Federal authorities have seized nearly $250,000 from the accounts of two Sacramento area dispensaries in a probe into alleged concealment of medical marijuana proceeds.
U.S. Magistrate Gregory G. Hollows approved two warrants Sept. 22, allowing authorities to seize business checking accounts from operators of the One Love Wellness Center dispensary in Sacramento and Mary Jane’s Wellness in Gold River.
The warrants, sought by a U.S. Treasury Department criminal task force, alleged the two dispensaries may have violated U.S. financial laws through irregular banking deposits to avoid detection by the Internal Revenue Service.
Banks and other financial institutions are required to notify the IRS of any deposit of $10,000 or more.
But two warrants sought by Heidi Gutierrez, a U.S. Treasury task force officer for the IRS criminal investigation division, alleged that the dispensary operators bundled deposits into smaller amounts to avoid detection.
Mark Reichel, an attorney for the two dispensary operators, said the deposits “were likely routine so they can write checks for employees and for security and for the IRS.”
“They were not intending to avoid the IRS reporting law,” he said.
No criminal charges have been filed in the case.
The account seizures follow recent federal charges of conspiracy and illegal marijuana sales against five people associated with another Sacramento dispensary, the R & R Wellness Collective.
In the latest case, investigator Gutierrez said federal banking officials were notified of suspicious transactions by SAFE Credit Union, which held separate accounts for the two dispensaries.
In her affidavit filed to seize $145,162 from the account of MJ’S Wellness Inc., Gutierrez said the operator of the Gold River dispensary made deposits of $118,375 over 21 consecutive days and another $26,786 over three days.
She alleged that River City Cooperative Corp., which runs One Love Wellness, made 19 deposits – $102,713 in total – into two accounts in a structuring scheme to keep deposits under $10,000.
“It’s a federal offense to structure money to avoid the reporting requirement,” said Donald Heller, a Sacramento lawyer and former federal prosecutor.
Heller said violations of federal structuring laws can carry penalties of up to 10 years in prison, plus forfeiture of financial accounts.
He said the account seizures may signal that federal authorities are looking for illegal profiteering by dispensaries, which are required to operate as nonprofits under state law. Deposit records “may provide some evidence down the road in criminal prosecution,” he said.
– Article originally from The Sacramento Bee.