Feds Seize 100 NorCal Residential Pot Grow Houses

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Federal and local law enforcement officials said this week they have seized around 100 Northern California houses they say were being used to grow cannabis tied to criminal organizations based in China.

The raids conducted Tuesday and Wednesday focused on Chinese nationals living in other states who bought homes in seven California counties, the Associated Press reported. Most of the home buyers were legal residents of the United States. They lived as far away as Georgia, Illinois, New York, Ohio and Pennsylvania. The harvested and processed product was shipped back east to those states for distribution.

None of the home owners have been arrested yet. The U.S. Department of Justice called the bust one of the nation’s largest residential forfeiture seizures. None of the homes were in the San Francisco Bay Area, presumably because it’s cheaper to buy a home more inland, the AP report said.

“This criminal organization has put a tremendous amount of equity into these homes through these wire transfers coming in from China and elsewhere,” U.S. Attorney McGregor Scott said in an interview with AP. “We’re going to take it. We’re going to take the houses. We’re going to take the equity.”

More details from the AP:

  • More than 500 law enforcement officials were used in the raids, which also hit two real estate businesses in Sacramento.
  • Agents from the Internal Revenue Service, the Drug Enforcement Agency and the Federal Bureau of Investigation were deployed with Sacramento sheriff deputies.
  • Money for home down payments were wired from China’s Fujian Province and stayed below the $50,000 limit restrictions in that country.
  • Sacramento real estate agents were used as well as straw buyers who represented the homeowners.

The Justice Department said the houses tended to use very high amounts of electricity for grow lights and fans. It’s no wonder the sweep was dubbed “Operation Lights Out.”

It said in addition to the homes, agents hauled in 61,000 marijuana plants, 400 pounds of processed buds (worth $600,000 wholesale) and 15 guns.

Worries about competition from a thriving black market in the state have continued to increase since California legalized recreational, retail cannabis and started taxing it at high rates last January.

A report earlier this week found that state and federal taxes on legal cannabis are so high in California that they may be helping the black market thrive, as consumers look for cheaper sources for cannabis and retail businesses scramble to keep in line with regulations while still making a profit.

By Riley McDermid | San Francisco Times

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