NOV 30 (SACRAMENTO, Calif.) —United States District Judge Edward J. Garcia sentenced Michael Giang, 39 of San Francisco, today to two years and eight months in prison for mortgage fraud in an indoor marijuana growing scheme, Drug Enforcement Administration Special Agent in Charge Anthony D. Williams and U.S. Attorney Benjamin B. Wagner announced.
This case is part of the Operation Marvin Gardens crackdown on one of the largest, most sophisticated residential indoor marijuana growing organizations. This crime ring exported its criminal activities from the San Francisco Bay area to the Central Valley. This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation, the Drug Enforcement Administration, and the Elk Grove and Stockton Police Departments.
According to court documents, in 2006, Giang and others engaged in a scheme to purchase residential properties in Stockton to use for marijuana cultivation. During the scheme, at least 26 homes were bought by straw buyers, who each bought two homes using 100 percent financing. The homes were converted for use as large-scale, indoor marijuana manufacturing operations.
Dickson Hung obtained personal identification information from Karen Lee, Ngai Hung, Wayne Feng, Wing Chan and other straw buyers and gave it to Giang for use in the mortgage loan application packages. Giang prepared and submitted false loan applications and other related loan documents to the financial institutions and mortgage lenders on behalf of the straw buyers. The loan applications and other documents contained false representations and omissions regarding the borrower's monthly income, employment history, rental history, assets, and intent to reside at the residence.
Once the homes were purchased, the organization cut into the main electrical lines and bypassed the electrical meter, creating their own circuit boxes. It was estimated that each house stole approximately $4,000 in electricity every month. Most of the homes went into foreclosure. As a result of the scheme, Giang was responsible for a total loss of $7,280,167.
Operation Marvin Gardens began in June 2006, when the Elk Grove PD received a citizen tip about suspicious activity at a residence in the Elk Grove. Between August 2006 and February 2007, citizen tips and follow-up investigation led to the seizure of many indoor marijuana grows in residential neighborhoods in Elk Grove, Sacramento, Stockton, Lathrop, Tracy, Modesto and Mountain House. Operation Marvin Gardens has led to multiple indictments of defendants from the San Francisco Bay Area.
Assistant United States Attorneys Heiko P. Coppola and Todd Pickles prosecuted the case.