Ponzi Scheme in Cannabis Investments? BaFin Is Investigating

Ponzi schemes are not a rarity in the financial world. Now a Dutch holding company is suspected of having defrauded investors with the help of such an investment construct. The public prosecutor’s office and BaFin are investigating.

The offer was apparently not easy to resist. Via the Internet platform ‘juicyfields.io’, investors were able to invest in medical cannabis through so-called eGrowing. Returns in the three-digit percentage range were promised. With amounts starting from €50, participation in cultivation, harvest, and sale via virtual greenhouses was possible since 2020. Deposits were made by bank transfer or with Bitcoins.

As is usual with “business models” of this kind, the platform operators initially lived up to their announcements. Investors received at least partial payouts. In the further course, however, payments failed to materialize and customer accounts could no longer be accessed.

Read more about a possible Ponzi scheme identified in the cannabis sector and find the latest cannabis news of the day with the Hemp.im mobile app.

Circumstances and indications suggest that the platform is likely to be a Ponzi scheme

In the meantime, the Berlin Public Prosecutor’s Office has become involved. In the meantime, the prosecution authorities have confirmed that the LKA Berlin has searched the homes of those suspected of being responsible, as well as business premises.

With their investigations, the public prosecutor’s office wants to clarify according to its own data whether the plants offered for investment purposes exist at all, or whether and to what extent the investors could have become victims of a capital investment fraud. Twelve people suspected of being responsible are being investigated, and four companies have already been arrested for assets worth around €2.5 million each.

BaFin warns and investigates

In addition to the Berlin public prosecutor’s office, the Federal Financial Supervisory Authority (BaFin) is also involved, which prohibited the operating company Juicy Holdings from making public offers for investments in cannabis plants on June 3rd, 2022. BaFin had previously warned against subordinated loans from Juicy Fields in March 2022. The company had not submitted the required sales prospectus.

On July 20th, 2022, the authority issued a new warning to consumers and corrected a piece of misinformation that had been circulating, according to which the offers of Juicy Holdings had been released in the meantime. BaFin’s investigations into a possible violation of the German Investment Act by Juicy Holdings are also continuing, according to the authority.

In the meantime, the public prosecutor’s office has received 230 notifications. CLLB belongs to the Kanzleien, which strives for the representation of interests of presumed damaged ones. An investor represented by CLLB had invested a total of €13,100 in Juicy Fields between January and July 2022. After the first payment in January, he received a payout of €1,410 in April 2022. After that, no further money flowed.

According to the assessment of the CLLB partner Thomas Sittner there are many indications of capital investment fraud at Juicy Fields: “Juicy Fields not only lacks the necessary sales folder but also the data on the web page, the primary source of information for the investors, is difficult to understand. Among other things, it remains unclear what kind of investment it actually is, who exactly the provider is, how the money is to be invested and what rights the investor actually acquires. The information on the risks is also insufficient in our opinion.”

__

(Featured image by Kindel Media via Pexels)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in Legal Tribune Online, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.