Aaron Sandusky, who federal prosecutors said used the perceived ambiguity of Californias medical marijuana laws to create an illegal, for-profit operation that included a cultivation warehouse in Ontario and dispensaries in Moreno Valley, Upland and Colton, was sentenced to 10 years in prison Monday, Jan. 7.
Sandusky, 42, of Rancho Cucamonga, was the co-founder and owner of G3 Holistics. He was convicted in October of conspiracy and possession with intent to distribute hundreds of pounds of marijuana, prosecutors said. The amount was derived from the jurys finding that each count involved at least 1,000 marijuana plants.
Investigators alleged G3 used California's medical marijuana laws as a cover for an illegal grow-and-sell operation instead of a nonprofit cultivation collective for those with a doctors recommendation to use marijuana, as allowed by Californias Prop. 215 and subsequent state laws regulating medical marijuana.
Federal prosecutors in California said in late 2011 they would begin investigating dispensary operations they believed were skirting the states regulations.
Under federal law, marijuana is an illegal drug in all circumstances.
Federal agents and other investigators claimed those who became G3 customers were not involved in cultivation. Instead, the supply of marijuana came from the growing operation in the Ontario warehouse.
In a civil forfeiture complaint, the government claimed that a forensic investigation by the IRS identified 19 bank accounts linked to G3 Holistics Inc. or individuals connected with it. The accounts had received $3.3 million in deposits during an eight-month period in 2011, with withdrawals nearly equaling that amount. The IRS concluded it was to make G3 appear to be a nonprofit organization.
Government attorneys said in a sentencing memorandum that Sandusky had no altruistic goals in establishing G3 Holistics, but instead used it to replace the income he lost in the collapse of his real estate business.