IRAs Seized as Part of Marijuana Investigation
OCT 31 -- OAKLAND, CA – United States Attorney Scott N. Schools, Drug Enforcement Administration (DEA) Special Agent in Charge Javier F. Peña, and Internal Revenue Service Criminal Investigation (IRS-CI) Special Agent in Charge Scott O’Briant announced today that a federal grand jury in Oakland indicted 2 brothers for conspiracy to distribute more than 100 kilograms of marijuana, distribution of marijuana, maintaining a drug involved premises, conspiracy to launder money, and money laundering. Winslow Norton, 26, of Lafayette, and Abraham Norton, 23, of Oakland, were arrested this morning, after law enforcement served multiple search warrants in relation to the investigation. The indictment was filed on October 25, 2007, and unsealed today.
The DEA and IRS-CI began this investigation approximately one year ago after receiving reports concerning an alleged large-scale marijuana distribution center operating in Hayward, California. According to the indictment, Winslow Norton and Abraham Norton (“Nortons”) owned and operated for profit the Compassionate Collective of Alameda County (CCAC), which was later known as the Compassionate Patients’ Cooperative, located at 21222, 21228, and 21272 Mission Blvd., Hayward. The Nortons allegedly employed an armored car service to transport the marijuana sales proceeds from the marijuana distribution center to a bank, while armed guards were employed at the business location. The indictment further alleges that the distribution center generated substantial sales and profits which increased over time. In 2004, sales allegedly totaled more than $74,000. In 2005, sales allegedly totaled more than $1.3 million. In 2006, sales allegedly totaled more than $21.5 million, and from January 2007 through June 2007, sales allegedly totaled more than $26.3 million. In addition, the indictment alleges the Nortons used proceeds derived from the sales of marijuana to purchase several luxury items and properties, including but not limited to the following: two new Mercedes Benz automobiles; one new Ford F-250 truck; three new motorcycles; a residence in Lafayette, California; and a commercial building in Albany, California. Finally, the indictment alleges that the Nortons used the proceeds derived from the sales of marijuana to open two Individual Retirement Accounts (“IRA”), in their own names, in the amounts of $25,000 each, adding an additional $44,000 to each account at a later date.
According to IRS Criminal Investigation Special Agent in Charge, Scott O'Briant, “IRS-CI plays a unique role in these types of cases by using the same financial investigative expertise we use in tax investigations to target the profits and financial gain of narcotic traffickers. It is a priority of IRS Criminal Investigation to eradicate criminal organizations by pursuing money laundering charges and eliminating the profits generated by their illicit activities.”
As a result of this investigation agents seized what has been estimated to be several hundred pounds of marijuana, packing materials, and approximately $200,000 in cash. Law enforcement also seized two bank accounts, two IRAs, a 2005 Mercedes Benz, a 2006 ML500 Mercedes Benz, a residence located in Lafayette, and a commercial building on San Pablo Avenue in Albany.
The indictment charges one count of conspiracy to distribute more than 100 kilograms of marijuana, in violation of Title 21, United States Code, Section 846; two counts of possession with intent to distribute marijuana, in violation of Title 21, United States Code, Section 841(a)(1); one count of maintaining a drug involved premises, in violation of Title 21, United States Code, Section 856(a)(1); one count of conspiracy to launder money, in violation of Title 18, United States Code, Section 1956(h); eight counts of money laundering (promotion), in violation of Title 18, United States Code, Section 1956(a)(1)(A)(I); and ten counts of money laundering (expenditure), in violation of Title 18, United States Code, Section 1957.
The drug conspiracy count has a statutory maximum term of imprisonment of 40 years and a minimum term of 5 years, along with a $2 million fine and at least five years of supervised release. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Winslow Norton and Abraham Norton made their initial appearance in federal court in San Francisco today at 9:30 a.m. before the Hon. Edward M. Chen, United States Magistrate Judge. The defendants are presently held without bail. The defendants are scheduled to appear before United States Magistrate Judge Wayne D. Brazil tomorrow, October 31, 2007, for the identification of defense counsel and the setting of a detention hearing. The case has been assigned to United States District Judge D. Lowell Jensen.
Today’s enforcement operation was the result of an investigation conducted by the DEA and IRS-CI, with assistance from the Alameda County Sheriff’s Office, Oakland Police Department and the Berkeley Police Department.
This case is being prosecuted by the United States Attorney’s Office in the Northern District of California. Stephen Corrigan is the Assistant U.S. Attorney who is prosecuting the case, with the assistance of Legal Assistant Cynthia Daniel. Assistant United States Attorneys Patricia Kenney and Stephanie Hinds of the Asset Forfeiture Unit directed the seizure of the drug trafficking assets. An indictment contains only allegations against an individual and, as with all defendants, Winslow Norton and Abraham Norton must be presumed innocent unless and until proven guilty.