Feds: Marijuana bought Bellingham man Lamborghini, lavish lifestyle
A Bellingham man accused of financing a lavish lifestyle via homegrown pot surrendered to authorities Tuesday after a federal grand jury handed down a 30-count indictment against him and his purported conspirators.
Investigated since August 2010, Scott Johnson is alleged to have spent the past decade or more growing and selling marijuana. Federal prosecutors in Seattle contend Johnson concocted a series of shell companies to hide more than a million in proceeds from the marijuana ring.
Johnson was indicted Friday along with seven other men alleged to have assisted in the marijuana operation. He surrendered Tuesday, more than two months after investigators with the Drug Enforcement Administration-led task force received permission to search homes and businesses tied to Johnson.
Arraigned Tuesday, Johnson was released on bond after pleading not guilty to the 26 charges he currently faces. Three other men indicted alongside Johnson have also pleaded guilty, while four others have yet to appear in court to face charges.
In addition to charging Johnson, federal prosecutors hope to take ownership of several properties purportedly used in the marijuana ring, as well as dozens of guns, nine cars and a sculpture seized during the investigation.
‘Stinks like dope’
According to investigators, Johnson’s organization had been growing and selling marijuana locally as well as shipping large loads to New York, the Bellingham-based DEA agent told the court.
Two informants went to investigators in August 2010 to report Johnson had been running a complex marijuana growth and distribution operation for more than a decade, the agent said in court papers.
In the months that followed, investigators claim they intercepted an 80-pound shipment Johnson sent to a New York customer, and caught Johnson selling marijuana to law enforcement. The DEA-led investigation ultimately grew to include State Patrol troopers and officers assigned to a regional drug task force, as well as the paid informants.
Writing the court, the DEA agent claimed Johnson charged customers about $2,600 a pound for marijuana grown at homes and properties around northwest Washington. Johnson is alleged to have given an undercover officer detailed instructions on how to hide marijuana while transporting it across the country.
According to investigators’ statements to the court, the marijuana business was quite lucrative for Johnson. Over five years, more than $1 million moved through one of several bank accounts he controls, and he amassed a large collection of property, cars and guns while living with no verifiable income.
One informer told investigators he or she – the informant’s gender isn’t given in court papers – discovered a box full of cash in the bathroom of a shop associated with Johnson in Bellingham. According to charging papers, the informer asked Johnson if he was “laundering money.”
“Something like that, but it stinks like dope,” Johnson replied, according to court papers.
Prosecutors have asked for a court to order that the defendants surrender seven Bellingham-area homes, as well as a Priest River, Idaho property. Beyond those, though, prosecutors have amassed a lengthy list of demands – $20,000 in cash, 36 guns, one armored vest, a $900 collection of silver coins, 14 gems, nine cars and trucks, seven snowmobiles, three motorcycles, two wave runners, a boat, a forklift, a backhoe, and a bronze sculpture entitled “Under Sea.”
Of course, they’re presumably also interested in securing prison sentences for the defendants, including Johnson. A convicted pot dealer, Johnson faces significant prison time if convicted on any of drug and money laundering counts currently pending.
Money laundering, shell companies alleged
During the years-long investigation, agents tracked several phones belonging to alleged members of the drug ring and conducted a detailed analysis of Johnson’s finances. Court documents indicate agents also watched the homes of several of the defendants.
Investigators contend Johnson used friends and shell businesses to hide his drug earnings.
“Johnson has taken careful measures to (build an artificial wall between himself and his assets,” a U.S. Marshall’s Service investigator told the court.
Johnson claimed he made his living through legitimate businesses. Investigators contend those businesses were shells that only existed on paper to hide hundreds of thousands of dollars in marijuana proceeds.
Investigators assert that Johnson is the de facto owner of five properties purchased in other persons’ names. Those properties are alleged to have been paid for with funds from three shell companies operated by Johnson – R.E. Holdings Investments Corp., Meridian Investment Group Inc. and Crown Investments.
Bank records and, in one instance, an insurance payout show Johnson owns each of the corporations, which in turn own the properties in question, the Marshall’s Service investigator told the court. State records show Johnson and his wife haven’t reported a paycheck to the state since 1998, nor has Johnson filed an income tax return since 2003.
In the past five years, nearly $1.5 million moved through R.E. Holdings, a company that has no verifiable business purpose, the investigator continued. Johnson is alleged to have deposited $76,000 in cash into the account, as well as dozens of sizable checks. Johnson is also alleged to have used the business account to pay cash for a $134,000 Lamborghini sports car in 2006.
Investigators: Parking ticket tied dealer to Manhattan home
Johnson is alleged to have paid drivers $8,000 per trip to move marijuana from a Bellingham condo where it was warehoused. Two men alleged to have driven for him – Barry Veto and Rusty Hendershott – have been indicted on related charges.
Having tracked Hendershott across the country in July 2012, investigators arranged to have him stopped by Ohio State Patrol officers after the motorhome he was driving entered that state. Agents claim to have seized 80 pounds of marijuana from the motorhome, as well as a loaded pistol.
Investigators also claim to have tracked Johnson to meeting at a Manhattan home belonging to one of his customers in March 2012.
As agents looked on, Johnson left the man’s apartment carrying a black briefcase. Agents then followed Johnson’s Mercedes to the Ritz Carlton Hotel at Battery Park, where he was apparently staying. Luxury cars were apparently part of several of Johnson’s visits to New York. On other occasions, he rented a Porsche convertible and a Cadillac; the Caddy was ticketed outside the Manhattan man’s home.
Writing the court in January, the DEA agent claimed Johnson and his cohort were growing marijuana on properties scattered around Whatcom and Skagit counties in northwest Washington.
One Bellingham grow house generated $40,000 to $60,000-worth of marijuana each month, according to court papers. Johnson is alleged to have shared that Kingsmill Street grown with another defendant, James Stuart-Stevenson.
Investigators claim other members of the organization grew marijuana in Alger, Granite Falls, Sedro-Woolley and Blaine. Johnson is alleged to have visited each of the grow locations, several of which were monitored by video for weeks before the homes were searched by authorities in mid-January.
Indictments have been handed down against purported conspirators Jay Wright, John Horgdal, Richard Olason and Vernon O’Brine, in addition to Johnson, Stuart Stevenson, Hendershott and Veto. Each defendant is accused of conspiring to manufacture and distribute marijuana, and most face additional related charges.
None of the four men who’ve appeared in court thus far is currently jailed. Herdershott was arrested Tuesday in Idaho; whether he would remain in custody was not immediately clear.
Trial is currently set for June.
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Levi Pulkkinen can be reached at 206-448-8348 or firstname.lastname@example.org. Follow Levi on Twitter at twitter.com/levipulk.