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By Matthew Russell Lee, Patreon Podcast
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SDNY COURTHOUSE, March 13 – The trial of US v. Weigand and Akhavan began before Judge Jed S. Rakoff in the U.S. District Court for the Southern District of New York on March 1. Inner City Press, which has been covering the case including its Wirecard aspects, live tweeted Day 1, here and below.

On March 9 it connected back up to the OneCoin crypto fraud - and the US has explained Hargreaves' phones.

And so on March 10, Inner City Press filed to get DOJ's most recent submission about Hargreaves unredacted. The Court gave until 8 pm on March 11 for response. When it came, at deadline, said justified the redactions as based on Hargreaves' "proactive cooperation."

Inner City Press submitted a brief reply, including that "Given that government witness Hargreaves has spoken at trial of Wirecard and Jan Marsalek, and of Gilbert Armenta who is already before SDNY Judge Ramos in the OneCoin crypto-currency series of cases, it is not clear that characterizing Mr. Hargreaves' cooperation beyond the two defendants on trial here as "proactive" can justify redacting whole paragraphs.     Nor can inclusion of documents in 3500 production justify redacting portions of judicial documents filed in public criminal trials." 

 On March 12, Inner City Press was in the courtroom when Judge Rakoff took the bench. He did not rule on the redactions - he said he had received the reply from Inner City Press and would rule by email on Sunday night or from the bench on Monday. Notably, as of 4:40 pm on March 13, none of the March 12 government exhibits have been uploaded and made available.

  But, on March 13, this deal on experts: "The parties have reached an agreement regarding the admissibility of certain documents in exchange for not calling Mr. Akhavan’s other proposed expert, John Vardaman. Mr. Rankin’s Expected Testimony Consistent with the disclosures previously provided to the government, and set forth in the opposition to the government’s motion to exclude expert testimony, Mr. Rankin will explain the role of the acquiring bank as it relates to the various intermediaries that act between the acquirer and the merchant, including independent sales organizations (“ISOs”) and third party processors (“TPPs”), in the credit card process. He will describe the lack of privity between the participants in the fourparty credit card network system (consumer, issuing bank, acquiring bank and merchant). Mr. Rankin will explain the exclusive responsibilities of acquiring banks in onboarding merchants into the credit card network, including the Know Your Customer (“KYC”) process, how and why a merchant category code (“MCC”) is selected, how a merchant name and descriptor are used in the system, and the rules governing these decisions, including the process for challenging the accuracy of a MCC or descriptor. He will testify the acquirer has the sole and non-delegable responsibility to ensure the merchant is in compliance with network rules, including determining an appropriate MCC and descriptor. He will differentiate the information that acquirers learn about a merchant from what is learned by the credit card network or the issuing bank through a transaction."

  Inner City Press live tweeted from the March 12 proceedings, here:

now Eaze CEO Patterson is on the stand. AUSA Folly asks why he was disinterested - really, uninterested - in joining Eaze at first.

He: It seems risky. Just before letting the jury go for lunch, Patterson was asked if when Eaze's founder asking him to join he was interested or disinterested. Judge Rakoff noted that disinterested means, No financial stake in something.

 So  Eaze  ex-CEO, now cooperator, James Patterson is still on direct examination. He describes going to Ray Akhavan's place of work and that, I saw porn on the computer screens, I was surprised to see it in such a large room, then I went up to Ray's office.

Patterson: I was weird that Keith had us go to Ray's office, instead of him coming to us. He was supposed to be the vendor. He had an Alpha male type presence -- Defense lawyer: Objection to narrative. Now they're citing a government exhibit - we should get it

 AUSA Folly: What was your position then at Eaze? Patterson: I was CTO. But then there were allegations by employees against Keith and he stopped being CEO. He went to work with Ray. I became interim CEO of  Eaze . [He's pled guilty and is cooperating.]

 Patterson: The problem was, the credit card descriptor didn't say "Eaze." So it led to a lot of charge backs. We tried to reach out to people, even give refunds so they wouldn't initiate any charge-backs and tell their bank they had purchased marijuana

Patterson: It was decided not to list credit cards on Eaze's website - Visa or MC might have secret shoppers and come check out the site... We would use cookies and the descriptor websites could read them and redirect them to a billing page instead of landing page

Patterson: Keith had a non-disparagement clause. But he was in a bar in LA and he started saying how Eaze had a weak CEO.  Defense: Objection, hearsay. Judge Rakoff: I'll allow it. AUSA: You may continue. Patterson: I told Ray he had to stop dealing with Keith.

The jury is filing out. Judge Rakoff has another proceeding at 3:45. Still he urges the lawyers to think, Can it ever be reasonable to say, I don't care about this deception, I am happy making money. Would that be a reasonable banker?

  After Judge Rakoff held an oral argument in another case, he conducted a proceeding about prospective expert witnesses, who appeared by Zoom, including about the Cole memo. We'll have more on all this.

 On March 2, evidence began - and witnesses with immunity deals. (Tassone's immunity deal is now on Patreon, here). Inner City Press tweeted in Day 2, here.

  Day Four began with news, tweeted by Inner City Press, that a juror had tested positive for COVID, and ended with cooperator Oliver Hargreaves on the stand.

  Day Five, things took off. The remaining 13 jurors all tested negative and when Hargreaves testified, first about fake website for golf equipment and facial cream, he soon turned to the meat: Wirecard and Jan Marsalek, live tweeted thread below. Inner City Press has asked the US Attorney's Office to make available the exhibits, as is done in other cases. So far, nothing. Some live tweets from the thread, here and below.

On March 9, world's collided. Hargreaves on cross examination admitted he and his boss Gary Murphy had dealt with OneCoin crypto-Ponzi money launderer Gilbert Armenta, whom Inner City Press has covered, including exclusive reporting on Armenta's ongoing businesses. Inner City Press retweeted from the cross here and below.

  March 9 ended, after the jury left, with Judge Rakoff admonishing one of Weigand's lawyers not to himself testify, for example that "you left on a flight the same day you arrived") and not to tell the jury that the prosecution would be recommending Hargreaves' sentence to the judge. "That's now how it works in our District."

On March 10, Hargreaves was cross examined, then a Bank of America witness took the stand. Inner City Press live tweeted, here:

Defense lawyer: You used the code, Medical services 8099, for marijuana?

Hargreaves: We thought it was elegant. A consultant proposed it. Defense lawyer: In your second day as a cooperator, you told the US, It didn't work with Paynetics, correct?

Hargreaves: Yes.

Akhavan's lawyer: You told the agents, we tried to do marijuana delivery with Ray, right? Hargreaves: Yes. Akhavan's lawyer: And you didn't say, false, or misleading, or deceptive? Hargreaves: No, sir.

 Re-direct: AUSA: Mr. Hargreaves, part of your cooperation with the government was to give full access to your phones and ProtonMail, correct? Hargreaves: Yes.

 AUSA: Let's put up Government Exhibit 3604. Do you remember this, one of the websites your team designed for the  @Eaze  scheme? Hargreaves: A fictitious website. Ray and Ruben worked on it.

 AUSA: These fraudulent business plans were sent to EUprocessing at ProtonMail dot com - that was Ruben [Weigand], correct? Hargreaves. Yes.

Next witness in US v. Weigand / Eaze / Wirecard was long at Citibank, now at Bank of America, in "payments innovation." Not much time for questions - Judge Rakoff has another proceeding at 4 pm (which Inner City Press also covered.)

The BofA official says, "In the US, we do not do any kind of business with marijuana related businesses." Gov't offers exhibits 2410, 2411. Judge Rakoff: You may step down.

 Judge Rakoff suggests to government they trim their case by a day. Then defense urges that an agent witness tomorrow be trimmed, as not having personal knowledge of the documents.  Judge Rakoff: If you're not contesting authenticity, the janitor would get them in ...

The trial's done for day.

 And still none of the exhibits Inner City Press requested on March 8 and March 9 have been provided. Watch this site.

The case is US v. Weigand, 20-cr-188 (Rakoff).

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