Connect with us

Government

RICO Charges: Once Reserved For The Mafia Now A Familiar Anti-Cannabis Industry Tactic

Published

on

The cost of fighting charges can be staggering, making it a common tool of anti-cannabis movements and individuals.

Charges stemming from the Racketeer Influenced and Corrupt Organizations (RICO) Act have long been a looming threat in the cannabis industry. Coming from civil, state and federal levels, the charges have been used as a method to stymie cannabis operations, whether just or not.

Established in 1970, US RICO charges were initially meant to pursue high profile mob bosses, but now cover a range of offenses, including gambling, money laundering, slavery, racketeering and a slew of other illegal business allegations.

To date, most cannabis RICO cases have been unsuccessful. Still, the process can do immense damage to brands.

legal marijuana
Photo by MasterKeySystem/Getty Images

While cannabis companies have turned the tables using RICO charges at times, the industry remains primarily in the crosshairs. In July, four Arkansas operators saw charges filed by three medical patients alleging overstated THC potencies.

Should The Industry Be Concerned?

Responses from operators and legal professionals varied when asked if the industry should fear or worry additional RICO charges.

Most agreed the still federally illegal industry faced risks for RICO and other federal charges. However, sentiment varied about who should be afraid, noting the importance of compliance and the largely failed track record of RICO charges so far.

“All cannabis companies should fear the potential of federal organized crime-type charges,” said Papa & Barkley CEO Guy Rocourt, noting the ongoing federal laws against cannabis.

Meg Nash, counsel for firm Vicente Sederberg is also concerned about federal law.

“As long as cannabis remains federally illegal, there is always some risk that aggrieved individuals will seek to use the RICO statute as a basis for asserting claims against cannabis brands.”

Nash added that RICO cases against cannabis companies have traditionally not fared well for the Feds, “due to the many elements that comprise the cause of action.”

Recent examples include a California federal judge acquitting a cannabis company on charges of moving products on a shared road in Santa Barbara County, with the judge noting the county failed to demonstrate the harm it experienced.

In May 2020, 226 Orgeon cannabis companies beat racketeering charges filed by a woman claiming that a nextdoor cannabis processor had harmed her in some way in 2018.

Victory for the prosecution comes at a cost as well.

“The reality is federal RICO Act civil suits are very costly to initiate and prosecute and very difficult to win,” said Craig Small senior attorney at Clark Hill’s Denver office. Small said most federal RICO civil suits are dismissed with a small fraction resulting in settlements or judgments against the defense.

legal cannabis marijuana
Photo by matt_benoit/Getty Images

Despite the reported low success rate, RICO charges can damage acquitted parties.

Clark Wu, Esq., an attorney for Bianchi & Brandt, said “cookie-cutter allegations” with focuses on security or nuisance-type charges, like alleged odors, have not fared well in court.

Still, the cost of fighting charges can be staggering, making it a common tool of anti-cannabis movements and individuals. If a company loses their case, it can be on the hook for up to three times the damages. Win, and the company must face expensive legal bills.

Facing expensive outcomes either way, Wu noted that many cannabis brands opt to settle before reaching court.

Mislabeled Cannabis Products

Wu said that the Arkansas case follows similar charges regarding the illegal status of cannabis operations. However, he said “the suit pivots from the traditional angles to attack a trending issue: the inflation of THC claims in cannabis products.”

Mislabeling has been an ongoing issue with various cannabinoids.

In recent years, the CBD space has found itself in the crosshairs of damning studies:

  • A 2017 Penn University analysis of CBD products sold online found fully 70% were mislabeled.
  • In 2022, Johns Hopkins Medicine researchers tested more than 100 OTC CBD products. Only 89 of the products listed CBD potency on the label. Just 24% of products were accurately labeled, with in-store products averaging 21% more CBD than advertised.

From labs to sales shelves, the willingness to misrepresent products appears to stem from a desire to appeal to customers and stay in business.

Roger Brown, president and founder of ACS Laboratory said the sources of mislabeled products come from growers and suppliers seeking labs willing to produce higher THC results. He reports losing “significant business” as companies seek to work with labs providing the most favorable THC and cannabinoid profile results.

Brown pointed to certain state budgets that prevent adequate enforcement.

“The regulators look at the results, chromatograms and data but not how the data is gained or gathered,” he said, adding the status quo breeds contempt for the program’s rules and regulations.

Most professionals Benzinga spoke with indicated they felt that RICO charges were extreme in cases like the four Arkansas operators. However, they believe that some form of punishment is needed to deter any industry long-struggling with mislabeled products.

Marijuana Underage Sales Check Experience A Drop, Concerning Marijuana Regulators
Photo by Megaflopp/Getty Images

Brown feels additional charges will come to brands alleged of knowingly misrepresenting products. Not everyone agreed.

Matthew Morgan, a cannabis industry advisor who has helped co-found several brands, including Ignite International Brands Ltd and Green Axis Capital, views Arkansas as an isolated incident.

“I believe cannabis is very low on the list of priorities for the Federal Government,” said Morgan, noting that regulators “Have much bigger concerns to address.”

No matter the case, Vicente Sederberg’s Nash does not see much of the industry at risk, noting a largely industry-wide compliance to state and federal rules.

“To the extent that any cannabinoid misrepresentation occurs in the cannabis space, it is the exception and not the rule,” said Nash.

Source: https://thefreshtoast.com/cannabusiness/rico-charges-once-reserved-for-the-mafia-now-a-familiar-anti-cannabis-industry-tactic/

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Corruption

Four Ganga Land Leases Cancelled in Sambhal After Record Irregularities

Published

on

By

The Sambhal district administration has cancelled four government land leases issued more than three decades ago after an official investigation found alleged irregularities in the classification and allotment of Ganga river land.

The action follows an inquiry that concluded approximately 31 bigha of land in Surpur village of Gunnour tehsil was leased after its original revenue classification was allegedly altered, allowing land categorized as riverbed to be treated as agricultural property.

Inquiry Reveals Alleged Record Manipulation

The decision was taken by the Additional District Magistrate (ADM) based on an investigation conducted by the Sub-Divisional Magistrate (SDM), Gunnour.

Officials found that while the current revenue records listed the land as transferable agricultural property, older consolidation documents identified it as Category-6(1) submerged river land, making it ineligible for such allotments.

Following the findings, the administration ordered the cancellation of all four leases and directed revenue officials to restore the land’s original classification in official records.

Leases Issued in 1991 Declared Invalid

According to the inquiry, the disputed leases were granted on November 17, 1991, in the names of Shrinivas, Sher Singh, Shakuntala, residents of Surpur village, and Prakash Chandra of Patei Kayasth village.

Authorities stated that the allotments did not comply with the provisions of Section 128 of the Uttar Pradesh Revenue Code, 2006, prompting their cancellation.

Officials said corrective entries are now being made in the revenue records to reflect the land’s original legal status.

Wider Probe Into Ganga Riverbank Land Allotments

The latest action is part of a broader investigation into alleged irregularities involving government land located along the Ganga riverbank in Sambhal district.

Earlier investigations uncovered suspected illegal allotments involving nearly 845 bigha of government land in Sukhailla village under Gram Panchayat Asadpur, where 162 leases are also under scrutiny.

Investigators believe a similar pattern may have been followed in multiple cases, with riverbed land allegedly reclassified as agricultural land before being leased to individuals.

Field inspections reportedly found that much of the land was unsuitable for conventional farming and was instead being used for activities such as sand mining.

Government Land Worth ₹18 Crore Under Review

District officials estimate that approximately 850 bigha (around 71.5 hectares) of government land, valued at nearly ₹18 crore, is currently under investigation.

Authorities have launched a comprehensive review of historical land leases issued across villages situated along the Ganga river in the Rajpura, Gunnour, and Junawai blocks.

The objective is to determine which allotments were made legally and identify cases where land records may have been manipulated.

Officials’ Role Also Being Examined

The investigation has also raised questions about the possible involvement or negligence of officials from the revenue and consolidation departments.

District authorities said responsibility will be fixed after the inquiry is completed, and legal or departmental action will be taken against anyone found to have violated land allotment rules.

Officials indicated that the ongoing review could reveal additional cases involving unauthorized occupation or irregular leasing of government land.

The administration has reiterated its commitment to restoring government property and ensuring transparency in land management across the district.

Continue Reading

Education & Training

NTA Warns NEET UG 2026 Candidates Against Fake OMR Sheets

Published

on

By

The National Testing Agency (NTA) has issued a warning to NEET UG 2026 candidates and their parents against submitting fake, altered, or AI-generated OMR sheets while raising objections related to examination results.

The examination authority said that candidates found providing fabricated documents or misleading information during the verification process could face legal consequences.

The warning comes after several students approached the agency with complaints alleging discrepancies between their expected scores and the marks published in the final results.

NTA Finds Suspicious Documents During Verification

According to the NTA, some candidates submitted OMR sheets while requesting score verification, but officials found that certain documents appeared to be manipulated or artificially generated.

The agency clarified that only original OMR sheets issued during the examination process will be accepted for reviewing complaints.

NTA officials said they are examining all grievances carefully and will consider only verified examination records while deciding on score-related concerns.

Students Raise Questions Over NEET UG Results

After the announcement of NEET UG 2026 results, several candidates reported differences between their estimated marks based on the official answer key and their final scorecards.

Some students claimed that their expected scores were significantly higher than the marks awarded in the results.

In some reported cases, candidates alleged that uploaded OMR sheets did not match their original answer sheets or that the displayed scores were inconsistent with their calculations.

The complaints prompted several students and parents to seek clarification and request a detailed review of the evaluation process.

AI-Generated Fake Records Create New Challenge

The NTA has highlighted the growing misuse of artificial intelligence tools to create fake examination documents.

Officials said digitally altered OMR sheets and fabricated records could create difficulties in identifying genuine grievances and may affect the integrity of the complaint resolution system.

The agency advised candidates to avoid using unofficial documents or modified materials while submitting objections.

Candidates found involved in producing false evidence may face action under applicable laws, the NTA warned.

NEET UG 2026 Conducted Again After Paper Leak Allegations

The NEET UG 2026 examination process faced controversy after allegations of a paper leak led authorities to cancel the original exam held on May 3.

A re-examination was conducted on June 21 for affected candidates, following which results were announced on July 16.

After the controversy, the government announced plans to move future NEET UG examinations from the traditional pen-and-paper format to a computer-based testing (CBT) system.

Verification Process Continues

The NTA said the review of complaints submitted by candidates is still underway and further decisions will be taken after completing the verification of all documents.

The agency has urged students to rely only on official communication channels and submit genuine records while seeking clarification about their results.

Continue Reading

Corruption & Governance

Goa PWD Tenders Worth ₹1,000 Crore Come Under Government Probe

Published

on

By

The Goa government has initiated a detailed investigation into alleged irregularities in Public Works Department (PWD) tenders worth nearly ₹1,000 crore, following complaints of document manipulation and misuse of contractor eligibility credentials.

The probe focuses on claims that certain construction firms may have secured high-value infrastructure contracts by submitting falsified or altered work completion certificates to qualify for top contractor categories.

Allegations of Fake Experience Certificates in Tender Bids

According to complaints filed by engineers and contractors, several companies allegedly used questionable documentation to obtain Class IAA contractor status, a designation that allows participation in large-scale government infrastructure projects.

Investigators are examining whether manipulated work completion certificates were used to falsely demonstrate prior project experience, thereby inflating eligibility during the tender evaluation process.

One of the key concerns involves references to infrastructure projects executed under Karnataka Neeravari Nigam Limited, including the “Mudi Tank Filling Scheme.” Authorities are verifying claims that duplicate or inconsistent completion certificates may have been issued for the same project.

JV Structure Alteration Under Scrutiny

Officials are also investigating alleged changes in joint venture (JV) agreements submitted during tender applications. In one case under review, a 2019 JV reportedly listed Amrita Constructions Private Limited as the lead partner, with another firm as a supporting entity.

However, documents submitted to Goa PWD allegedly reversed these roles, naming Bagkiya Constructions as the lead partner. This change is suspected to have significantly enhanced the company’s technical eligibility and past performance record.

Authorities believe such alterations may have allowed firms to qualify for contracts they would otherwise not have been eligible for under standard procurement norms.

Allegations Linked to Karnataka Project Documentation

Another complaint under review concerns the “Akka Mahadevi Memorial Project” in Shivamogga, Karnataka, valued at over ₹51 crore. It is alleged that the project, executed in phases, was incorrectly represented as a single completed contract to meet eligibility requirements for higher-value tenders.

Investigators are verifying whether such representations were used to gain unfair advantage in experience-based qualification criteria.

Government Launches Comprehensive Inquiry

Following the emergence of these allegations, the Goa government has ordered a preliminary inquiry into all related contracts, approvals, and supporting documentation.

Officials have stated that every stage of the tendering process—including eligibility checks, certificate validation, and contract award decisions—will be examined in detail.

If irregularities are established, possible actions may include contract cancellation, blacklisting of firms, recovery of funds, and legal proceedings against those involved in submitting false documentation.

Concerns Over Procurement Transparency

The case has raised broader concerns about transparency and verification systems in public infrastructure procurement. Experts point out that reliance on manual documentation without robust digital verification increases the risk of fraud in large-scale government contracting.

Transparency advocates have called for stronger auditing systems, centralized contractor databases, and real-time verification of project credentials to prevent misuse of public tender processes.

Probe Continues

Authorities have confirmed that the investigation is ongoing and a detailed report will be prepared after reviewing all evidence and documentation. Further action will be taken based on the findings in accordance with applicable laws and procurement rules.

Continue Reading

Trending

Copyright © 2022 420 Reports Marijuana News & Information Website | Reefer News | Cannabis News