SEVERE WX : Air Stagnation Advisory View Alerts

Nine Charged in Oregon for Far-Reaching Fraud, Pot Plot

The scheme involved defrauding banks, using the money to start illegal marijuana grow houses, then funding an interstate pot distribution ring, according to court documents filed Tuesday.

Posted: Jun 12, 2018 5:45 PM

GILLIAN FLACCUS , Associated Press

PORTLAND, Ore. (AP) — Oregon's top federal prosecutor has charged nine people with financial and drug crimes in a scheme that involved defrauding banks and using the money to start illegal marijuana grow houses and fund an interstate pot distribution ring, according to court documents filed Tuesday.

The case is the first involving marijuana-related charges prosecuted by U.S. Attorney Billy Williams since he issued a memo criticizing Oregon's pot surplus and called on state regulators to get a better handle on the amount of the drug flowing across state lines.

Williams was the first U.S. attorney to publicly outline his strategy for federal marijuana enforcement after Attorney General Jeff Sessions rolled back Obama-era protections for states with legal pot. Oregon is one of about 30 states that have legalized marijuana in some form, creating a two-tier enforcement system at the state and federal levels.

The current case began as a major fraud investigation and grew into a drug probe that stretched into California and Illinois, federal prosecutors said in a complaint filed in U.S. District Court in Eugene. Three of the defendants have been arrested and the rest are at large.

The money also funded a state-licensed marijuana store in Corvallis, Oregon, where excess pot was surreptitiously packed, vacuum-sealed and shipped out of state in suitcases and by mail, prosecutors alleged. That store, Corvallis Cannabis Club, was raided by the U.S. Drug Enforcement Agency on Tuesday. No one answered the phone at the store on Tuesday.

Those arrested will make a first court appearance Wednesday in Eugene, Oregon. Defense attorneys were not listed in court filings and it was not immediately known if they had retained private attorneys or will be assigned a federal public defender.

According to a probable cause affidavit from FBI Special Agent Jeff Schiltz, federal authorities began investigating a credit card fraud scheme in 2016.

The scheme involved getting Armenians in Hollywood, California, who were struggling financially to provide the defendants with their personal information in exchange for payment. The defendants would then open credit cards in their name.

The defendants used the cards and made initial payments on the balances using fraudulent bank accounts, but then told the banks the accounts were bogus.

The credit card companies then repaid the banks and the cards weren't used again.

At one point, some defendants drove 60 pounds (27 kilograms) of marijuana to Chicago and sold it on the black market. Other marijuana was sold and sent to California and still more was sent to Peoria, Illinois, where state authorities were already conducting an undercover investigation, court papers say.

The defendants deposited tens of thousands in cash from the out-of-state marijuana sales in many different bank accounts in Oregon and California, prosecutors said.

____

Flaccus is a member of AP's marijuana beat team. Follow her at www.twitter.com/gflaccus. Follow AP's complete marijuana coverage: https://apnews.com/tag/LegalMarijuana

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 70832

Reported Deaths: 885
CountyCasesDeaths
Multnomah15875232
Washington997499
Marion9017137
Clackamas585377
Umatilla430149
Lane420241
Jackson364428
Malheur237942
Deschutes222814
Yamhill164816
Linn138522
Polk116816
Douglas91217
Jefferson80811
Union7715
Benton7667
Klamath7604
Morrow6517
Lincoln61315
Wasco51919
Josephine5104
Columbia4783
Coos4182
Hood River3941
Clatsop3510
Baker2723
Crook2176
Grant1341
Curry1292
Tillamook1230
Lake1171
Harney961
Wallowa713
Sherman230
Gilliam220
Wheeler30
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 1185576

Reported Deaths: 19089
CountyCasesDeaths
Los Angeles3877937604
San Bernardino902221129
Riverside857741437
San Diego76359996
Orange750951577
Kern40337448
Fresno37724481
Sacramento35854566
Santa Clara32985476
Alameda28857505
San Joaquin25738502
Contra Costa23571261
Stanislaus21460424
Tulare20649308
Ventura19058175
Imperial15862356
San Francisco15156160
Monterey14750116
San Mateo13715170
Sonoma11922157
Merced11537179
Santa Barbara11277135
Kings1047587
Solano1003681
Marin7628129
Placer635468
Madera604785
San Luis Obispo596435
Shasta471847
Yolo462675
Santa Cruz426928
Butte389459
Sutter314415
Napa298817
El Dorado22174
Yuba198110
San Benito183716
Lassen17733
Tehama161225
Mendocino148522
Nevada11849
Tuolumne9088
Glenn8928
Lake89019
Humboldt8509
Colusa6946
Siskiyou6242
Mono5273
Amador52016
Calaveras47822
Del Norte3131
Inyo29016
Plumas2050
Trinity1390
Mariposa1282
Modoc1250
Alpine470
Sierra190
Unassigned00
Medford
Overcast
32° wxIcon
Hi: 50° Lo: 30°
Feels Like: 32°
Brookings
Clear
36° wxIcon
Hi: 56° Lo: 40°
Feels Like: 36°
Crater Lake
Clear
17° wxIcon
Hi: 42° Lo: 22°
Feels Like: 17°
Grants Pass
Overcast
32° wxIcon
Hi: 50° Lo: 30°
Feels Like: 32°
Klamath Falls
Clear
17° wxIcon
Hi: 43° Lo: 19°
Feels Like: 17°
Dense, freezing fog tonight
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events