A man who reportedly ran nine medical marijuana dispensaries in Los Angeles and Orange counties has pleaded guilty to federal charges that will have him serving up to life in prison.
Our Los Angeles medical marijuana lawyers understand that the 56-year-old defendant has pleaded guilty to tax evasion and drug trafficking – specifically, conspiracy to distribute more than a ton of marijuana.
This case has been one of many in which California dispensary owners have been targeted by federal authorities and prosecuted on criminal charges. We first wrote about this case in our Los Angeles Marijuana Lawyer Blog back in November.
This individual was among more than a dozen indicted by a federal grand jury last fall.
The investigation had involved not only the Drug Enforcement Administration’s federal agents, but also detectives employed by the Orange County Sheriff’s Office.
He is accused of profiting some $25 million during the course of his operations, with federal officials noting that this man kept $500,000 in cash inside his home. As part of the plea deal, he is forfeiting that, as well as millions of dollars in assets.
The dispensaries he is accused of operating and illegally profiting from are:
- APCC in San Juan Capistrano;
- The Whittier Collective in Whittier;
- Costa Mesa Patients’ Association in Costa Mesa;
- Santa Fe Compassionate Health Care in Santa Fe Springs;
- Belmont Shore Natural Care in Long Beach;
- Santa Ana Superior Care in Santa Ana;
- Garden Grove Alternative Care in Garden Grove;
- Safe Harbor Collective in Dana Point;
- Alternative Health in Long Beach.
As part of the deal, the defendant reportedly admitted that he had instructed his employees to shred documentation that would have revealed income earned from marijuana sales at these locations.
In California, marijuana is not supposed to be a profit-based business. It is a health care service, and operations are supposed to be organized in a way that is patient-focused, rather than profit-focused.
This defendant admitted to investigators that in one year, he earned about $11.5 million, and yet he reported an income of just $200,000 to the Internal Revenue Service. For that year alone, the defendant owes the IRS some $950,000. From 2006 to 2011, he owes some $2.5 million in back taxes, plus nearly $2 million in restitution.
With two prior felony drug trafficking convictions from state court, federal authorities were already going to be examining his operations more closely. These priors also mean that his sentence is enhanced, particularly because he was found in possession of ammunition and four firearms – including a weapon similar to an AK-47 assault rifle.
All of this means that he could be serving the rest of his life in prison. He faces a minimum of 10 years behind bars. Sentencing will take place in late July.
The rest of the defendants involved in this case are expected to face trial in the fall – that is if they don’t negotiate plea deals prior to their next day in court.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.
Owner of marijuana stores pleads guilty to $25-million scheme, April 1, 2013, By Richard Winton, The Los Angeles Times
More Blog Entries:
Medical Marijuana Dispensary Bans Heard in Courts Across Country, April 15, 2013, Los Angeles Marijuana Lawyer Blog