Buying medical cannabis plants remotely and recouping returns of between 36% and 66% from their resale in less than 108 days--this is what investment platform Juicy Fields was offering its clients. Since mid-July, groups of investors have been organising themselves, both on Facebook and Telegram, to file a complaint against Juicy Fields. Since then, the platform's operators have been absent.
Faced with the risk of not getting their money back, 1,200 Spanish investors initiated a class action against the owners of Juicy Fields at the end of July, accusing them of fraud. The scale of the case quickly spread to several European countries. The Luxembourg Public Prosecutor's Office has confirmed to Paperjam that complaints have recently been filed and that it is highly likely that more will follow. An investigation has been launched.
The Public Prosecutor's Office and the police indicate that they will not comment on the details and status of the investigation. Nevertheless, on 29 July, RTL reported that 260 people had already reported to Luxembourg via a Facebook group. RTL also reported that 101 victims had already lost €1.6m. Indeed, Juicy Fields operated sales activities in Luxembourg. Distributing its investment products via "ambassadors", at least one active profile was identified in Luxembourg via professional social network LinkedIn. In addition, a website of ambassadors affiliated with Juicy Fields has a page--under construction--for Luxembourg clients.
A series of intriguing signals
At first glance, there are several signs that the owners of Juicy Fields are trying to throw a spanner in the works of any trace that might lead back to them. For example, the domain name of the platform's website contains data that is deliberately concealed to prevent the identification of its administrator. On its contact page, Juicy Fields states that it is operated by "Juicy Holdings BV", a company registered in the Netherlands, but provides telephone numbers with a Swiss dialling code and a legal address in Zurich--without including any street name.
Juicy Holdings BV also has its own website. The website gives a postal address that refers to a virtual office rental centre in Amsterdam. Juicy Holdings BV's website also lists the name of JuicyFields AG, registered in Switzerland. The address of the company points to a historic castle in the canton of Zurich, while the cantonal commercial register lists a completely different address, located in a business centre that operates office rental.
When checking the validity of the VAT number provided on the Juicy Holdings BV website, using the European Commission's tool for this purpose, an error message appears on the screen. In addition, a check with the Dutch Trade Register shows names of directors that do not match those mentioned on the company's website.
Make a complaint
If these open-source concerns were not enough, the German Federal Financial Supervisory Authority, BaFin, warned on 30 March that Juicy Holdings BV was in breach of investment law, publicly offering an investment in the form of a subordinated loan without any prospectus. As a result, on 3 June, BaFin imposed a ban on Juicy Holdings BV from distributing its investment products in Germany.
When contacted, BaFin explains that it has no mandate to pursue criminal activities and initiate procedures to recover misappropriated assets. It encourages victims to file a complaint with the judicial authorities. This is the only way for defrauded investors to have a slim chance of recovering their funds.
In Luxembourg, the Commission de Surveillance du Secteur Financier (CSSF) is of the same opinion. As Juicy Holdings BV is not a supervised entity and has not issued a public offering of securities in Luxembourg, the CSSF has no jurisdiction in the matter. The Luxembourg regulator advises victims to file a complaint either with the Public Prosecutor's Office or with the police.
According to the exchanges between the CSSF secretariat and Delano’s sister publication Paperjam, the investigation initiated by the Public Prosecutor's Office will analyse the modus operandi of the instigators and will identify--if possible--the location of the allegedly misappropriated funds. To this end, the Luxembourg branch of the European Consumer Centre (ECC) stresses that it is essential for victims to submit their complaint with as much information as possible. If, for example, a victim has been contacted by an intermediary of the company, he or she is advised to reveal their identity and telephone number to the attention of the investigators. As complaints are received, this will enable investigators to gain a better understanding of the methodology of the alleged fraud.
Between €3,000 and €45,000
Victims must be patient while waiting for the conclusions of the investigation. Many questions remain unanswered. The cross-border dimension of the case, on the part of both the instigators and the victims, is not making the work of the investigators an easier. Indeed, identifying the companies involved--which may well be fictitious--locating their directors and tracing the flow of money will be a long-term task.
The stakes in the investigations are high, given the sums invested. The CEC tells us that it has already received two complaints from people who have paid about €3,000 and €45,000 respectively. Even if data is still lacking to understand the extent of the fraud, the sums already known may be substantial for individual customers. Experts familiar with this type of fraud case are not optimistic about the ease of recovering the misappropriated funds, especially as the investment products distributed by Juicy Fields are not subject to any regulatory oversight.
The only immediate option for victims to recover their funds would have been to ask their bank to carry out a "chargeback". However, this option only works for payments made with a bank card. From the information available, it appears that customers were transferring their funds to Juicy Fields via bank transfer or cryptocurrency services.
This story was first published in French on Paperjam. It has been translated and edited for Delano.