Overview of Juicy Fields: The Setup and The Fraud
In July 2022, an “e-growing” and “cannabis investment” platform called
Juicy Fields went belly up after being in operations for just over two years.
However, no matter how quickly the company exploded, first onto the
cannabis scene and then the dramatic disappearance of investor money,
this was not a fly-by-night startup that appeared overnight, nor was the
“Exit Scam” accidental.
This entire operation, from concept to implosion, is also far from a group of
IT programmers gone amok. This is, from beginning to end, a sophisticated
and well-planned international fraud – and illegit Unicorn.
The following overview is a summary of Juicy Field’s origin and
background, as well as a description of the conditions in which it was
developed.
Background of The Scam
Juicy Fields was conceived by four people who have previously worked
together on other criminal projects over a period that has lasted at least a
decade in both Russia and the Baltics.
After a year and a half of planning the Juicy Fields concept, they then
recruited six young IT professionals to build the web platform.
It was during this time that the team also decided on how capital would be
managed, and how to market the entire scheme both offline and digitally.
When the concept and the team were in place, the ringleaders approached
the mafia in St. Petersburg, Russia. At this time, they discussed what
percentage the mafia “investors” would receive for their backing of the
project and obtained some help in putting together a team with the
international experience to pull something like this off.
Like all startups, the company had a negative cash flow during the
beginning of its operations. Beyond mafia financing, they also developed a
strategy for company financing that is common in Ponzi schemes. Namely,
the idea was to build a cadre of loyal investors by paying them “returns”
that were received from newer investors. Earlier investors who received
returns could also, as in this case, be counted on to recruit new investors,
including via social media and other digital telecommunications networks,
like Telegram.
Operating this way, while illegal, it is fairly easy to show positive cash flow.
Once that happens, the company is not dependent on the underlying
financiers anymore – and can quickly pay back the investment capital and
interest.
Establishing German Operations
The next challenge was to establish a legal entity outside of Russia.
Germany was chosen because it is well known in this criminal network that
authorities do not have sufficient resources to audit companies that work
with investments. Indeed, for this reason, Germany is considered an ideal
country for initiating money-laundering operations.
The people behind the concept worked for more than 18 months on
technology development and building the organization. The funding the
group obtained from the mafia went to this construction – just like any
legitimate startup company.
They also recruited an organizer with German citizenship who had
extensive contacts with both other criminals necessary to perpetuate the
scheme as well as the ability to hire “legitimate” specialists to create not
only a financial footprint, but also establish themselves in the cannabis
industry.
Double Trouble
Criminal groups use entities like the ones set up for Juicy Fields, for more
than one type of criminal activity. In this case, as in other similar scams,
investment fraud and money laundering are often two sides of the same
coin.
A classic way to launder money is to invest black money into a new or
existing entity, obtain a dividend that can be legally accounted for and
channel such proceeds directly into the banking system, effectively
laundering the black money and making it legit – especially when mixed
with the funds of unsuspecting “investors” who were also essentially turned
into money mules for the operation.
Indeed, the system was set up to create a large number of fake investor
accounts – probably using stolen passports or other stolen identity
documents and even bank account information and hooking this into
specially created crypto wallets.
In total, about 125,000 real investors worldwide created accounts. Beyond
that, however, there is a clear delta between that number, which has been
estimated by looking at activity on established social media channels, and
the number of people that Juicy Fields claimed “used” the platform, which
they gave at about 500,000.
This means that there are at least about 350,000 accounts that were fake,
and it is these fake accounts that have been used to launder money.
According to the investigation so far, it also appears that the money that
was laundered via the Juicy Fields operation came not only from the
Russian mafia but Latin American drug cartels. The company tried to
establish cultivation partnerships in this region of the world first, starting
with Columbia and Medellin district. Representatives of Juicy Fields have
also had frequent contacts with Mexico where drug cartels also operate.
Going Incognito
All the people involved in the scam have used false names. There is a
pattern that is clearly established by both evidence and whistleblowers.
They have used their first real name and then use a false last name.
Per informants, the reason for using a real first name was to make sure that
these operators did not slip up. It is difficult to get used to a different first
name.
All the key operators also have fake ID documents including passports and
ID cards. These are not hard to come by in Russia, and it’s a standard
arrangement in these circles.
We now have the names of all those involved with their real names. These
will later be published when the legal processes have started.
The Russian Connection
Any scam can be described as a startup company. The analogy between
developing and carrying out a fraud and starting a new business is apt for
several reasons – starting with the fact that many criminals, including those
behind Juicy Fields, cloak their illegitimate activities under the guise of a
legal if new business endeavor.
In Russia, since the dissolution of the Soviet Union, a symbiosis between
criminal organizations, the security police and political power has
developed into the “establishment”. Russia has increasingly moved towards
a totalitarian state in which normal legal principles are not observed and the
various groupings cooperate and exploit each other.
As a result, a cottage industry of criminal activity has been spawned
domestically, targeting both Russians but mostly foreigners. While this
state of affairs is not news to international organizations tasked with the
administration of justice and international relations, it is not a reality that the
wider world was aware of – at least not before the attack on Ukraine.
Following Russia’s invasion, however, there have now been widespread
reports of the country’s dysfunctional political system and judiciary.
St. Petersburg has long been the operational center of the Russian mafia.
Branches from this center of crime extend to the three Baltic countries.
Starting in around 2010, the city has essentially operated much like a
Criminal Silicon Valley, with a focus on internet-based investment frauds.
Criminal startup concepts have been given an ideal environment and
conditions to be incubated.
In our organization, we call these criminal concepts not Start-ups but
Scam-ups.
The Russian mafia in St. Peterburg is largely led by people with
backgrounds in Chechnya and Dagestan. Both of these states, tied to
Russia, have an overarching, cross border organization. The Russian mafia
is very similar to that operating in the United States – namely links to Italian
immigrants stretching over generations.
