Jim Patterson pleads guilty in $100M bank fraud case

Even for residents of the Bay Area who don't consume cannabis, the cannabis delivery company Eaze has become a household name, partially due to billboards placed alongside area highways. Nicknamed the "Uber of pot," the service was launched in 2014 and was eventually backed with $166 million in funding.

Jim Patterson took over as CEO in 2016, and, as reported by Law360.com and Marijuana Business Daily, pled guilty Friday to one count of conspiracy to commit bank fraud to work around restrictions on cannabis-related companies and bypass rules regarding the use of credit cards for cannabis purchases, which the service allowed until 2019.

Patterson's associates Ruben Weigand and Hamid "Ray" Akhavan are set to stand trial March 1 in the Southern District of New York federal court, Marijuana Business Daily reports, and Patterson's guilty plea comes in advance of their trial. Patterson resigned from Eaze in 2019, and the company is not a defendant in the case.

The allegations regard the creation of fake online merchants through which to funnel more than $100 million in credit and debit payments, including companies that supposedly sold carbonated drinks, green tea, face creams and other products. Similarly, Eaze was sued by a competitor in 2019 for the same practices, although Eaze denied the charges then and the case was dismissed and sent to mediation.

It's not the first (or second) controversy surrounding Eaze, who was also served several lawsuits regarding unwanted text-message advertisements in 2018, one of which was dismissed and another settled.