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Marijuana companies are still battling high-level fraudsters, according to the Colorado Marijuana Enforcement Division, which recently sent another warning to the state’s cannabis industry of “reinforcing fraud cases.”
The June 7 memo warned marijuana business owners that scammers didn’t go away despite several warnings from the MED and the Denver Police Department. This is the fourth memo the MED has sent the industry since last October, with 48 fraud attempts reported nationwide during that period.
According to MED, about 20 percent of these 48 attempts were successful. “Suspects have successfully tricked employees into delivering cash or prepaid purchase card numbers and defrauded companies of tens of thousands of dollars,” the MED memo reads.
MED officials and pharmacy owners contacted by Westword describe the fraud attempts as very complicated and detailed. Scammers have posed themselves as government inspectors, law enforcement agencies, utilities, product sellers, and even employers of marijuana workers and established a conversation or relationship with the company through phone calls and text messages. Employees would then be asked to provide photos of their workplaces for a fake inspection by state inspectors or cash for fake utility bills or license fees.
Yuma Way, a network of five pharmacies in the Denver area, saw multiple fraud attempts by counterfeit Xcel Energy and MED employees earlier this year, but co-owner Rita Tsalyuk says the company has seen no further fraud attempts since those first attempts failed. Another Colorado pharmacy chain, Rocky Road Remedies, wasn’t that lucky.
“They’d ask for a different cell phone number because they didn’t want to tie a shop phone. As soon as they got the cell phone number, they change history,” said Stephanie Hull, operations manager for Rocky Road, earlier this year. “Then contact the manager via SMS and present yourself as Director of Operations, General Manager or someone else.”
After several store fraud attempts in 2020 and 2021, including one where someone who claimed to be the manager demanded $ 10,000 to be delivered to a hospital, Rocky Road is still dealing with similar ones, according to President Tad Bowler Try to fight. Recently, an email address with a domain name similar to that of Rocky Road Remedies’ Aurora store has contacted corporate contacts, he says, and dubious emails regularly ask for his cell phone number.
“Often times, fraudsters try to build trusting relationships with their victims through frequent communication. In every phone call or text, the suspect revealed the names and photos of business owners or managers and shared relevant information about the company in order to gain the trust of employees, ”said the MED of June 7, Memo Reads.
While posing as an employer or colleague, scammers have asked employees to download encrypted SMS applications for undetectable communications and instructed them to deliver cash to an off-site location, often a hotel parking lot or a Bitcoin ATM, the MED adds .
The MED is urging marijuana companies to report any suspicious activity to law enforcement agencies. When asked if the Colorado Attorney General is investigating the cannabis company’s fraud, a spokesman said the office “cannot comment or confirm the existence of any complaints or investigations.”
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Thomas Mitchell has been a cannabis-related writer for Westword since 2014, covering sports, real estate, and general news for publications such as the Arizona Republic, Inman, and Fox Sports. He is currently the cannabis editor for westword.com.