Published on: Wednesday, September 1, 2021

A Manhattan federal district court rejected prosecutors' "fallback" request for a $17 million forfeiture order to be included in the prison sentence of a businessman convicted of a scheme to fool banks into processing more than $150 million of cannabis payments, calling it "unconstitutionally excessive" (article available here).

Instead, the court on Monday ordered Hamid "Ray" Akhavan to forfeit $103,750 — the value of the stock option he was given in San Francisco-based marijuana delivery service Eaze — saying that amount is "proportional to the gravity of his offense." 

Prosecutors say Akhavan, co-conspirator Ruben Weigand and others were in on a ploy to build a system of fake websites and third-party dummy companies that allowed Eaze to take federally unlawful payments between 2016 and 2019. But the court said a $17 million forfeiture order, which the court orally adopted at the time of sentencing, would be an excessive fine in violation of the Eighth Amendment.

"There was no articulable loss to any party as a result of Akhavan's crime and a $17 million forfeiture order is seventeen times the maximum fine and 170 times the actual fine imposed in this case," the court said. "Though this was indeed a serious fraud, and though the defendant fits into the class of persons for whom the statute was principally designed, neither of these factors outweighs the huge disproportionality that these figures suggest."

The court had previously adopted the government's fallback position of more than $17 million in forfeiture but had held off on entering the final written judgment. Before that, the government wanted the forfeiture amount to be more than $156 million, while Akhavan had argued it should be $0.