Earlier this month, we discussed the new guidance issued to banks regarding those things distinctly ungroovy in the federal eye, marijuana businesses. Turns out, they really do need the help, because not only are they not very good at preventing or detecting money laundering, they’re quite easily fooled by those dedicated to it for the purpose of allowing you to pay for blow with your Amex.
The Justice Department and the Federal Trade Commission have recently brought a string of criminal and civil cases accusing individuals and companies of using legitimate-looking websites to deceive financial firms into processing unsavory purchases….
“No processor, even if it spent a fortune, is going to perfectly shield itself from fraudulent merchants,” said Lois Greisman, associate director of the FTC’s Division of Marketing Practices. The FTC, she said, “is seeking to root out processors that are knowingly facilitating fraud.”
Like these two guys, whose websites said they were selling such wholesome products as dog treats and diving gear, but who were allegedly selling weed instead, and may have been in league with Angela Merkel’s favorite payments processor.
In one recent high-profile case, the Manhattan U.S. Attorney’s Office accused two businessmen, Ruben Weigand and Hamid “Ray” Akhavan, of tricking banks into processing more than $100 million in transactions made through Eaze Technologies Inc., an online marijuana marketplace.
Shocking, we know, that such things could get past these company’s airtight due diligence and compliance teams.