A day after federal agents executed 30 search warrants in 13 Montana cities, the U.S. Attorney's Office said that the medical-marijuana businesses raided were involved in large-scale marijuana trafficking and tax evasion.
While there have been no arrests yet, agents seized at least $3.6 million from various bank accounts, according to court documents and the U.S. Attorney's Office.
In one case, undercover agents repeatedly bought marijuana from one of the owners of Montana Cannabis, which has offices in Helena, Billings and Miles City. According to court documents, Montana Cannabis also bought large amounts of marijuana from a dispensary in Bozeman after its grow operation in Helena was vandalized.
Assistant U.S. Attorney Victoria Francis said in a statement Tuesday afternoon that the raids came at the end of an 18-month investigation involving multiple federal agencies. Francis didn't list the targets of the search warrants, but many are connected to medical-marijuana businesses.
The release said medical-marijuana patients with valid state licenses weren't the target of the raids.
Earlier reports indicated that two other businesses in Billings had been raided, but both those businesses said Tuesday that they hadn't been visited by law enforcement. Americans for Safe Access, an advocacy group that had released a list of raided businesses on Monday, said it had received incorrect information.
According to an affidavit filed with several of the search warrants, federal agents had been watching Richard and Justin Flor of Miles City since 2007. Richard Flor, father of Justin, is one of the owners of Montana Cannabis, but in 2007 was growing marijuana in his backyard. Undercover agents in Miles City bought marijuana from the Flor family at least twice in 2007, and the Flors also sold the agents a sniper rifle.
The federal government doesn't recognize the legal use of medical marijuana, so the affidavit doesn't state if the Flors or anyone else were legal caregivers under Montana law.
Based on interviews with former employees, the affidavit also explains the business operation of Montana Cannabis, which was run by Flor, Chris Williams and Tom Daubert. Daubert is head of the lobbying group Patients and Families United.
The former employees told agents that Williams and other employees had "machine guns" in the business for protection, and Williams had a pistol with him everywhere he went. At first, Williams, Flor and Daubert were paid $2,000 a month. But as business improved, that jumped to $4,000 a month.
In early 2010, the Helena grow operation was vandalized, so Daubert and Williams arranged to buy marijuana every week from Big Sky Patient Care in Bozeman. Big Sky Patient Care was also raided on Monday. The informant told agents that, for about six months, Montana Cannabis bought pounds of marijuana each week from Big Sky Patient Care, with one pound costing $2,700.
Once Montana Cannabis recovered from the vandalism, they stopped buying marijuana from Bozeman. Employees would prepare the marijuana for distribution in Helena, and drivers would take it to Billings and Miles City. The business sold marijuana in many forms, including hash that was prepared by people who visited every month from Missouri, the affidavit states.
By November 2010, the informant said Daubert had fallen out with Williams and stopped working at Montana Cannabis, though he still remained an owner and likely collected his monthly check.
On March 4, an undercover drug agent bought a quarter-ounce of marijuana from Justin Flor at the Montana Cannabis store in Billings, at 2325 Ninth Ave. N. A few days later, agents went through the Flors' garbage in Miles City and found marijuana in the trash.
Besides the search warrants, agents seized more than $3.5 million from five bank accounts linked to Montana Cannabis. The smallest amount of money in the accounts was nearly $88,000, while one account held more than $1.6 million. Agents said an account at Valley Bank in Helena was opened in December 2009. In about a year, Montana Cannabis deposited more than $1.2 million, mostly in cash.
The medical-marijuana community in Billings was still reeling from the raids on Tuesday. David Couch, owner of Yellowstone Patient Care, said his business had not been raided on Monday, despite widespread accounts that it had been. Couch has four locations, including one in Miles City and one on 24th Street West across from the Rimrock Mall. He said his business had been connected to Big Sky Patient Care in Bozeman but "divorced itself" in September because of concerns he had with the Bozeman outfit.
Couch said he received advanced notice that his business would not be raided, but he still closed his doors on Monday to avoid any problems. He said he had no idea how his business had been linked to the raids. Another Billings dispensary, A Kinder Caregiver, also said it hadn't been raided.
"We were informed that there were several dispensaries that were going to be raided across the state," Couch said. "We thought it in the best interests of our employees and patients to close the door for the day and let the chips fall."