By Reenat Sinay

Law360 (February 24, 2021, 7:55 PM EST) -- A German businessman told a New York federal court Tuesday that cannabis-related bank fraud charges against him should be permanently tossed because the risks of holding court proceedings during a pandemic can't outweigh his constitutional right to a speedy trial.

Ruben Weigand is slated to go to trial next week in what will be the first white collar criminal jury trial in the Southern District of New York since November. It has been delayed twice due to COVID-19 concerns that eventually prompted a districtwide suspension of jury trials.

Weigand contends that he has not consented to any exclusions of time under the Speedy Trial Act ordered since Dec. 1, resulting in more than 70 days of nonexcludable time that has elapsed since his initial appearance in April and requiring dismissal of the indictment.

He further maintained that the COVID-19 pandemic shouldn't prevent him from exercising his constitutional rights and that he has "undoubtedly suffered prejudice as a result of the delays of his trial," which had an initial start date of Dec. 1.

"The COVID pandemic alone does not justify the Court's two recent exclusions of Speedy Trial Act time, from December 1 to January 15 and from January 7 to May 17, under the Act's 'ends of justice' provision," Weigand's motion read.

Factors to consider when determining if an exclusion of time should fall under the act's "ends of justice" provision include whether that exclusion would be likely to result in a miscarriage of justice, as Weigand argues is the case here.

"This Court's October/November 2020 trial, as well as other activities this District's citizens have been permitted to engage in, have demonstrated, quite clearly, that a jury trial has been possible for some time now," he said.

Prosecutors charged Weigand and co-defendant Hamid Akhavan last March, saying they ran a "transaction laundering scheme" that sought to mask more than $100 million worth of credit card marijuana purchases so banks would clear them.

The scheme used dummy online merchants that ostensibly sold typical consumer goods, inducing pet products and face creams, the government said.

The alleged co-conspirators intended to mislead banks, which generally refuse to handle marijuana transactions because of its federal prohibition. The workaround also supposedly involved falsified merchant categorization codes, which financial institutions use to sort transactions.

Both men face one count of bank fraud conspiracy each. The former CEO of cannabis company Eaze pled guilty to one count of bank fraud conspiracy last week for his role in the alleged scheme.

Eaze, one of the country's largest online marijuana marketplaces, was hit with a civil suit advancing a similar narrative in California state court in 2019. Competitor Herban Industries CA LLC claimed Eaze gained an unfair advantage through a transaction processing scheme that routed customer payments through European shell companies. The case was dismissed after the companies entered mediation.

Eaze is not named as a defendant in the criminal action.

Representatives for the government declined to comment Wednesday. Counsel for Weigand did not immediately respond to requests for comment.

Weigand is represented by Andrew J. Levander, Michael J. Gilbert, Shriram Harid and Steven Pellechi of Dechert LLP; Katherine T. McCarthy and Morris J. Fodeman of Wilson Sonsini Goodrich & Rosati PC; and Michael H. Artan of Michael H. Artan Lawyer APC.

The government is represented by Christopher J. DiMase, Nicholas Folly, Tara M. La Morte and Emily S. Deininger of the U.S. Attorney's Office for the Southern District of New York.

The case is U.S. v. Weigand, case number 1:20-cr-00188, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Jack Queen. Editing by Andrew Cohen.

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