Killa Beez wants his money back from Left Coast Financial Services

Oregon-based cannabis company Killa Beez wants the $127,000 it deposited with cannabis bank Left Coast Financial Services — and is now dragging the company’s executives into the lawsuit to collect it.

But executives fight back: One said he wasn’t responsible despite being a founder – suggesting that founders have no legal standing.

Left Coast Financial Services

Oregon-based Left Coast (LCFS) is described as a licensed money transmitter and not a bank. The company marketed itself as a neobank — meaning it had no physical location — but served as an online payment platform for cannabis companies.

Neobanks are not approved by the Federal Office of the Comptroller of the Currency and do not have banking licenses. They are considered fintech companies and often work with traditional banks.

Killa Beez and Kevin Wong, a company executive, said they deposited $126,994.02 into LFCS in February 2022. In November 2022, Wong told LFCS that he planned to withdraw, but the $30,000 check was returned due to insufficient funds to complain.

Wong then called Casey Nye-Harrington and Daniel Herrington of LFCS to tell them what happened and asked the company to reissue the check. The second check also bounced.

When Wong tried to contact the Herringtons about the second bounced check, they told him they were no longer with LFCS. The two resigned and returned all of their ownership interests to the company. Killa Beez then attempted to write a check to Eagle Valley Farms, one of his suppliers, as payment for a purchase. This check was also returned due to insufficient funds.

Wong and Killa Beez said their funds remain inaccessible.

The cannabis company is suing LFCS, Nye-Harrington, Herrington and Nicholas Rupp, one of the bank’s founders, among others.

Rupp denies responsibility

In a motion filed this week, Rupp asked that the case be dismissed, claiming that he was not personally liable simply because he was a founder and director of LFCS.

“First, it is not clear what it means to be a ‘founder’ of the complaint or what its legal significance is,” the motion states.

Rupp said he had no interactions with Killa Beez or Wong, meaning he has no personal liability in this case. He also claimed that Killa Beez’s contract was with the company and not with anyone affiliated with it.

In addition, Rupp said that he did not enrich himself from the missing money, as Killa Beez claims, and that the company he co-founded had no responsibility for the deposits.

The case states: “A relationship between a ‘depositor’ and a company that purportedly held those deposits is not a special relationship.”

Instead, Rupp described the relationship as one between a debtor and a creditor. Rupp also argued that there was no fraud or RICO (Racketeer Influenced and Corrupt Organizations Act) activity because Killa Beez did not exhibit a pattern of bad behavior.

Rupp further claimed that after the funds were frozen, he intervened to bring the company back into compliance with permitting authorities and repay the deposits. He claimed that City Trust Bank had the money and would not return it despite his efforts. City Trust is not included in the complaint.

The Portland Business Journal reported in 2023 that regulators had suspended Left Coast Financial Solutions and that hundreds of thousands of dollars were unaccounted for.

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