Feds Seize Bank Accounts Of Marijuana Dispensaries: $250K


The Sacramento Bee
Happier times: Lito Catabran, 62, in front of One Love Wellness Center in Sacramento in August. Catabran, a former RV salesman, had hoped to retire soon.

​In what appears to be an escalation of the U.S. government effort to stamp out medical marijuana, federal authorities have seized almost $250,000 from the accounts of two Sacramento area dispensaries in an investigation of alleged concealment of cannabis profits.

U.S. Magistrate Gregory G. Hollows approved two warrants on September 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, reports Peter Hecht at the Sacramento Bee.

The warrants were requested by a U.S. Treasury Department criminal task force. They allege that the two dispensaries may have violated U.S. financial laws through irregular banking deposits to avoid detection by the Internal Revenue Service (IRS).

Banks and other financial institutions are required to notify the IRS of any deposits totaling $10,000 or more.

Mary Jane’s Wellness was one of the two Sacramento dispensaries whose bank accounts were seized by the IRS

​The dispensary operators allegedly bundled deposits into smaller amounts to avoid detection, according to two warrants sought by Heidi Gutierrez, a U.S. Treasury task force officer for the IRS criminal investigation division.
The deposits “were likely routine so they can write checks for employees and for security and for the IRS,” said Mark Reichel, an attorney for the two dispensary operators. “They were not intending to avoid the IRS reporting law.”
Investigator Gutierrez claimed that federal banking officials were notified of “suspicious transactions” by SAFE Credit Union (to its eternal shame), which held separate accounts for the two dispensaries.
In her affidavit filed to seize $145,162 from the account of Mary Jane’s Wellness Inc., Gutierrez claimed the operator of the dispensary made deposits of $118,375 over 21 consecutive days and another $26,786 over three days.
Gutierrez claimed that River City Cooperative Corporation, which owns One Love Wellness, made 19 deposits totaling $102,713 into two accounts in a structuring scheme to keep deposits under the triggering amount of $10,000.
“It’s a federal offense to structure money to avoid the reporting requirement,” said Donald Heller, a Sacramento attorney and former federal prosecutor. He said violations of federal structuring laws can result in prison sentences of up to 10 years, plus forfeiture of bank accounts.
Federal authorities may be looking for illegal profiteering by the dispensaries, according to Heller. The shops are required to operate as nonprofits under California law.
Deposit records “may provide some evidence down the road for criminal prosecution,” Heller said.
No criminal charges have been filed in the case.
Seizure of the accounts appears to be part of a disconcerting pattern, following recent federal charges of conspiracy and illegal marijuana sales against five people with R&R Wellness Collective, another Sacramento dispensary.