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Former Eaze CEO Jim Patterson To Be Charged In $100M Cannabis Pay Processing Case

February 17, 2021 10:22 am
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Former Eaze CEO Jim Patterson To Be Charged In $100M Cannabis Pay Processing Case

U.S. federal prosecutors will charge former Eaze Technologies Inc. CEO Jim Patterson in a case surrounding $100 million in credit card-based cannabis payments.

According to Law360, citing court records, Patterson will be charged on Feb. 19.

A trial is scheduled for March 1.

What's Alleged: The charges against Patterson connect to a Manhattan district case alleging that two businesspeople — Ruben Weigand and Hamid Akhavan — duped banks into processing cannabis sales.

Patterson's charges have not been revealed. Court documents suggest he is expected to plead guilty.

Eaze has not been charged and has cooperated with federal investigators, the company claims.

Patterson stepped down as Eaze CEO in 2019. His departure was not reportedly linked to any federal investigations, but rather layoffs and a changing company focus.

If the March 1 date holds, this would be the Southern District of New York's first white-collar case since the pandemic put a halt to proceedings in November.

Why It Matters: Allegations against Patterson and the other parties involved highlight the ongoing issues revolving around payment processing in the cannabis space.

Due to federal regulations prohibiting banking access, delivery companies must operate as cash-only ventures.

In 2019, Eaze was sued by another in-state delivery brand, Herban Industries, over claims that Eaze gained a market advantage using routed transactions and shell companies in Europe for credit payments.

The case eventually went to mediation, resulting in its dismissal.