Global cannabis-linked Ponzi scheme busted
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Global cannabis-linked Ponzi scheme busted

Fraudsters bilked victims out of $685m with promises of riches from growing weed

Hemp plants are grown for medical research purposes at the Royal Agricultural Station Pang Da in Samoeng district of Chiang Mai. (Bloomberg File Photo)
Hemp plants are grown for medical research purposes at the Royal Agricultural Station Pang Da in Samoeng district of Chiang Mai. (Bloomberg File Photo)

An international police operation has arrested a gang that defrauded 645 million euros ($685 million) from victims in 35 countries in a scam centred around growing medicinal cannabis.

Nine suspects have been arrested and millions of euros in bank accounts and cryptocurrency seized, Europol said on Friday.

Some 400 law enforcement officers raided premises around Europe and the Dominican Republic on Thursday in an operation against operators of the JuicyFields Ponzi scheme — which Europol said duped more than 180,000 investors around the world.

The gang created a marketing system and attended cannabis fairs to convince people from countries including Spain, France and Germany to invest in the system.

"According to judicial estimates, the total damages resulting from fake investments in the advertised cannabis cultivation crowdsourcing platform amount to a staggering 645 million euros," the Hague-based law enforcement agency said.

"Actual damages could be significantly higher," Europol added.

Between 2020 and 2022, the agency said, JuicyFields enticed customers to invest as little as 50 euros to buy a cannabis plant online to take advantage of "e-growing opportunities”.

The website claimed to link up investors with producers of medical cannabis, promising "annual returns of 100% or more," Europol said.

Initial investors of 50 euros were paid out double their investment.

"Motivated by these financial gains, many investors would raise the stakes and pay in hundreds, thousands, or in many cases even tens of thousands of euros," Europol said.

"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.”

Although 186,000 people paid money to JuicyFields, some 500,000 "e-growers" were getting investment returns.

In July 2022, however, the scheme's backers abruptly removed company profiles from social media networks and stopped users from logging in to their accounts, freezing cash withdrawals.

Widespread reports to police triggered Europol to coordinate a complex investigation involving various European countries and agencies.

The Spanish police force led the operation along with Europol and forces from Germany, France, the Dominican Republic, the United States and the United Kingdom.

The suspects, who have not been named, were detained on suspicion of fraud in Spain, the UK, Germany, Latvia, Poland, Italy and the Dominican Republic.

Luxury cars, hotel parties and music videos were used in an advertising campaign to promote the scheme, Spanish police said, and victims were taken to legal cannabis plantations that were involved in the scam.

Police said they had blocked bank accounts containing 58,600 euros and 116,300 euros in cryptocurrencies, and recovered 106,000 euros in cash. Properties worth 2.6 billion euros were also seized.

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