Police raided several locations around Europe late last week, arresting nine suspects in a four-year cannabis Ponzi scheme that reportedly netted the scammers €645 million ($604 million).
Europol, the cooperative EU law enforcement agency, said police in Germany, Italy, Latvia and Spain were involved in raids against the operators of Juicy Fields, a fintech company that hosted a crowdsourcing platform that promoted fake investments in “e-growing” or “per plant” shares of cannabis crops.
Another suspect was arrested in a raid in the Dominican Republic, and the British National Crime Agency also announced the arrest of a “senior staff member” of the scam in the UK who is being extradited to Germany.
Following ‘breadcrumbs’
“After painstakingly piecing together breadcrumbs of digital evidence, investigators had drawn up a joint intelligence picture that allowed police forces across Europe to initiate this wave of arrests,” Europol said.
Police seized cash, vehicles, art, and various luxury items in the raids.
Europol said “JuicyFields” was an elaborate online pyramid scheme that enticed customers to invest as little as €50 to buy a cannabis plant online. The scam claimed to link up investors with medical cannabis producers, promising annual returns of 100% or more, according to Europol.
Initial investors of €50/$53 were paid out double their investment, which motivated them to invest more, Europol said. “Many investors would raise the stakes and pay in hundreds, thousands, or in many cases even tens of thousands of euros,” according to the agency.
‘Feigned credibility’
“The platform feigned credibility as it was not only represented in the digital world, but upheld the image of a trustworthy legal business structure with physical offices, staff and representation at cannabis industry events,” Europol said.
Actual damages could be “significantly higher” than the initial estimate of €645 million, according to Europol, which said as many as 180,000 investors around the world were duped by the scheme.
The scam’s backers abruptly removed company profiles from social media networks and stopped users from logging in to their accounts in July 2022, freezing cash withdrawals.
VIDEO: A 2022 online meeting at Juicy Fields
Lawsuits fueled probe
Widespread reports to police and related lawsuits brought by Swedish lawyer Lars Olofsson triggered Europol to conduct the complex investigation involving various European countries and agencies.
In late 2022, Olofsson said he had identified as many as 170 individuals, banks and companies with connections to the “Juicy Fields” fraud, and estimated losses as high as $2.5 billion.
The attorney later initiated a lawsuit on behalf of nearly 800 plaintiffs from 50 countries against banks, lawyers and several social and news media outlets that he said helped facilitate investments into Juicy Fields. His claims addressed 70 individuals, 60 banks, and 40 companies, including major social media and news platforms Facebook, Instagram, Forbes, Google, CNN, and YouTube.
Companies and individuals based in Cyprus, Germany, Netherlands, and Switzerland played roles in the development of Juicy Fields, according to the attorney.
Facebook’s role in scam
Swedish lawyer Lars Olofsson identified many individuals, banks and companies that contributed to the scam.
Olofsson filed a class-action lawsuit against Facebook Sweden AB in Stockholm District Court late last month in which he is representing 514 victims he said were deceived by Juicy Fields ads published on Facebook.
“Our evidence clearly proves that Facebook, despite repeated promises, and written commitment of the same, does not have a system in place to prevent fraudulent ads from being published across its ecosystem,” Olofsson said.
“With this lawsuit, I am demanding that Facebook take responsibility for the fact that fraudulent ads appeared on the platform and further that they were not removed when Facebook users (and my clients) reported them as fraudulent ads to the company,” Olofsson said.
Olofsson is seeking damages totaling $23 million (€21 million) lost by his clients as a result of advertisements that appeared on the social media platform.
