Up in smoke: Cannabis Ponzi scheme leaves Maltese investors penniless

A number of Maltese retail investors have seen their investments disappear after a cannabis investment platform promising massive returns stopped operating, in mysterious circumstances.

The global fall-out from what is believed to be an ‘exit scam’ by the creators of Juicy Fields, a platform that allows investors to reap interest from the trade in legally-grown cannabis, has touched upon Malta, with several investors reporting losing large sums of money.

“My family lost over €108,000 through the scam. We don’t know what we can do,” one of the victims who spoke to this newspaper said. At least 40 other Maltese investors are believed to have lost their savings with Juicy Fields, filing criminal complaints with the police. Investigations in Germany and Spain are also ongoing.

The cannabis investment platform supposedly connected micro-investors with small cannabis farmers, to fund crop cultivation that was then legitimately sold. Investors were told they could expect returns of up to 66% on their investment in just 90 days.

The company’s main tool was its online platform. Users could buy and sell plants, manage them in virtual greenhouses and have their money paid out. Those looking to invest in the company were allowed to deposit up to €180,000 via bank transfer of crypto-investments, without needing to do any background checks.

The company billed itself as a supplier for the medical cannabis industry, promising massive returns that doubled investments almost immediately: for example, a ‘juicy flash’ investment of €50 would return anything between €68 to €83 after a 108-day harvest; the ‘juicy haze’ paid out over €11,000 over five years, for a €2,000 investment. The allure of such lucrative returns was obvious – investors initially were paid out these high returns, convinced that Juicy Fields was a safe deal.

The mystery for the thousands of Juicy Fields investors is who exactly the company’s owners are, and where have the millions – possibly billions – invested gone?

In July, users started noting a suspicious pattern of behaviour gaining speed – they reported being blocked from withdrawing funds, and the company’s social media profiles disappeared. One of its chief promoters, Daniel Gauci, was based in Malta, a cannabis ‘evangelist’ with a successful social media presence – he has now left the company.

One swindled investor remarks how matters changed from one day to the other: “We never had any issues; on the contrary, they were always efficient on their support lines, any problems that arose were dealt with immediately. The red flags came when we flagged a small issue on their support email and the reply 24 hours later was that the email address does not exist.”

The victim, who spoke under condition of anonymity, ended up investing €50,000 in what is now being billed a Ponzi scheme.

Another victim who spoke to MaltaToday said they started off investing €1,000, on recommendation of someone who works in the Maltese financial services industry. When he convinced his wife and son to invest, the family ended up pouring €108,000 into the scam. “We lost everything. My son’s life insurance had just ended, and he had €30,000 in savings. He only ended using €5,000 – the rest have now been lost,” he said.

Another investor invested €70,000. “I thought it was a legit company since payments were being transferred to a European bank in Cyprus (ISX) and apart from that, all the top official people were very present on social media and on news articles.”

Then when all hell broke lose in mid-July, investors started receiving emails that the employees of Juicy Fields were on strike and that the CEO had resigned. “I panicked and contacted Daniel Gauci on LinkedIn and he told me I shouldn’t be alarmed but he also said that he cannot give me any further info as he had resigned two weeks prior,” he said.

Juicy Fields is neither a company registered in Malta, nor licensed by the Malta Financial Services Authority. But Daniel Gauci, the company’s chief business development officer, trades under his own personal company, Juicy Network. MaltaToday is unable to ascertain whether the companies are related.

On LinkedIn, Gauci posted a letter saying he had no knowledge of the scam, believed to be perpetrated by Juicy Field’s ultimate beneficial owners, who are said to be Russian and Colombian.

“Mr Gauci did not participate in or have knowledge of the facts in dispute. In fact, both personally and through its representatives, his collaboration and cooperation is offered to the competent authorities, to the extent that it can contribute with respect to the events that occurred, the authors and the rest of the circumstances are clarified,” the letter reads.

“Given the will to cooperate and provide as much information as may be relevant to resolve the problems that concern so many people, we must highlight and insist in this petition as the intense harassment and threats that Mr. Gauci and his family is receiving so far. Thus, we have the professional assignment to carry out and exercise as many legal actions as are appropriate against all those people who promote or commit illegal acts against our clients Mr. Gauci and his family, who have recently been subject of serious and intolerable threats when no implication or participation relates them to what happened.”

Daniel Gauci is no longer associated with Juicy Fields, according to a statement he posted on his LinkedIn profile

Contacted for a comment, Daniel Gauci did not answer.

Victims who spoke to this newspaper said they have reported the case to the relevant authorities.

Money on the move

While uncertainty still looms around Juicy Fields, some users have detected movements of tens of millions of euros in cryptocurrencies on the blockchain.

A blockchain address associated with Juicy Fields was recorded carrying out deposits and withdrawals. On 14 July, one wallet held about $105 million.

Juicy Fields is allegedly currently carrying out a process called ‘blending’ or ‘mixing’, which consists of executing thousands of seemingly meaningless moves to make it impossible to keep track of the funds. Once they are spread across multiple wallets and mixed with other amounts, they are sent to multiple exchanges from where they would be withdrawn into fiat currencies.  

A Ponzi scheme?

Users in online forums speculate whether the Juicyfields case could become as big as the OneCoin $4 billion cryptocurrency scam. The dimensions of the fraud at Juicyfields are as yet unclear. A Spanish law firm representing small investors claims that more than €9 billion have flowed through the digital wallets – the crypto accounts of Juicyfields.

What is apparent is that deposits from new Juicyfields customers seemed to have been used to pay out earlier investors, who also received bonuses if they could convince others to buy Juicyfield’s virtual cannabis plants.

Several versions of what happened are circulating on the Internet: The most widespread is that a group of Russians with a background in cryptocurrencies have orchestrated the scam. Other versions have parts of the management team forge signatures to empty the coffers. None of Juicyfield's former top-level executives have made a public appearance since the scandal broke.

Juicyfields, which started in 2020 with an office in Berlin, changed its headquarters to the Netherlands and then Switzerland in the course of this year, in a possible attempt to escape police investigations and inquiries by financial regulators.