Pubdate: Sat, 30 Mar 2013
Source: Los Angeles Times (CA)
Copyright: 2013 Los Angeles Times
Contact:  http://www.latimes.com/
Details: http://www.mapinc.org/media/248
Author: Joe Mozingo

MAN SECRETLY OWNED 9 POT STORES

John Melvin Walker is expected to plead guilty to drug and tax evasion charges.

The marijuana shops evoked health and homeopathic care, with names 
like Dana Point Safe Harbor Collective, Belmont Shore Natural Care, 
Alternative Herbal Care and Costa Mesa Patients Assn.

Nine dispensaries in all, they appeared to be run by different owners 
around Orange and Los Angeles counties, little different than any of 
the hundreds of dispensaries that have popped up in the last five years.

But they were secretly owned and operated by a 56 year-old convicted 
drug dealer from San Clemente, who used the stores to make millions.

Federal drug agents say John Melvin Walker, who was arrested in 
October, was one of the biggest players they have prosecuted in 
Southern California's medical marijuana trade. They could recall only 
one similar case, a man who used the proceeds of his seven 
dispensaries to buy land in Costa Rica.

On Monday, Walker is expected to appear at the U.S. Courthouse in 
Santa Ana to plead guilty to two felony counts: conspiracy to 
distribute more than 1,000 kilograms of marijuana and tax evasion. He 
must forfeit more than $25 million in assets, cash and business 
interests - including his Tuscan manor high above the Pacific in San 
Clemente, two homes in Long Beach and four mobile homes in Mammoth - 
and possibly pay $4.3 million in tax restitution.

He faces 10 years to life in prison, but prosecutors say sentencing 
guidelines call for 21 years to 27 years.

The Orange County Sheriff 's Department started the investigation 
with the help of federal agents.

They took the case to the U.S. attorney because federal penalties are 
more severe and federal law is clear - all marijuana possession is 
illegal - avoiding the ambiguity of California's medical cannabis 
laws, which do not directly address whether commercial sales of pot are legal.

Assistant U.S. Atty. Christine Bautista said it was common for 
"drug-traffickers like [Walker] to hide behind the facade of medical 
marijuana laws and compassionate care, to make millions of dollars 
and conceal their identities as the true owners/operators of a string 
of marijuana stores."

She didn't know of any other cases involving so many stores.

"It appeared from evidence that he ran a tight ship," she said. "He 
instituted regular procedures at all nine shops. He regularly visited 
to observe. He required managers to report midday and end-of-day 
figures to him to show cash on hand."

At the Dana Point shop, detectives found spreadsheets showing sales 
over 10 months totaled $3.17 million, with $2.47 million cash on 
hand, according to an affidavit.

When Orange County sheriff 's detectives first conducted searches of 
properties owned by Walker and his cohorts, they were staggered by 
the cash. At a Walker rental in Long Beach, they found $390,160.00 in 
four grocery bags in his garage, along with a shotgun, a Beretta 
handgun and a Chinese AK-47 with a bayonet. At a house in San 
Clemente, they found stacks of bills stuffed in furniture, in an 
Igloo cooler and on an ironing board, totaling about $700,000.

In February 2012, 14 people, including Walker - also known as "Pops" 
- - were indicted on 14 counts and arrested.

The indictment alleged that Walker failed to report any income from 
the shops to the IRS and that he told his bookkeeper "to destroy all 
records pertaining to income generated at the marijuana dispensaries 
shortly after they were generated and not to create records that 
fully identified Walker's connection to the marijuana dispensaries."

According to his plea agreement, he might have to forfeit his 
properties, $535,291 in currency and give up any benefits he got from 
a $700,000 loan he made to a Charles Westlund and Silent Strippers 
LLC, and whatever interests he had in six businesses.

Walker's attorney, Kate T. Corrigan, said Walker is a "devoted family 
man, a very active parent" to young children. She declined to say how many.

"He is completely devastated that he is going to be separated from 
his children, and they'll be separated from him," Corrigan said. 
"They're going to be growing up fatherless."
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MAP posted-by: Jay Bergstrom