Swedish attorney Lars Olofsson said he will file a class action lawsuit against several social and news media platforms that he said helped facilitate the massive Ponzi scheme run by cannabis investment platform JuicyFields.
“I´m now taking legal actions against Facebook, Instagram, Forbes, Google, CNN, and YouTube, to begin with,” Olofsson told Green Market Report. “All of them have allowed JuicyFields to expose themselves on their platforms or magazines, and not just normal accounts but paid ads.”
He added: “Later on, I’m targeting the German, Dutch, Swiss and Cyprus governments for a gross lack of their financial authorities, having not seen what was going on.”
As to precedent for holding large tech platforms responsible for due diligence regarding illegal activities by their affiliates, advertisers, or clients, Olofsson cited a case in which the plaintiff accused credit card company VISA with providing payment processing for distribution of child pornography on adult media platform Pornhub. While the case is ongoing, VISA and Mastercard moved to suspend card payments for advertising on Pornhub and its parent company Mindgeek in August after a motion to dismiss the case was denied by a judge.
Olofsson is representing nearly 800 plaintiffs who are former clients of JuicyFields, a fintech company that promised impressive returns on “per plant” shares of cannabis crops, which has since been exposed as a massive Ponzi scheme.
He estimates there may have been up to 125,000 investor accounts on the platform when it imploded in spectacular fashion in July, revealing an apparent scam of massive scale. Olofsson believes that the $2 billion-$2.5 billion that used to be in those accounts is gone.
Another class action suit representing 1,200 JuicyFields clients was filed in August in Spain, but Olofsson thinks that pursuing the company’s principal players (if they can be identified) in an attempt to retrieve financial compensation for losses will go down a rabbit hole of multiple jurisdictions and legal actions that lead nowhere.
“I know they have run away with the money,” Olofsson lamented. “There is no use to find the money, that’s for sure.”
Instead, his plan is to file suit against deep-pocketed “facilitators” without whom, he claims, JuicyFields would have been unable to operate – media companies that generated revenue from JuicyFields’ aggressive advertising campaigns, banks that processed millions of transactions, as well as financial watchdog organizations that regulate investment institutions and monitor suspicious activities.
“Today, I sit on more than 20,000 documents about the company and all that has happened and worked day and night for the last five months, since all was revealed in July,” Olofsson told Green Market Report. “I have internal and not public documents about connections and business deals and a full-scale criminal investigation.”
Government finally taking action
Last month, the European Union published the Digital Services Act (DSA), new regulations for e-commerce companies that bring increased accountability and updated procedures for platforms to better control illegal content, goods, and services. The regulations also require more transparency around algorithms used by large platforms.
The DSA will come into effect fully in 2023 alongside the EU’s Digital Markets Act (DMA), which was approved in September. The DMA is aimed at preventing large digital platforms from imposing unfair practices on business and end users. Both pieces of legislation represent the EU’s increasing attempts to confront bad practices and illegal activities.
“Large corporations have done no due diligence on who they have done business with, banks have massively failed in their compliance, and government authorities have not seen what was going on right before their eyes,” Olofsson noted. “On top of that, several high-profile individuals who have been advocating about cannabis legalization and ‘cleaning up’ the cannabis industry have been on the payroll of JuicyFields and been paid far more than usual consulting fees.”
Identification a challenge – but not impossible
So far, Olofsson claims his investigation has yielded the identities of 70 individuals, 60 banks, and 40 companies associated with JuicyFields business operations and marketing, including major social media and news platforms.
“I have tons of info about many companies, individuals and government authorities who have failed in their responsibility or facilitated for JuicyFields to be able to do sales and marketing – and the scam going on for more than two years. This includes a large number of banks,” he added.
“There have been a number of high-profile lawyers who have made a name in the international cannabis business, advocating for legalization and having a clean industry that’s free from crime and shady business. Two have been on the payroll of JuicyFields,” Olofsson alleged.
“One is German lawyer Mr. Kai-Fridrich Niermann, and the other is Mrs. Shanti Persad-Moeller, who is a lawyer in West Virginia in the U.S. She has done all presentations for JuicyFields for more than two years. Both have been grossly overpaid by JuicyFields.”
Niermann is the founder of KFN+, a German legal practice specializing in cannabis industry compliance. While Persad-Moeller has not updated her social media accounts since 2021, LinkedIn lists her as previously employed by JuicyFields as a “B2C cannabis writer” from 2019-2021, followed by a year-long stint as a “cannabis attorney.” A “green” paper authored by Persad-Moeller and sponsored by JuicyFields, “A Simple Solution for a Profitable Cannabis Business,” also is linked to her LinkedIn resume.
Neither Niermann nor Persad-Moeller responded to requests for comment.
Olofsson spent the summer crisscrossing Europe speaking to executives, business owners, advocates, and cannabis industry insiders.
Despite having spent $10 million a year on marketing since 2020, according to documents obtained in the case, many industry members had never heard of JuicyFields, Olofsson said. Those that did know of the company said it was an obvious scam with lots of red flags, including lack of required cannabis licensing and other noncompliance issues that would have been obvious to professionals.
When he’s tried to contact individuals associated with JuicyFields, Olofsson said they don’t respond to his emails or, if they do, it’s to minimize exposure and distance themselves from the situation.
Green Market Report also reached out to the financial authorities in Cyprus, Germany, Netherlands, and Switzerland.
A representative for FINMA, the Swiss financial supervisory authority, said that JuicyFields “does not have an authorization from FINMA or an affiliation with a self-regulatory organization [SRO],” and that “in general, FINMA consistently follows up on indications of possible violations of licensing requirements and takes measures if necessary.” However, they would not comment on any individual companies, possible investigations, or proceedings due to confidentiality.
AFM, the Netherlands’ financial authority, stated that “in the Dutch trade register (www.kvk.nl) no search results are displayed on the name Juicyfield (sic). However, searching for the name ‘Juicy’ in combination with the address yields a search result, namely Juicy Holding. Juicy Holdings is registered with the Trade Register as of 20 August 2021. According to the Trade Register, this company is active as an organizational consultancy and cultivation of spice crops and not as a financial undertaking. JuicyFields is a shareholder of Juicy Holdings.
“A financial undertaking established in the Netherlands that wishes to operate as an investment institution, investment firm or as a crowd-funding platform, requires a license from the Dutch Authority for the Financial Markets (AFM). When it comes to repayable funds, a license is required from De Nederlandsche Bank (DNB). JuicyFields does not have a license from the AFM or DNB under that name,” the representative added.
German financial regulatory watchdog BaFin declined to comment directly on Olofsson’s investigation, but it did provide some additional insight into the JuicyFields situation.
“Regarding our warning in relation to Juicy Holdings B.V.’s, I want to highlight that Juicy Holdings B.V.’s (alleged) capital investments were/are unregulated capital market products. This means that a company that offers such products does not require authorization from BaFin and is therefore not subject to ongoing supervision,” the German agency noted.
CySEC in Cyprus did not respond.
Media platforms Facebook, Instagram, Forbes, Google, CNN, and YouTube also were contacted for comment and did not respond.
“For me, it’s time for people to take responsibility, when they do not do their work or completely fail in their responsibility,” Olofsson said.