounts through bank deposits and cryptocurrencies.
Here is what you need to know about JuicyFields’ alleged scam.
In recent weeks, several European news media outlets reported an alleged scam involving Juicy Fields, a cannabis crowdfunding platform. According to the journalism investigations, the company allegedly scammed its investors for hundreds of millions of dollars.
Established in 2020, JuicyFields offered a service where investors or, as the company called them, e-growers, could participate in the cultivation, harvesting, and sale of cannabis plants promising monthly returns between 6% and 14%.
JuicyFields claimed its platform had 500,000 users, mainly from Europe and Latin America.
Users could invest up to €180,000 (around $183,000) starting from €50.
Money could be deposited and withdrawn via bank transfer or cryptocurrencies.
They could buy and sell plants, manage them in virtual greenhouses, and have their money paid out.
However, JuicyFields suddenly stopped its operations in mid-July. It froze cash withdrawals, removed their profiles from social media networks, and disappeared without a trace. Therefore, its users could not log in to their accounts and withdraw money.
According to several publications that covered the story, the alleged scam was based on a Ponzi Scheme.
Typically, a Ponzi scheme pays high interest to investors. This helps companies to attract users to invest in the pyramidal scheme.
Initially, companies pay older deposits using recent deposits’ money to show they pay the promised interest. However, the scheme is suddenly interrupted by the companies’ owners when they decide to block accounts and disappear with all deposits’ money.
In JuicyFields’ case, the company allegedly attracted investors by running advertising campaigns through social media influencers, referral programs, and publishing articles on several news media outlets, building a reputation able to attract more users to the platform.
According to a journalism investigation of Spanish newspaper El País Financiero, JuicyFields claimed to have agreements with top cannabis industry operators such as Aurora Cannabis and Canopy Growth, among others. However, cannabis industry giants denied any relationship with the cannabis investment platform.
It’s not clear the overall dimension of JuicyFields’ alleged fraud. Estimates range from tens of millions to billions of dollars.
El País Financiero reported that the total amount defrauded would be worth hundreds of millions of dollars, but it may be much more.
As the “e-growers” could also invest in cannabis cultivation using cryptocurrencies, some users and experts have detected movements of millions of dollars on the blockchain.
Presumedly, JuicyFields is executing thousands of seemingly meaningless moves to make it impossible to keep track of the funds. The move would be necessary to allocate them across multiple wallets and mix them with other amounts. After that, they are sent to various exchanges from where they could be potentially withdrawn into fiat currencies.
But the financial dimension of the alleged scam is not the only hurdle to understanding the JuicyFields’ case. It’s also challenging to assess the company’s actual owners.
On July 11, the same day JuicyFields froze users’ accounts, a group of its employees announced a strike because the company failed to pay their salary.
Some days later, Willem van der Merwe, the CEO of JuicyFields, announced his resignation.
The resignation announcement came through the words of who is reported to be JuicyFields’ communications director, Zvezda Lauric. On her Instagram profile, she said that the owners had notified the CEO that the funds would be released within 48 hours.
The groups of the users affected by the alleged scam started to circulate an allegedly leaked document obtained by the company’s subsidiaries in Switzerland and the Netherlands.
The leaked document showed the names of those believed to be the real owners of JuicyFields.
To verify its truthfulness, El País Financiero contacted Alan Glanse, former CEO of JuiceFields.
Glanse claimed that to have no responsibility for the alleged scam and confirmed that the names reported in the likely leaked documents are the company’s real owners, whom he met five times in two years.
According to the allegedly leaked document, Paul Bergolts, an individual with a Russian passport, was the majority shareholder of part or all of the Juicy Fields holding with 51% of shares.
Robert Laibach, another individual with a Russian passport, held the remaining 49%. However, in the document, Laibach is reported as a nominee shareholder as the shares belonged to Alex Vaimer and Vasily Kandinski.
German online news media outlet Deutsche Welle also reported that a financial company based in Berlin with ties to an aristocratic family seems to be involved in the alleged scam. JuicyFields had presented this company as a partner and shared the same office address for a while.
In fact, JuicyFields opened an office in Berlin in 2020. However, it then changed its headquarters to the Netherlands and then Switzerland.
It had a bank account in Cyprus, as confirmed by an interview released by Lauric for the Spanish online newspaper elDiario.es in May of this year before the alleged scam was put into action.
The users affected by the alleged scam have found themselves unable to log in to their accounts without their money. Therefore, they decided to sue JuicyFields and are currently working with lawyers to formalize the lawsuit.
El País Financiero contacted a spokesperson for an affected group. The person explained that they would try to see what they can do and are already organizing everything with legal experts to start a class action.
Although some rumors that Germany’s Federal Financial Supervisory Authority (BaFin) froze the accounts of JuicyFields’ subsidiary in Germany, the authority couldn’t comment on the matter. However, it explained that BaFin wouldn’t be able to proceed to freeze accounts.
In Spain, ElDiario.es reported that a group of 200 JuicyFields users had presented the first class action lawsuit against the company. The group aims to charge the company with “alleged continued crime of aggravated fraud, misappropriation, criminal organization, intrusion, and misleading advertising.”
Even before JuicyFields’ alleged scam, several users and experts raised eyebrows and concern among several users and experts, indicating that it could be a scam.
High returns promised by the company to invest in cannabis cultivation, false agreements with top cannabis business operators, an unreliable business model, and no compliance with anti-monetary laundry laws were the first signs that could indicate that a scam was around the corner.
On Reddit and other forums, as well as on YouTube, several users doubted JuicyFields’ operations.
However, JuicyFields’ marketing campaign effectively persuaded hundreds of thousands of users to join the investment platform. Through Telegram groups, users shared their returns, solidifying the company’s reputation, even if several European financial regulators warned of the unreliability of JuicyFields.
Users interviewed by several news media outlets in Europe shared their stories. Some invested only a few hundred euros in JuicyFields. But others believed so much in the e-growing project that they invested even €150,000 (about $153,000).
To date, there has been no official statement on the events from JuicyFields’ directors
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