Background on the scam
Juicy Fields launched on April 1, 2020. The firm offered investors the “opportunity” to invest in legal medical cannabis cultivation.
To participate, users created a customer account where they paid for the investment with either fiat currency via traditional bank transfer, or cryptocurrency.
The slick company website allowed investors to choose what plants they wanted to “buy,” which they could also see maturing in “digital greenhouses.” Juicy Fields claimed that they grew, harvested and sold them to the pharmaceutical industry. They also claimed to have offtake (distribution) agreements with some of the best-known names in the cannabis industry.
Investors were promised returns of 70% within about 3 months.
Juicy Fields marketed itself, aggressively in several different forums. The company was the main sponsor of many international trade shows and conferences in the cannabis industry. Paid ads were placed in both cannabis specialty and mainstream media globally and online communities were built on social media and Telegram where investors could communicate with each other and feel like part of an important, world-changing mission. Online influencers also helped drive sales, promoting the company to their followers and receiving a commission for successful converts.
Juicy Fields also created an entire support organization for marketing and sales that helped with training, marketing materials and arranged various events. The entire business was organized like any other commercial enterprise, with management and several business functions from IT to purchasing and coordination.
However, everything was a total fraud. There never was any cultivation, there were no sales and all the money that came in was used to pay previous investors as well as the extensive marketing created by the company. There was also never any attempt to be in compliance with any certification required by both financial and health authorities to do what they claimed to be doing. Namely, they would have needed a distribution and wholesale license in Germany to sell the cannabis and a separate license to give investment advice (of any kind) for investors.
The company was founded in Germany and subsequently established subsidiaries in Holland, the UK and Switzerland.
The first Exit Scam occurred in July 2022 (the scam is still active via Juicy Fields Dao which was organized during the fall of 2022). At this time investors were shut out of their accounts and could not withdraw their money.
In total, about 125,000 people have invested in Juicy Fields and together they have lost about 3 billion Euros. The investors come from virtually all countries in the world.
While this is shocking, tragically, the entire Juicy Fields fiasco is part of a growing, international trend. Investment fraud, according to joint data from international police organizations and financial institutions, has increased by several hundred percent over the past 3-4 years. In the UK, online scams represent about 16% of all crime.
The variety of fraud is unfortunately large, although many of them share common characteristics, like unusually high returns, and of course, are focused on ordinary people – retail investors – who do not invest professionally and many of whom are just scraping by or are otherwise vulnerable. The methods used by these kinds of scammers are also very sophisticated. Of course, no one invests several tens of thousands of euros or dollars on a first contact with a scammer. The victim is taken through a grooming process in which the fraud is deployed step-by-step. In the end the sums which are extracted are huge for them individually, but beyond this, in sum the amount of money taken by this kind of fraud has become considerable. There is no doubt that advanced psychology is used where the fraudsters use human weaknesses and people’s benevolence or social needs to be tricked into the deception. When studying the methods, one can only conclude that the fraudsters had the help of psychologists who know how people’s behavior works. In addition, the fraudsters have carefully selected their target groups to optimize their fraud. A review of how most of these international scams have been planned and implemented shows that the fraudsters have skillfully designed their business concept, business plan, the construction of their organization and the implementation of the business plan. These scams are, in most cases, textbook examples of “entrepreneurial startups” is taught at the top business universities in the world.
International police organizations and analysts estimate that these investment scams have a turnover of between 50 and 60 billion dollars a year – and this is probably a low estimate. This means that this “industry” is among the 50 largest in the world – indeed about the same size as the overall global drug industry.
Implementing such frauds requires a comprehensive organization. The simplest is to compare a fraud concept with a startup. There isa business idea, a business plan, and there are people to execute on all, with different specific skills (IT, marketing, sales, administration, recruitment, and business management). Then initial capital is raised to invest in IT, initial marketing, salaries, buy numerous services, etc. Then the business plan must be implemented.
Here is one of the telling differences between this kind of criminal enterprise and a legitimate startup. Very few startups succeed and survive one, or at most two years. Statistics say that only a few percent of all startups really get started with any business and become profitable. If a startup succeeds really well, it is called a unicorn. The definition of a startup unicorn is that the company has a value of more than $1 billion. Becoming a unicorn is quite literally “one in a million.” Becoming a unicorn within a year Juicy Fields became a unicorn in less than a year.
That said, successful criminal organizations always have a problem. Namely, they have to build –a large organization, extensive supply chains to bribe people and handle goods completely illegally. This also requires many different forms of coordination. In all these areas there are risks. It, also costs a lot of money to run this kind of large illegitimate organization. One of the reasons that online scams, driven via the internet, are so attractive to this kind of criminal enterprise is that they can be managed at a distance – and further where you do not have to move people and various forms of goods, the risks are significantly reduced, and the profit margin increases many times over. This is why cybercrime has become so attractive to organized crime. If this business is then based in a country where the authorities have poor control, or can be bribed, you have an extremely profitable business.
However, it is not just organized crime that has turned to this option alone. Much of this kind of crime today is also, at least, state sanctioned. Countries under international sanctions are all looking for new income opportunities. This includes everything from weapons smuggling, money laundering, drug trafficking and cybercrimes.
The most notorious example of state-sponsored cyber-crime is North Korea, which, despite almost complete isolation, still manages to develop nuclear weapons and keep a standing army, fully equipped, of several million men. Something that even the biggest, and richest, countries in the world cannot afford. Other examples are Russia and Belarus and to some extent also China, where criminal activities have developed many times over and have become fully organized by the governments of these countries.
Cybercrimes in these countries include not only criminal proceeds, but also part of an information war and destabilization of opponents as well as influencing national elections to one’s own advantage.
There are many examples of these criminal countries cooperating and doing criminal business together. One example is the infamous Lazarus Group, which can almost be compared to a large IT consulting company. The base is in North Korea and China, where large criminal organizations can turn with IT assignments such as hacking and build IT systems for criminal activities. North Korea develops computer viruses that are then sold to Russia, which uses it in extortion of companies and public organizations, for example. The company was sanctioned in 2022 by the US government and its cofounders prosecuted.
Lars Olofsson, with his global investigative organization, has for many years studied, investigated, and helped victims of investment fraud. This is an overall picture of the current global situation that he has repeatedly encountered
A very large number of international investment scams have been organized by the Russian Mafia. The Russian Mafia has had its center in St. Petersburg for many decades. As a result, the city has become a kind of criminal Silicon Valley. People come up with a criminal business idea, they pitch it to a community of specialists with backgrounds in IT, marketing, international contacts, etc. Then the Russian Mafia finances projects they like, much in the same way that a startup turns to a Venture Capital fund. The fraudsters pitch their concept to the Mafia tell them how much capital they need to get started, and negotiate how much the Mafia will take for their investment. There are also strong ties between Russia and Belarus where there is even additional help available from specialists who work for different government bodies and have different international contacts, in return for the Belarusian government getting its share of the deal.
The Russian Mafia and the Russian Security Service, the FSB, are basically two sides of the same coin, and they cooperate and share the profits from the criminal activities, as well as offer support and protection.
Beyond governments, these kinds of scams all share this characteristic. None of them could succeed without the presence of otherwise legitimate individuals, companies and organizations that directly or indirectly helped in various ways to carry out the fraud.
Therefore, these criminals must have a network of trusted international specialists who do not care who they work with and, above all, will not inform on such operations to authorities..
As a result, It takes a long time to build up such a network and for this work requires what is called a “fixer” or “networker.” These individuals also know which officials can be bribed. What is common to all these specialists is that they charge much more for their services than is normal for the type of service they offer. . This is called “hush-money” – literally including a large surcharge for their silence.
Finally, the criminal organizations need what are called “goalkeepers.” These are people who are prepared to publicly stand as CEOs or owners of the companies where the criminal activity is conducted. It is these persons who sign a business name, are registered with tax authorities and various public organizations that register companies and their representatives and owners.
Such a sophisticated network takes a great deal of time, effort and money to build. It is therefore idea an ideal opportunity for a rogue country that sees this activity both as a source of income and as part of destabilization of a political opponent.
Lars Olofsson and his organization have, in many cases, a better knowledge about, as well as the ability to gather certain kinds of information better than many police organizations. For example, it is easier and less intimidating for whistleblowers to turn to Olofsson and his team than going directly to the police. This is why so many whistleblowers have turned to him.
As a result, as in this case, the team around Lars Olofsson has identified virtually all the active people in Juicy Field’s organization. In total, up to a hundred people have been identified by name – both their real names, their aliases, as well as more than 300 companies or individuals who were instrumental in facilitating the fraud. Links between the Russian Mafia, the Belarusian government and the drug cartels in Columbia and México have been established.
Beyond this, there are also indications that there were either individual or systematic corruptions of the international money transfer system. The Juicy Fields fraud is so extensive that its two-year operational history could never have been achieved without some kind of unauthorized influence.
Beyond this, the team has also managed to gather evidence of money laundering and further that funds from the scam also went to terrorist financing and state-sponsored warfare – such as the war in Ukraine