Banks including Citigroup and Bank of America were happy to look the other way when customers used their credit and debit cards to buy marijuana online, said lawyers defending two men accused of defrauding banks into processing pot purchases.
“Marijuana is a big business and it’s big business for everyone involved, including the banks,” Christopher Tayback, a lawyer for Hamid Akhavan, told jurors in closing arguments following a three-week trial in Manhattan federal court.
Though marijuana has been legalized for either recreational or medicinal use in a majority of U.S. states, it remains illegal under federal law, meaning many cannabis businesses continue to operate outside the financial system. The House passed a bill in 2019 allowing banks to provide credit-card and banking services to legal marijuana businesses, but it didn’t get a Senate vote.
Akhavan and his co-defendant, Ruben Weigand, worked as consultants for Eaze Technologies Inc., a San Francisco company that runs a site where customers can order cannabis products from dispensaries. Manhattan federal prosecutors claim the men used shell companies and fake websites to disguise marijuana sales as shipments of dog food, face creams, green tea, carbonated drinks and diving gear, tricking banks into processing $150 million of illegal drug transactions from 2016 to 2019.
But the men argue they didn’t commit fraud because the banks already knew their customers were using credit and debit cards to buy marijuana. A lawyer for Weigand characterized the banks’ attitude as “see no evil, hear no evil, speak no evil.”
In his closing argument, Tayback played for jurors the famous scene from “Casablanca” in which Captain Renault cynically claims to be “shocked, shocked to find that gambling is going on” in Rick’s cafe, a moment before collecting his own winnings.
Bank of America Corp. spokesman Bill Halldin and Citigroup Inc. spokeswoman Elizabeth Fogarty declined to comment.
The case is U.S. v. Weigand, 20-cr-00188, U.S. District Court, Southern District of New York (Manhattan).