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Miles City medical marijuana family sentenced to prison terms

2012-04-20T00:00:00Z Miles City medical marijuana family sentenced to prison termsThe Associated Press The Associated Press
April 20, 2012 12:00 am  • 

A judge Thursday sentenced three members of a Miles City family of medical marijuana providers to prison after they pleaded guilty to drug charges following a federal crackdown on Montana medical pot operators last year.

Richard Flor, his wife Sherry and their son Justin ran a medical marijuana operation out of their home and from a Billings dispensary. Richard Flor was a co-owner of Montana Cannabis, one of the state’s largest medical pot operations and a target in the March 2011 raids by federal agents on marijuana providers across Montana.

The raids targeted large-scale medical marijuana operations, casting a pall on a once-booming industry while the providers argued that they were in compliance with state law. The U.S. Attorney’s Office, citing a ruling by U.S. District Judge Donald Molloy in another case, said when a state medical marijuana law conflicts with the federal Controlled Substances Act, the federal law prohibiting the manufacture and distribution of marijuana prevails.

More than 25 people have been indicted as a result of those raids and 12 people have been sentenced so far, the U.S. Attorney’s Office said in a statement Thursday.

After a five-hour hearing that included emotional testimony from Richard and Sherry Flor’s daughter, U.S. District Judge Charles Lovell passed down the harshest sentences related to those raids.

Lovell sentenced Richard Flor to five years imprisonment on a charge that he maintained a drug-involved premises. Flor, 68, suffers from numerous ailments, and Lovell recommended that he be evaluated by federal prison hospital officials to determine what facility would best suit him.

Sherry Flor was the bookkeeper for the family’s Miles City operation and tended the plants growing in the backyard. Lovell sentenced her to two years in prison after she pleaded guilty to money laundering and conspiracy to manufacture, distribute and possess with the intent to distribute marijuana.

Justin Flor operated the Billings dispensary and also tended to the plants growing at the home. He was sentenced to five years in prison on the conspiracy charge and after he was found to have violated the conditions of his release after his arrest last June.

State authorities found marijuana and a gun in Justin Flor’s bedroom when they arrested him in January on charges that he had sex with a minor under the age of 16.

Pleas for leniency

Attorneys for the family and Kristin Flor, Sherry and Richard’s daughter, had asked for leniency. Richard Flor is too ill to be placed in a prison’s general population, while Sherry and Justin were only minor players in the operation, they said.

They added that family was following the state’s medical marijuana law. The family also believed they were operating with the approval of the federal government after a 2009 U.S. Department of Justice memo said prosecutors would not pursue people who were in strict compliance with state medical marijuana laws, Kristin Flor said.

“He thought that he was doing it the right way. We all thought he was doing it the right way,” Kristin Flor said of her father.

Richard Flor’s attorney Brad Arndorfer said the federal government is at least partially responsible for the explosion of medical marijuana users and providers after that memo.

Assistant U.S. Attorney Joseph Thaggard said it is not true that the government lured the medical marijuana providers into the belief that that would not be prosecuted. The 2009 Justice Department memo made clear that those involved in medical marijuana had to be in “clear and unambiguous compliance” with state laws.

The Flors were not, Thaggard said. They manufactured and sold hashish, they distributed marijuana among providers and they sold marijuana to undercover DEA agents, he said.

Federal raids

In the March 2011 raids, federal agents searched 26 homes, businesses and warehouses across Montana related to medical marijuana operations. Montana Cannabis was one of those targeted, with its nursery in Helena, office in Billings and the Flors’ home targeted.

Besides Flor, two other Montana Cannabis co-founders were recently arrested. A third, lobbyist and patient advocate Tom Daubert, has reached a plea agreement with federal prosecutors.

Agents who searched the Flors’ home found canisters and packages of marijuana in the living room, with an assortment of loaded handguns, shotguns and semiautomatic assault rifles within easy reach. More guns were found in the bedroom and in a car in the garage, and an assault rifle was photographed hanging in the pantry next to a shelf with a box of crackers.

Richard Flor’s attorney had argued that Flor had permits for the 28 weapons that were confiscated, and belonged to a gun club, so his possession of them should not factor in his sentence. Kristin Flor told the judge that the guns were out only to be cleaned.

Lovell wasn’t buying it. “You simply don’t clean a loaded weapon,” he said.

Richard Flor’s health

Kristin Flor said her father’s health deteriorated after the raids, and she thought that was due in part to his belief that he had been betrayed by the government.

“Before the raids, my dad could carry on a conversation. He could function,” she said. “After the raids, he started to lose it.”

Richard Flor last fall was evaluated by a federal psychologist who concluded that he suffers from dementia, depression and a number of other medical conditions. While he was being evaluated, Flor was held in a general prison population and fractured four ribs after he fell out of his bed, Kristin Flor said.

She pleaded for leniency, saying her father needs 24-hour care and asked Lovell to let her take care of him at her home in Tacoma, Wash. Arndorfer backed that request.

“If we put him in prison, he isn’t going to live a year. So what have we accomplished?” the attorney said.

Lovell denied the request, though he did say Richard Flor’s condition factored into his sentence.

The Flors will be on probation after their release from prison and they must give up their home, six vehicles and trailers and the guns that were confiscated. They also were ordered to pay $288,000 in exchange for the money they made manufacturing and distributing marijuana.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(41) Comments

  1. LegAdv
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    LegAdv - April 28, 2012 2:22 pm
    The Janitor said: "LegAdv... I think the only apology required for not being clear would be mine. I tried to show that my respone may not apply to the specific case you were citing and that I was speaking in a wider scope than an individual case. Sorry for MY confusing post. This was not simply a respone to your post but the overall discussion and the original post in this thread by JDF and responses by JVH77 and others.This is another one of those discusions where people wish to speak in broad strokes but support those comments with very limited examples which are often exceptions to the rule...sorry if it seemed I was doing that too.As I said, I enjoy your posts as one of the few who just tend to stick to facts and not rhetoric(regretfully, including myself)."

    No apologies necessary, Janitor. Seriously. I've made the same mistake, myself, several times in different forums and I've also been called on it, so I certainly wouldn't be the one to 'cast the first stone', here. As you know, the Flor case was one of several federal criminal cases which involved a number of very similar factual allegations; although, there were some subtle differences in the factual allegations involved in each case, as well. Added to the mix was a federal statute that provides a number of very broad definitions of the offense of money laundering. Given this backdrop, it's really no surprise that at least some confusion in analysis is a potential result.

    Incidentally, I have also enjoyed reading your posts, as well as those of many others in this forum. And, quite candidly, I've had to reassess some of my positions a number of times, in view of additional information brought to the forefront by several of the individuals who post here on a regular basis. Have a great day.

  2. The Janitor
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    The Janitor - April 27, 2012 8:00 pm
    LegAdv... I think the only apology required for not being clear would be mine. I tried to show that my respone may not apply to the specific case you were citing and that I was speaking in a wider scope than an individual case. Sorry for MY confusing post. This was not simply a respone to your post but the overall discussion and the original post in this thread by JDF and responses by JVH77 and others.

    This is another one of those discusions where people wish to speak in broad strokes but support those comments with very limited examples which are often exceptions to the rule...sorry if it seemed I was doing that too.

    As I said, I enjoy your posts as one of the few who just tend to stick to facts and not rhetoric(regretfully, including myself).
  3. LegAdv
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    LegAdv - April 27, 2012 2:38 pm
    The Janitor said: "LegAdv said" "Other definitions of money laundering, including transactions designed, "to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity", also exist in other subsections of §1956, but they are not pertinent to this case."While I am not sure which "case" you are referring to, hiding corporate monies, failing to report certain cash transactions as required by law and not reporting income as required have been charged in several of these RAIDed business cases. This included depositing the monies into accounts other than the business accounts (yes, that is an issue for ALL Corporations, LLCs and LLPs or businesses with more than one non-family employee), failing to report cash transactions of $10,000 or more and not filing required IRS and MT Dept. of revenue documents. As these actions have been shown "in certain of these cases" to be done with the intent of hiding this income, it does rise to the level and definition of money laundering for those cases.(ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or (B) knowing that the transaction is designed in whole or in part— (i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or (ii) to avoid a transaction reporting requirement under State or Federal law, While one might hold that the "CRIME" part of this was wholly the federal drug laws, the fact remains that most persons from these raids were found to be in violation of MONTANA's laws as well. These offenses included sales to undercover agents not possessing MM cards. Possession of illegal Cards and transfers of large quantities of marijuana to non-patients including sending substantial quantities out of state. This means that the monies obtained through these illegal activities (by JUST Montana law) did, in fact, meet the simplest definition of money laundering.@LegAdv... I always enjoy your posts (you know much more than I do) but I have to differ with you on this. The feds have shown, in a number of these cases, there was a clear attempt and specific actions taken with the express intent of avoiding IRS and MT dept of Revenue reporting requirements in conjunction with the (just) Montana crimes I spoke of above. Again...such actions make them business NOT legally operating in Montana under JUST Montana law alone."

    Janitor, the only case I was referring to in my response to Burdell's 'April 20, 2012, 3:31 pm' post is the Flor case. I wasn't referring to any of the other federal criminal cases and I do apologize if my response conveyed a contrary impression. All three defendants in the Flor case were charged with a single violation of 18 USC §1956(a)(1)(A)(i), which is only one subsection of §1956. As you correctly noted, there are several other definitions of money laundering throughout the remaining subsections of §1956, including the subsection you quoted from. However, none of the Flor defendants were either charged with, or convicted under, any of those other subsections and that is the reason I didn't feel they were pertinent here. Hopefully, that clarifies my earlier position on this issue.

    As you also noted, the Government alleged in the Flor case that the defendants were not in "clear and unambiguous compliance" with the Montana Medical Marijuana Act. In fact, I cited several of their arguments in support of this allegation in my response to Burdell's subsequent 'April 20, 2012, 3:41 pm' post. Although the Government relied primarily on the alleged violations of the federal Controlled Substances Act as representing the source of the proceeds of "some form of unlawful activity" and of "specified unlawful activity" in the Flor case, I also agree with your position that the alleged violations of the Montana Medical Marijuana Act could have just as easily been relied upon in establishing the alleged money laundering violation in this case.

  4. The Janitor
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    The Janitor - April 26, 2012 1:34 pm
    JVH77... I do not know YOUR circumstances so I cannot say if you did things correctly or not. I see you reference $288,000 of inherited monies but I must admit I am not familiar with the issues. However, if you mixed corporate and private funds in a bank account, you effectively pierced the corporate veil (or shield) by doing so. If (I only say IF as I do not know) that was the case, you handed them the ability to tie your personal fortune (read: liability) together with the fortune of the corporation. This is known as “Intermingling Funds” and while not generally illegal for an individual, it can be a crime, in and of itself, for a corporation. Not pointing fingers, just conversing.
  5. The Janitor
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    The Janitor - April 26, 2012 1:19 pm
    LegAdv said" "Other definitions of money laundering, including transactions designed, "to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity", also exist in other subsections of §1956, but they are not pertinent to this case."


    While I am not sure which "case" you are referring to, hiding corporate monies, failing to report certain cash transactions as required by law and not reporting income as required have been charged in several of these RAIDed business cases. This included depositing the monies into accounts other than the business accounts (yes, that is an issue for ALL Corporations, LLCs and LLPs or businesses with more than one non-family employee), failing to report cash transactions of $10,000 or more and not filing required IRS and MT Dept. of revenue documents. As these actions have been shown "in certain of these cases" to be done with the intent of hiding this income, it does rise to the level and definition of money laundering for those cases.

    (ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or
    (B) knowing that the transaction is designed in whole or in part—
    (i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or
    (ii) to avoid a transaction reporting requirement under State or Federal law,


    While one might hold that the "CRIME" part of this was wholly the federal drug laws, the fact remains that most persons from these raids were found to be in violation of MONTANA's laws as well. These offenses included sales to undercover agents not possessing MM cards. Possession of illegal Cards and transfers of large quantities of marijuana to non-patients including sending substantial quantities out of state. This means that the monies obtained through these illegal activities (by JUST Montana law) did, in fact, meet the simplest definition of money laundering.

    @LegAdv... I always enjoy your posts (you know much more than I do) but I have to differ with you on this. The feds have shown, in a number of these cases, there was a clear attempt and specific actions taken with the express intent of avoiding IRS and MT dept of Revenue reporting requirements in conjunction with the (just) Montana crimes I spoke of above. Again...such actions make them business NOT legally operating in Montana under JUST Montana law alone.
  6. dolphind3
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    dolphind3 - April 25, 2012 10:19 am
    Well said JDF. As for you hobit..... I support the use of medical pot. This however is not a benign plant
  7. JUSTDAFACTS
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    JUSTDAFACTS - April 24, 2012 6:28 pm
    Hobbit said: "dolphind3: You are not ignoring me, just my questions. You have no answers. Again, I ask, where is your evidence for all those calls and emails to the legislators? I am sorry about your inability to gather and assimilate facts. I wonder if you could tell me why cannabis is federally illegal? Perhaps you think it is because it is dangerous and addictive and has no medicinal value? If that is what you think, you are wrong. The only reason left for keeping it illegal is that Big Pharma and others want it that way. There are none so blind as those who will not see. Have a look at Gen. 1:29, God gave us this plant, but the government thinks they trump God. "

    I keep looking for the kind of "proof", you require of others, somewhere in your posts....hmmmmm. Funny but I can not find it. With the way you constantly ridicule others for not offering proof of every little point, I just know you have extensive proof posted here somewhere. Could you point it out to us? Where have you posted your proof of the government conspiracy? How about the PROOF pharmaceutical companies are responsible for the federal anti-marijuana laws? Now just where are those posts located in this thread? They must be here somewhere or that would make you nothing more than a.......
  8. LegAdv
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    LegAdv - April 24, 2012 10:29 am
    JVH77 said: "I do appreciate the legal knowledge you've provided on multiple occasions, the jargon and intentional confusion that is inherently present in the world of law is one of the weapons the government uses against the cannabis community so it's nice to have someone help decipher it. I think you just took too literally my original statement. What I should have said was the bank account was the BASIS for the money laundering charge.People hear money laundering and assume something sinister is going on. My intent was to show the person I was responding to that the origin for the money laundering charges, was nothing more than an attempt to conduct business as any business would. At any rate take care."

    Fair enough, JVH77. I appreciate the additional clarification you provided on your position, as well. Have a great day.

  9. Hobbit
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    Hobbit - April 24, 2012 7:02 am
    dolphind3: You are not ignoring me, just my questions. You have no answers. Again, I ask, where is your evidence for all those calls and emails to the legislators? I am sorry about your inability to gather and assimilate facts. I wonder if you could tell me why cannabis is federally illegal? Perhaps you think it is because it is dangerous and addictive and has no medicinal value? If that is what you think, you are wrong. The only reason left for keeping it illegal is that Big Pharma and others want it that way. There are none so blind as those who will not see. Have a look at Gen. 1:29, God gave us this plant, but the government thinks they trump God.
  10. Richard Cecil Joyce Montana Tech
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    Richard Cecil Joyce Montana Tech - April 23, 2012 9:20 pm
    However you cut it, and despite the fine points of this case, there are severely conflicting messages from the federal and state levels regarding marijuana. Those caught in the cross-fire are having their lives ruined. We should have the guts to go one way or the other, and not leave it up to the mindset and egos of individual prosecutors. - Richard Joyce, Montana
  11. Shenanigans
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    Shenanigans - April 23, 2012 4:31 pm
    Is this that free market, limited government, individual liberty the CONservatives are always bleating on about?
    Indeed.
    Where's the legions of State's rights defenders? My God CONservatives, here's your chance to actually have something legitimate to oppose President Obama on. But crickets are chirping while $15,000,000,000 a year is wasted on cannabis prohibition alone. Nice. Stay classy CONservatives.


    End the insanity! End the hypocrisy!
    Re-Legalize Cannabis!

    Start by signing the petition for CI-110 http://www.montanafirst2012.org/
  12. Riamh
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    Riamh - April 23, 2012 2:17 pm
    Gotta love the people who just want to split hairs instead of actually communicating. IMHO, LegAdv.. you've proven JVH77's point. We can split hairs all we want, but it boils down, to because of the fed's stance on MM laws, any otherwise "legally" operating provider is still in violation. To make it out as tho these people were really "laundering" money is just feeding hype. The fact is, these raids were based on property aquisition, not law enforcement.
  13. JVH77
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    JVH77 - April 23, 2012 12:59 pm
    LegAdv said: "JVH77, I apologize for the confusion. My last response related to PROOF of all of the elements required to establish a violation of 18 USC §1956(a)(1)(A)(i). In other words, it must be PROVEN that the defendant KNEW "that the property involved in a financial transaction "represents the proceeds of some form of unlawful activity". In addition, it must also be PROVEN that the defendant conducted or attempted to conduct "a financial transaction which in fact involves the proceeds of specified unlawful activity". And finally, it must also be PROVEN that the defendant's INTENT in conducting or attempting to conduct that financial transaction was "topromote the carrying on of specified unlawful activity". The reason why proof of a bank deposit, by itself, is insufficient, is because you could have a case where the person making the deposit is unaware that the source of the proceeds is "some form of unlawful activity". Likewise, you could have a case where a person making the deposit has knowledge of the source of the proceeds, but lacks the intent "to promote the carrying on of specified unlawful activity". Or you could have a case involving a lack of both knowledge and intent. Or you could even have a case where the source of the deposit itself is either untraceable or otherwise, cannot be proven to be "specified unlawful activity". Hopefully, that answers your question. "

    I see, so it really is a case of semantics? Condition 1 is they must conduct a transaction involving the proceeds from an activity they knew to be against Federal law. Since every member of the company knew it was against Federal law, anyone from the company depositing money into our bank account would meet that criteria. Condition 2 sounds very much like condition 1 to me and would also seem to be present where an employee deposits money they knew to be from a Federally illegal business into that business's account. And if that account was used for payroll and expenses related to keeping the business in operation as this one was, that would seem to indicate condition 3 is present as well.

    Your point seems to be how the government will prove these allegations while mine is what they've used to justify them in the first place. I made the comment that placing money into a business account was the basis for the money laundering charges, and I stand by it whether or not every aspect of the allegation is apparent from my original statement . Your explanation doesn't tell me how I was wrong in saying that. It only seems to explain why and how the government is able to justify it.

    I do appreciate the legal knowledge you've provided on multiple occasions, the jargon and intentional confusion that is inherently present in the world of law is one of the weapons the government uses against the cannabis community so it's nice to have someone help decipher it. I think you just took too literally my original statement. What I should have said was the bank account was the BASIS for the money laundering charge.

    People hear money laundering and assume something sinister is going on. My intent was to show the person I was responding to that the origin for the money laundering charges, was nothing more than an attempt to conduct business as any business would. At any rate take care.
  14. LegAdv
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    LegAdv - April 23, 2012 10:51 am
    JVH77 said: "But all three elements are present when making a deposit from a Federally illegal business, how am I wrong on that. Simply posting legal jargon and telling me I've got it wrong somehow doesn't answer my question. What else did these people do to launder money beside putting it in a bank account?"

    JVH77, I apologize for the confusion. My last response related to PROOF of all of the elements required to establish a violation of 18 USC §1956(a)(1)(A)(i). In other words, it must be PROVEN that the defendant KNEW "that the property involved in a financial transaction "represents the proceeds of some form of unlawful activity". In addition, it must also be PROVEN that the defendant conducted or attempted to conduct "a financial transaction which in fact involves the proceeds of specified unlawful activity". And finally, it must also be PROVEN that the defendant's INTENT in conducting or attempting to conduct that financial transaction was "to
    promote the carrying on of specified unlawful activity". The reason why proof of a bank deposit, by itself, is insufficient, is because you could have a case where the person making the deposit is unaware that the source of the proceeds is "some form of unlawful activity". Likewise, you could have a case where a person making the deposit has knowledge of the source of the proceeds, but lacks the intent "to promote the carrying on of specified unlawful activity". Or you could have a case involving a lack of both knowledge and intent. Or you could even have a case where the source of the deposit itself is either untraceable or otherwise, cannot be proven to be "specified unlawful activity". Hopefully, that answers your question.

  15. dolphind3
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    dolphind3 - April 23, 2012 10:13 am
    I think I am going to start doing what other do and ignore hobit. I have to give you credit jvh even though I don't agree with you. You do your research and you believe what you believe and say. Same here. Lets leave the name calling like saying people we don't agree with are ignorant and uneducated to hobit. Nice posts leg adv.
  16. JVH77
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    JVH77 - April 23, 2012 8:45 am
    LegAdv said: "Not really, JVH77. Proof of all three elements is required for a violation; not just proof of one element."

    But all three elements are present when making a deposit from a Federally illegal business, how am I wrong on that. Simply posting legal jargon and telling me I've got it wrong somehow doesn't answer my question. What else did these people do to launder money beside putting it in a bank account?
  17. blackheart
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    blackheart - April 23, 2012 7:25 am
    Guilty under FEDERAL law...enough stated...way to go Law Enforcement!! KEEP UP THE EXCELLENT WORK
  18. Hobbit
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    Hobbit - April 23, 2012 5:21 am
    dolphind3: A criminal has a victim. Who is the victim here? Don't you think law enforcement should give more attention to people who really hurt other people? Medical cannabis providers help people who are sick. Law enforcment should pay more attention to meth and alcohol abuse, but that would mean they might have to deal with dangerous people. They are cowards and enjoy the support of Big Pharma. You really think that the 2004 law was squashed because of phone calls and emails to legislators? Have you seen evidence of those communications? No. You just don't understand how things work, that's all.
  19. LegAdv
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    LegAdv - April 22, 2012 11:01 pm
    JVH77 said: "First, the defendant must know that the property involved in a financial transaction represents the proceeds of some form of unlawful activity. Second, the defendant must conduct or attempt to conduct that transaction which, in fact, involves those proceeds. And third, he/she must do so with the intent to promote the carrying on of specified unlawful activity.Well since all three of these conditions are present when making a bank deposit from a business that is against Federal law it would seem to indicate a simple bank deposit was all that was needed to prove money laundering. I think you just proved what I was saying."

    Not really, JVH77. Proof of all three elements is required for a violation; not just proof of one element.

  20. LegAdv
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    LegAdv - April 22, 2012 10:58 pm
    Burdell said: "Further, lets talk Ogden memo. Remember the context at the time. When the memo came out, it followed candidate Obama saying resources shouldn't go to medical marijuana providers helping the sick in compliance with state law. It was nearly universally misinterpreted. Here is but one example: http://www.nytimes.com/2009/10/20/us/20cannabis.html. Its easy to lay this at the feet of those who are now paying the price, but it isn't true this was a creative reinterpretation of the commitments made to the citizens. Quite simply, the DOJ didn't want to back up the Obama administrations pre-election promises, and the Prez is now stuck trying not to look soft on potheads. They chose their words carefully and are now claiming it was all just a bunch of wishful thinking. I don't know about the Flors, and we may never find out. When someone takes a plea, the government's version of the story becomes fact whether it is or not. People need to start going to trial to get their versions out there. Those people will pay a heavy price because contesting charges carries accelerated penalties just for exercising the right to a jury trial. More meat for the grinder, but it will have to be done for things to change. "

    Interesting points, Burdell. Certainly any accused person has the right to proceed to trial in a criminal case, even against the advice of his/her attorney. However, and unfortunately for the defendants in this case, the fact remains that the Ogden Memo does not provide an 'entrapment by estoppel' defense for any violations of the Controlled Substances Act. Phrases in the NY Times article you cited, such as, "...should not face federal prosecution..." and, “It will not be a priority to use federal resources...", are not the same as an affirmative statement made by an official that indicates certain conduct is lawful or permissible. Neither the NY Times article, nor any of the statements made in the Ogden Memo, meet the test necessary to make a primae facie case of entrapment by estoppel, which requires a defendant to show: (1) an authorized government official, empowered to render the claimed erroneous advice, (2) who has been made aware of all the relevant historical facts, (3) affirmatively told the defendant the proscribed conduct was permissible, (4) that the defendant relied on the false information, and (5) that the defendant’s reliance was reasonable. United States v. Batterjee, 361 F.3d 1210, 1216 (9th Cir. 2004). But assuming, for the sake of discussion, that the defendants had met this burden, the Government would have still likely presented evidence that the defendants were, nonetheless, not in "clear and unambiguous compliance" with the Montana Medical Marijuana Act. In this regard, the Government asserted in this case that the defendants: (1) distributed marijuana to some people who were not medical marijuana cardholders, (2) sold hashish, a drug not authorized for distribution under the Montana Medical Marijuana Act, (3) distributed marijuana to at least one medical marijuana patient for whom they were not authorized caregivers, (4) maintained more marijuana plants than necessary to service their actual authorized customers, and (5) engaged in prohibited caregiver-to-caregiver distributions of marijuana.


  21. LegAdv
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    LegAdv - April 22, 2012 10:48 pm
    Burdell said: "LegalAdv: lets look at those elements - "First, the defendant must know that the property involved in a financial transaction represents the proceeds of some form of unlawful activity." In other words, the person making the deposits had to know it came from the sale of medical marijuana. "Second, the defendant must conduct or attempt to conduct that transaction which, in fact, involves those proceeds." So the proceeds must actually come from the sale of medical marijuana to state patients. "And third, he/she must do so with the intent to promote the carrying on of specified unlawful activity." That is, the sales proceeds go back into the company that is providing medical marijuana to pay for things like payroll, power, taxes, insurance. Sure there is more than simply making a deposit in a bank, but it sure isn't the definition of money laundering as it is used in the English language, which is "concealing the source of illegally gotten money." This is government new-speak to cast medical marijuana providers in the same class as drug cartels. And BTW, the banks sure as sh*t knew where the money came from. Why aren't they co-conspirators? How about the power company, or the state of Montana that took the taxes? Or the hardware store that sold growing supplies? Or the accounting firms who did the taxes? Or the voters who put the law on the books? Or the legislature that saw 3 legislative sessions go by with practically no change to the rules?"

    Good analysis of the elements, Burdell. The only problem is that the formation and operations of the "company" in this case violated federal law, since those activities meet at least one of the definitions of "specified unlawful activity", under 18 USC §1956(c)(7)(A). Other definitions of money laundering, including transactions designed, "to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity", also exist in other subsections of §1956, but they are not pertinent to this case. Your remaining questions are interesting, but the answers to those questions are dependent on the application of the facts and circumstances of each case to provisions of the U.S. Constitution, federal statutes, federal case law and numerous investigative and prosecutorial policy decisions promulgated by the U.S. Department of Justice and the U.S. Attorney's Office. In addition, the U.S. Attorneys in each district are invested with a considerable amount of prosecutorial discretion in their handling of federal criminal cases under the United States Attorneys' Manual. USAM 9-2.001 (http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/2mcrm.htm#9-2.001)

  22. LegAdv
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    LegAdv - April 22, 2012 10:41 pm
    hatrack71 said: "Sounds like a major catch 22 to me. If the initiative process is valid and not just for show, the State of Montana literally entrapped these individuals and anyone else in the MM industry it sounds like to me. Our officials need to do some explaining as to why this is allowed to happen. That is if they take initiatives as valid State law. It just doesn't make any sense to me other than a Federal government totally out of control."

    hatrack71, I don't see any 'entrapment' activities on the part of any Montana state or local officials at this point; at least, not under the definition provided by §45-2-213 MCA. And as you noted, I-148 was a statutory initiative, which was voted on by the Montana electorate. It was not an act of the Montana Legislature.

  23. dolphind3
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    dolphind3 - April 22, 2012 9:18 pm
    JVH, I don't assume anything. I do know that what they did was a crime and they deserve what they get
  24. JVH77
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    JVH77 - April 21, 2012 2:44 pm
    And just for the record I have no idea whether there was or wasn't documentation of the inheritance, my assumption is there was. dolphin simply likes to take one snippet from a post and jump all over it while completely ignoring the rest. A desperate tactic indeed but really all that's left when reality isn't on your side.
  25. JVH77
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    JVH77 - April 21, 2012 2:40 pm
    you failed to read my entire comment dolphin, whether or not there is a paper trail is irrelevan t given they were involved in a Federal crime, that alone makes the inheritance subject to forfeiture. But feel free to keep making assumptions based only on your hatred for people involved with cannabis. You've proven yourself time and time again to be incapable of logical debate.
  26. dolphind3
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    dolphind3 - April 21, 2012 9:56 am
    No paper trail sounds like a criminal! With tactics like this no doubt they were breaking the law.
  27. dolphind3
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    dolphind3 - April 21, 2012 9:54 am
    No paper trail for an inheritance?? Give me a break!
  28. JVH77
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    JVH77 - April 20, 2012 7:05 pm
    First, the defendant must know that the property involved in a financial transaction represents the proceeds of some form of unlawful activity. Second, the defendant must conduct or attempt to conduct that transaction which, in fact, involves those proceeds. And third, he/she must do so with the intent to promote the carrying on of specified unlawful activity.

    Well since all three of these conditions are present when making a bank deposit from a business that is against Federal law it would seem to indicate a simple bank deposit was all that was needed to prove money laundering. I think you just proved what I was saying.
  29. Burdell
    Report Abuse
    Burdell - April 20, 2012 3:41 pm
    Further, lets talk Ogden memo. Remember the context at the time. When the memo came out, it followed candidate Obama saying resources shouldn't go to medical marijuana providers helping the sick in compliance with state law. It was nearly universally misinterpreted. Here is but one example: http://www.nytimes.com/2009/10/20/us/20cannabis.html. Its easy to lay this at the feet of those who are now paying the price, but it isn't true this was a creative reinterpretation of the commitments made to the citizens. Quite simply, the DOJ didn't want to back up the Obama administrations pre-election promises, and the Prez is now stuck trying not to look soft on potheads. They chose their words carefully and are now claiming it was all just a bunch of wishful thinking. I don't know about the Flors, and we may never find out. When someone takes a plea, the government's version of the story becomes fact whether it is or not. People need to start going to trial to get their versions out there. Those people will pay a heavy price because contesting charges carries accelerated penalties just for exercising the right to a jury trial. More meat for the grinder, but it will have to be done for things to change.
  30. Burdell
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    Burdell - April 20, 2012 3:31 pm
    LegalAdv: lets look at those elements - "First, the defendant must know that the property involved in a financial transaction represents the proceeds of some form of unlawful activity." In other words, the person making the deposits had to know it came from the sale of medical marijuana.

    "Second, the defendant must conduct or attempt to conduct that transaction which, in fact, involves those proceeds." So the proceeds must actually come from the sale of medical marijuana to state patients.

    "And third, he/she must do so with the intent to promote the carrying on of specified unlawful activity." That is, the sales proceeds go back into the company that is providing medical marijuana to pay for things like payroll, power, taxes, insurance. Sure there is more than simply making a deposit in a bank, but it sure isn't the definition of money laundering as it is used in the English language, which is "concealing the source of illegally gotten money." This is government new-speak to cast medical marijuana providers in the same class as drug cartels. And BTW, the banks sure as sh*t knew where the money came from. Why aren't they co-conspirators? How about the power company, or the state of Montana that took the taxes? Or the hardware store that sold growing supplies? Or the accounting firms who did the taxes? Or the voters who put the law on the books? Or the legislature that saw 3 legislative sessions go by with practically no change to the rules?
  31. hatrack71
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    hatrack71 - April 20, 2012 2:36 pm
    LegAdv said: "Just to clarify, the money laundering offenses the defendants in this case were charged with under 18 USC §1956(a)(1)(A)(i) consist of three elements. First, the defendant must know that the property involved in a financial transaction represents the proceeds of some form of unlawful activity. Second, the defendant must conduct or attempt to conduct that transaction which, in fact, involves those proceeds. And third, he/she must do so with the intent to promote the carrying on of specified unlawful activity. In short, more than a simple bank deposit is required to prove up a violation of this statute. And with all due respect to Ms. Flor, her characterization of the often-referred to 'Ogden Memo' (http://www.justice.gov/opa/documents/medical-marijuana.pdf) is simply incorrect. This memo does NOT provide any defense to a violation of the federal Controlled Substances Act. To the contrary, it specifically states that, "This guidance regarding resource allocation does not 'legalize' marijuana or provide a legal defense to a violation of federal law, nor is it intended to create any privileges, benefits, or rights, substantive or procedural, enforceable by any individual, party or witness in any administrative, civil, or criminal matter. Nor does clear and unambiguous compliance with state law or the absence of one or all of the above factors create a legal defense to a violation of the Controlled Substances Act." "

    Sounds like a major catch 22 to me. If the initiative process is valid and not just for show, the State of Montana literally entrapped these individuals and anyone else in the MM industry it sounds like to me. Our officials need to do some explaining as to why this is allowed to happen. That is if they take initiatives as valid State law. It just doesn't make any sense to me other than a Federal government totally out of control.
  32. LegAdv
    Report Abuse
    LegAdv - April 20, 2012 12:15 pm
    Just to clarify, the money laundering offenses the defendants in this case were charged with under 18 USC §1956(a)(1)(A)(i) consist of three elements. First, the defendant must know that the property involved in a financial transaction represents the proceeds of some form of unlawful activity. Second, the defendant must conduct or attempt to conduct that transaction which, in fact, involves those proceeds. And third, he/she must do so with the intent to promote the carrying on of specified unlawful activity. In short, more than a simple bank deposit is required to prove up a violation of this statute.

    And with all due respect to Ms. Flor, her characterization of the often-referred to 'Ogden Memo' (http://www.justice.gov/opa/documents/medical-marijuana.pdf) is simply incorrect. This memo does NOT provide any defense to a violation of the federal Controlled Substances Act. To the contrary, it specifically states that, "This guidance regarding resource allocation does not 'legalize' marijuana or provide a legal defense to a violation of federal law, nor is it intended to create any privileges, benefits, or rights, substantive or procedural, enforceable by any individual, party or witness in any administrative, civil, or criminal matter. Nor does clear and unambiguous compliance with state law or the absence of one or all of the above factors create a legal defense to a violation of the Controlled Substances Act."
  33. hatrack71
    Report Abuse
    hatrack71 - April 20, 2012 12:06 pm
    Burdell said: ""Money laundering" is defined as placing sales proceeds in a banking institution. While we are at it, extortion is what happens when you use a vending machine without exact change, and murder is what happens when you cross the street outside a crosswalk. These are facts. The government said. Oh, and not believing what the government says about someone is for suckers. "

    That's some funny but at the same time disturbing stuff! :^)
  34. JVH77
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    JVH77 - April 20, 2012 11:45 am
    Actually dolphin, they can. The proof just took place. If there is no clear paper trail as to where the inheritance came from it's pretty easy to claim it was from the business. Even if they can prove the inheritance it's still subject to forfeiture given they were involved in Federal crimes. Since MTcannabis was operating at a substantial loss every month all they really had to seize was the equipment, the cannabis, and that inheritance. And that is far from all I have. I'm sure I can answer any questions you may have on MTcannabis or MM in general because I actually know about this topic. I have actual experience and knowledge to draw from whereas you only have opinion.

    One clear indication of what drove these raids is the fact that the only question asked during the raid was "where is the money"? Perhaps they should have done a little digging during their 28 month investigation, they might have known where the money was had they looked at our power bill.
  35. Burdell
    Report Abuse
    Burdell - April 20, 2012 10:46 am
    "Money laundering" is defined as placing sales proceeds in a banking institution. While we are at it, extortion is what happens when you use a vending machine without exact change, and murder is what happens when you cross the street outside a crosswalk. These are facts. The government said. Oh, and not believing what the government says about someone is for suckers.
  36. hatrack71
    Report Abuse
    hatrack71 - April 20, 2012 10:44 am
    I would also like to add for those who haven't realized the obvious yet. We are living under a Federal government that is way overstepping and way out of control.
  37. dolphind3
    Report Abuse
    dolphind3 - April 20, 2012 10:42 am
    They can't place charges and make them stick based on a family inheritance. Seriously???? That is all you have???

    I bet his health problems are from not have his drug of choice anymore
  38. hatrack71
    Report Abuse
    hatrack71 - April 20, 2012 10:41 am
    So if I am reading this right, the judge denied Mr Flor the medical attention he needs to live? And instead sentenced him to a death sentence in Deer Lodge? Hmmm... I'd say that is grounds for a lawsuit against the State of Montana and the sentencing judge. Correct me if I'm wrong here. I just have very little respect for our state officials that go along with the criminal agenda of the Feds. These people NEED to be stopped!!
  39. JVH77
    Report Abuse
    JVH77 - April 20, 2012 9:28 am
    We were in fact paying our taxes, lots of them.
  40. JVH77
    Report Abuse
    JVH77 - April 20, 2012 9:27 am
    Actually JDF, the money laundering charges stem from maintaining a business bank account and making deposits in that account. The only thing they did to launder that money was put it in a bank account. Yet another indication that having a legitimate business was never an option. Money laundering sounds like something complicated and sinister, but it was really just an attempt at doing business like any other company.

    And just in case you're wondering the $288,000 was actually a family inheritance, not proceeds from cannabis sales.
  41. JUSTDAFACTS
    Report Abuse
    JUSTDAFACTS - April 20, 2012 7:07 am
    THE STORY STATES: "Lovell sentenced her to two years in prison after she pleaded guilty to money laundering and..."

    Once again I point out that money laundering is a crime for any Montana business regardless of the product sold. Therefore this was not a "otherwise" lawful business under Montana Law. This has been a common charge among the raided providers. Essentially, they were not paying their taxes.

    I am still not happy about that property owner being charged for renting the building to a provider but as for the raided business, I have not seen any yet who were otherwise lawful once the facts come out.

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