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Legal Pot Business Owner Sentenced for Federal Tax Crimes

A part-owner and operator of medical marijuana dispensaries in Oregon was sentenced to seven years in prison Monday, marking what a prosecutor called the country's first federal sentencing of a legal pot business owner for tax crimes.

Posted: Sep 17, 2018 4:12 PM
Updated: Sep 17, 2018 4:24 PM

PORTLAND, Ore. (AP) — A part-owner and operator of medical marijuana dispensaries in Oregon was sentenced to seven months in prison Monday, marking what a prosecutor called the country's first federal sentencing of a legal pot business owner for tax crimes.

Matthew Price also was ordered to pay $262,776 restitution to the Internal Revenue Service during sentencing in federal court in Portland, the Oregonian/OregonLive reported .

Price, 32, pleaded guilty to four counts of willfully failing to file income tax returns in connection with his Cannabliss stores in Portland and Eugene. Price admitted that he didn't file individual tax returns from 2011 through 2014 for income received from the operation of the dispensaries.

An investigation into Price started after the IRS discovered he hadn't paid employment taxes for his employees.

Price failed to report nearly $1 million of income and disregarded advice from three different certified public accountants who warned him not to use his business money to pay personal expenses, Assistant U.S. Attorney Seth Uram said. Price did anyway, spending $67,000 in cash on a sports car, $15,000 in cash on a Rolex watch, and other income on vacations, homes and season tickets to the Portland Trailblazers, Uram said.

Price's defense lawyer, Whitney Boise, had urged probation for Price, saying he has no prior criminal record, has accepted responsibility, has nearly paid off the restitution and already has suffered. Price wasn't sure what could or couldn't be deducted from his taxable income, was unorganized and wasn't comfortable with the advice he received from his accountants, Boise said.

U.S. District Judge Michael W. Mosman said he didn't fully accept the defense's explanation that Price didn't comprehend his tax obligations.

"It's true you didn't walk into this with an MBA," Mosman said. But it's also clear Price has the intelligence to understand "one of the most basic obligations of running a business," the judge said.

Price, who apologized in court, must turn himself in on Nov. 1.

Whether he'll be able to continue in his marijuana business until then, or after prison, will be decided at a hearing Friday. The matter arises because use or sale of marijuana remains prohibited under federal law and is a standard prohibition during federal supervision.

There was a tax-related prosecution 12 years ago in Detroit of a "back-door'''-type marijuana dispensary, but not a legal business such as the one Price ran, Uram said.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 394569

Reported Deaths: 5243
CountyCasesDeaths
Multnomah60720847
Washington42359405
Marion40153516
Clackamas33040387
Lane30428361
Jackson25105363
Deschutes23795189
Umatilla15144184
Linn14859183
Douglas13523293
Josephine10278247
Yamhill9840143
Klamath9112149
Polk8325102
Benton615338
Malheur593292
Coos5768109
Columbia438056
Jefferson424366
Lincoln365852
Crook343057
Union340756
Wasco318646
Clatsop263635
Baker221833
Tillamook218046
Hood River216537
Morrow197825
Curry193939
Harney121333
Grant109116
Lake105617
Wallowa76313
Sherman1933
Gilliam1854
Wheeler1141
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 5107717

Reported Deaths: 74800
CountyCasesDeaths
Los Angeles153472027244
San Diego4091824350
Riverside3892365381
San Bernardino3762805983
Orange3352965756
Sacramento1690952452
Kern1582701828
Fresno1574692270
Santa Clara1528571928
Alameda1256281512
San Joaquin1080791835
Ventura1043091192
Contra Costa1042181056
Stanislaus919641429
Tulare867391100
San Francisco57141674
San Mateo56585631
Monterey52842626
Solano47828360
Santa Barbara47523555
Merced45309671
Sonoma43349414
Placer42458473
Imperial38932776
Kings35370367
San Luis Obispo31667360
Madera26388311
Shasta26221461
Butte25608318
Santa Cruz22402224
Yolo21722261
Marin18587249
El Dorado18448168
Sutter14646186
Napa13446106
Yuba1079891
Tehama10316131
Humboldt10294119
Nevada10112105
Mendocino864999
Lassen797656
San Benito787979
Tuolumne778491
Lake7057113
Amador580067
Siskiyou479657
Glenn458536
Calaveras445788
Del Norte377942
Colusa328321
Inyo257346
Plumas19577
Mono19034
Mariposa162218
Trinity100717
Modoc7936
Sierra2190
Unassigned1560
Alpine1080
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