A Michigan resident, Ryan Richmond, has been convicted in a Detroit federal court for evading federal income taxes and obstructing the IRS, along with other offenses.
The evidence and court records revealed that Richmond, from Bloomfield, was the owner of the marijuana dispensary, Relief Choices, LLC, located in Warren, Michigan. Between 2011 and 2014, Richmond primarily used cash for the dispensary's operations. He also funneled customer credit card transactions through an unrelated third-party bank account, obscuring his true business earnings. During 2015 and 2016, Richmond misled IRS officials, notably an IRS auditor assessing his personal taxes. His deceptive practices resulted in over $1.15 million in tax losses to the IRS.
The sentencing for Richmond is set for December 13th. He could face up to five years in prison for each tax evasion charge, three years for obstructing the IRS, and one year for the intentional failure to file a tax return. Additionally, Richmond may be subjected to supervised release, restitution, and other financial penalties. The final sentencing will be decided by a federal district court judge, taking into account the U.S. Sentencing Guidelines and related statutory considerations.
The announcement came from Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department's Tax Division. The IRS Criminal Investigation division handled the probe, with Trial Attorneys Mark McDonald and Christopher P. O'Donnell from the Tax Division leading the prosecution.
The owner of Greenhouse of Walled Lake, a dispensary in Michigan, Jerry Millen, has expressed increasing concern over the prevalence of counterfeit money being used at his establishment. Over the recent months, he has reported significant losses amounting to hundreds of dollars every week due to fake currency transactions.
"In the past, we've occasionally encountered counterfeit bills, but the situation has escalated dramatically in the last two to three months," explains Millen. This surge in counterfeit currency usage has posed a significant financial threat to businesses like his.
An underlying issue compounding the problem is that, due to the federal prohibition of cannabis, Michigan-licensed cannabis dispensaries are barred from accepting credit card payments. As a result, they are more susceptible to counterfeit currency exchanges.
Richard Convertino, a former federal prosecutor, sheds light on the severity of counterfeiting. "The U.S. government classifies counterfeiting as an act tantamount to warfare," he notes. Convertino further explains that while counterfeit bills can sometimes be quite convincing, especially during a busy business day, there are certain indicators that can help identify them. The texture of the money is often the most telling sign. "Genuine currency has a distinct feel due to its cotton and linen blend. It's not just regular paper. If something about the bill feels off, there's a high likelihood that it's counterfeit," advises Convertino.
For Millen, the ultimate solution to this growing concern is clear: federal legalization of cannabis. He argues that it's contradictory for businesses like his to dutifully pay taxes and contribute positively to the community, yet only be permitted to accept cash, leaving them vulnerable to counterfeit operations. "We're responsible citizens, diligently paying our taxes. But the irony is, we're restricted to cash transactions which expose us to such frauds," Millen points out. "A move towards federal legalization would not only resolve this counterfeit issue but would also validate the cannabis industry as legitimate."
It's also crucial to note that Michigan's legal framework has stringent penalties for those caught in possession of counterfeit money with the intent to use. Such offenses may lead to a felony charge, potentially resulting in up to five years of imprisonment or hefty fines. This serves as a stark reminder of the legal implications surrounding counterfeit currency and the broader issues facing the cannabis industry in the region.
The once-feared "kingpins" of yesteryears are now legally armed investors. While they've traded bullets for lawsuits, the financial stakes remain high.
In Menominee, a quaint city nestled by the northwestern shores of Lake Michigan, allegations of murky ethics, clandestine dealings, and potential conflicts of interest are rife.
Although the Menominee cannabis market doesn't seem too promising at first glance, it's pegged to be worth tens of millions. The high demand isn't primarily driven by the city's residents but by its proximity to Wisconsin, which hasn't legalized the retail sale of recreational cannabis and might not for a few years.
This strategic location has fueled a booming cross-border cannabis business.
Michigan places no cap on the number of cannabis businesses within its communities. Local governments or voter initiatives shape the licensing processes. Many Michigan regions have enacted bans on cannabis enterprises. However, Menominee reversed its stance in October 2020, launching a scoring system for applicants and paving the way for two recreational cannabis stores.
Among the 14 applicants, Rize (operating under First Property Holdings) and the Fire Station clinched the licenses. Those unsuccessful alleged the selection was biased and subsequently sued Menominee.
These companies, including prominent names like Lume, Higher Love, and Green Pharm, found their efforts thwarted in court. Yet, they weren't done.
Before the legal tussle concluded, these cannabis companies proposed a settlement to the city council. They offered to withdraw the lawsuits in exchange for business licenses. The council passed the settlement, 6-3, after the court's decision, leading to another lawsuit alleging conspiracy between Menominee politicians and certain cannabis firms.
Councilwoman Marineau, among the dissenters, remains perplexed over the council's insistence on issuing licenses to companies that previously sued.
The lawsuit points to potential ethics violations. It claims some cannabis company lawyers, notably from OI Holdings, had undue communications with council members who later backed their settlement. A notable link exists between an attorney from OI Holdings and Councilman Josh Jones, brothers. While this potential conflict was declared, it wasn't deemed problematic by the council.
The council's decisions did not go unchallenged. Menominee residents, spearheaded by Adam Michaud, sought to bring the matter before voters. Yet, maneuvers by the city council appear to have sidelined this initiative, sparking another legal challenge alleging a violation of the Open Meetings Act.
Commenting on the ongoing saga, John Chamberlain, a former ethics professor at the University of Michigan, expressed shock. He underscored the importance of transparency, echoing Justice Brandeis's sentiment that "sunshine is the best disinfectant."
While legal maneuvers dominate the current landscape, Chamberlain feels that the essence of democracy and ethical governance shouldn't be lost amidst the legalities.
In the early hours of Friday, September 1st, Southfield police responded to a break-in at Lume Cannabis Recreational Dispensary located at 26760 Lahser Road. Arriving at approximately 2:33 a.m., officers found the establishment's front door open, propped with a wooden stool. As they approached, four individuals sped away in a silver Hyundai, previously reported stolen from Royal Oak on the evening of August 31st.
Engaging in a high-speed chase, the suspects, traveling at over 100 mph on Interstate 696, began discarding stolen goods from the vehicle. The pursuit concluded near Mound Road in Warren, where the suspects made a dangerous attempt to drive south in the northbound lanes. Officers utilized a precision immobilization technique (PIT) maneuver, causing the vehicle to stop. While two suspects remained with the car, two others fled on foot but were quickly detained.
The Southfield police department suspects this group might be linked to several recent break-ins at marijuana dispensaries in Center Line and other neighboring cities.
Southfield Police Chief Elvin Barren addressed the issue: "Southeast Michigan is currently grappling with a surge in car thefts and smash-and-grab incidents. This latest incident in Southfield stands as a clear message. Culprits should think twice before committing crimes here; our officers will pursue and employ all necessary techniques to ensure justice."
The identities of the suspects were withheld at the time of the report. However, their backgrounds shed light on their histories:
The driver, a 21-year-old from Detroit, has prior charges for felony weapons, controlled substance, felony resisting, and obstruction, along with several warrants. Police are now recommending charges for fleeing and eluding, breaking and entering, and driving without a license.
The front-seat passenger, a 27-year-old from Detroit, has a record of felony firearm offenses. He is currently facing charges of breaking and entering, and resisting and obstructing.
One of the rear passengers, aged 20 from Detroit, has no prior offenses but now faces charges for breaking and entering.
The other rear passenger, a 29-year-old from Detroit currently on probation for assault, has a history of carjacking, armed robbery, concealed weapon offenses, felony theft, and multiple warrants, including one for probation violation. The police are now seeking to charge him with breaking and entering and resisting and obstructing.
John Dawood Dalaly, an entrepreneur from West Bloomfield Township, faces potential federal prison time for his involvement in a bribery scheme with Rick Johnson, the former head of Michigan's medical marijuana licensing board. The controversy is the most significant public corruption incident in the Michigan Capitol in three decades.
Dalaly's legal counsel, Raymond Cassar, expressed in recent federal court documents that his client deeply regrets his choices and should be considered for a lenient sentence. Dalaly's health issues, including coronary disease, were cited as factors warranting a reduced sentence.
Dalaly's collaboration with federal investigators and his remorse were emphasized by Cassar, stating, "Mr. Dalaly has consistently cooperated and was prompt to admit his guilt. The repercussions of his actions, especially on his family, weigh heavily on him."
For his involvement in the bribery scheme, Dalaly is set to be sentenced on September 14th by U.S. District Judge Jane Beckering. Prosecutors highlight that Dalaly paid bribes amounting to $68,200 to Johnson in return for medical marijuana licenses.
However, Cassar counters, "John Dalaly's story is a reminder that even good individuals can make grave errors."
Dalaly had entered a guilty plea in April. This followed shortly after charges were announced against him, lobbyists Brian Pierce, Vincent Brown, and Johnson. All parties have now made plea agreements with the authorities and are set for sentencing this month.
Dalaly, aged 71, had earlier agreed to plead guilty to bribing Johnson. The maximum penalty is ten years in prison, a $250,000 fine, and three years of supervised release.
It is noted that Dalaly initiated payments to Johnson in 2018 to secure licenses for a medical marijuana venture and aid in launching a digital payment platform for marijuana transactions. Johnson's wife was also hired by Dalaly at a consulting rate of $4,000 per month.
Cassar added, "John did not have a meticulous plan to bribe Rick Johnson. He acknowledges the glaring 'red flags' in hiring Johnson's wife, even if Rick Johnson justified it as legal."
The defense also took issue with the calculated amount of the bribe and the potential sentencing calculations, suggesting a lower figure and highlighting that Johnson was but one of five board members.
Cassar paints a vivid picture of Dalaly as a dedicated, charitable individual who immigrated from Iraq and is a devoted father and grandfather. One touching moment shared was a conversation between Dalaly and his granddaughter where he admitted to her, "Papa did business with a bad guy."
Cassar concludes, "John confronts the repercussions of his actions daily, especially when witnessing its impact on his family."
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