AUG 26 (FRESNO, Calif.) – Damone Kelley, 45, of Fresno, is the last of seven defendants to plead guilty today for his involvement in a drug and money laundering ring that extended from Fresno to Alabama and Georgia, Acting Special Agent in Charge Bruce C. Balzano and United States Attorney Benjamin B. Wagner announced.
“The defendants in this case used California’s medical marijuana laws to cloak traditional interstate drug trafficking,” said U.S. Attorney Wagner. “The marijuana was grown in California, ostensibly for medical purposes, but was sold for profit in Georgia and Alabama. A medical marijuana dispensary was used as a front for the interstate trafficking. Today’s guilty plea by the final defendant in this case marks the end of this ring, but we will continue to investigate and prosecute others who seek to enrich themselves by exploiting California’s medical marijuana laws to commit traditional drug trafficking crimes.”
According to the guilty plea, Kelley structured $65,298 in cash derived from an interstate marijuana-trafficking organization led by Joseph Edwin Gable, aka Mike Jones, 42, in order to evade currency transaction reporting requirements. The cash was deposited into a bank account of Kelley’s relative and withdrawn in amounts $10,000 or less over a five-month period. Cash transactions involving more than $10,000 trigger the filing of a currency transaction report with the Internal Revenue Service.
Gable admitted to structuring $693,905 of drug proceeds from the distribution of marijuana in Birmingham. He is currently serving a federal prison sentence of four years and five months.
Last month, Gable’s sister, Catatea James, 42, an employee of the IRS in Fresno, pleaded guilty to structuring $113,078 in cash of drug proceeds. She is scheduled for sentencing on October 10, 2013. Kevin Spencer Jr., 28, formerly of Fresno, pleaded guilty to structuring Gable’s drug proceeds totaling $108,560 and is scheduled for sentencing on October 7, 2013.
Fresno residents, Elgeron Graves, and Herman Graves, 46, who are brothers and Vincent Graves, 53, who is unrelated, all pleaded guilty to drug offenses relating to their involvement in the cultivation and distribution of marijuana on behalf of Gable. Elgeron Graves is currently serving a one-year prison sentence. Herman and Vincent Graves are scheduled for sentencing on October 7, 2013.
According to court documents, marijuana was grown by the Graves brothers on agricultural property in Fresno County. The Graves brothers recruited people to obtain California medical recommendations from a local physician for the purpose of growing marijuana intended for interstate shipment. The Graves brothers also used a now defunct marijuana dispensary, California Patient Network, in the Tower District in Fresno as a front business for the interstate shipment of marijuana.
Kelley and Vincent Graves used a semi-tractor trailer purchased by Gable and placed in Kelley’s name to transport marijuana to Birmingham, Alabama for distribution. The Drug Enforcement Administration has forfeited the truck, which was valued at $25,000 and equipped with a hidden compartment used to conceal marijuana that was shipped outside of California.
Kelley is scheduled for sentencing before Senior U.S. District Judge Anthony W. Ishii on November 13, 2013. Kelley, James, and Spencer face maximum prison sentences of 10 years and a $250,000 fine. Herman Graves faces five to 40 years in prison and a $5 million fine. Vincent Graves faces a maximum prison sentence of five years in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.This case is the product of a joint investigation by DEA and IRS Criminal Investigation, with assistance from the Treasury Inspector General of Tax Administration (TIGTA), U.S. Postal Inspection Service in Birmingham, Ala., California Highway Patrol, Fresno County Sheriff’s Office, Fresno Police Department, Birmingham Police Department, and the Madera County Narcotics Enforcement Team (MADNET). Assistant United States Attorneys Karen A. Escobar and Grant B. Rabenn are prosecuting the case.