A San Juan Ridge man who pleaded guilty to federal money-laundering and marijuana cultivation charges was sentenced Wednesday to 49 months in prison.
Charles Miller Hilkey’s legal woes date back to a September 2009 arrest, when a multiagency raid on a number of properties uncovered approximately 475 marijuana plants, 135 pounds of processed marijuana and $200,000 in cash.
Approximatley 100 of those plants were later determined to belong to another defendant, said Assistant U.S. Attorney Michael Beckwith.
Hilkey was the organizer of a well concealed and well funded marijuana operation, Beckwith said.
He had several marijuana grow sites under his control, he used straw owners to separate himself from a number of those grows, and he regularly used underlings to sell his marijuana, bringing in tens of thousands of dollars with each sale. Between 2006 and 2009, he structured at least $859,000 in numerous transactions with one or more domestic financial institutions, usually post offices in Nevada County, Beckwith said.
“It was a long haul,” Beckwith said of the more than three-year-long case. “A lot of that had to do with the IRS’ financial investigation. There was a lot of detail, a lot of forfeitures. It just took a lot of time to work through that.”
Beckwith added that Hilkey’s habit of hiring new attorneys also slowed the case down “considerably”; since his indictment more than three years ago, Hilkey has been represented by more than a half-dozen different attorneys.
Hilkey pleaded guilty in February of this year to conspiring with others to cultivate more than 200 marijuana plants and to structuring financial transactions to avoid federal reporting requirements.
He agreed to forfeit 25 different properties in Oregon and California with a combined value of more than $2.4 million; a potential sentence of 57 to 71 months was expected to be reduced in exchange for the forfeiture.
Hilkey’s attorney, William Portanova, argued for less than a required five-year minimum sentence because of the voluntary forfeiture, writing in a motion that the forfeiture was an “extraordinary punishment” and that Hilkey was “paying a heavy price” for his conduct.
Portanova could not be reached for comment Wednesday afternoon.
Beckwith said Wednesday that the 49-month sentence handed down by U.S. District Judge Lawrence K. Karlton was “right in the ballpark of what we were talking about.”
According to Beckwith, Hilkey deliberately structured his pot operation in order to avoid a more stringent sentence.
“He was sophisticated in that he never grew a large amount of plants,” Beckwith said. “That’s why we focused on the forfeitures. His M.O. was to have a number of properties in other people’s names and grow 30 to 50 plants per property.”
Over the years, Beckwith said, Hilkey accumulated a lot of money that way — but minimized his risk from a sentencing standpoint.
Several claims had been made on some of the properties that were set to be forfeited, but two of those “straw owners” have waived their claims, Beckwith said.
“There is still one outstanding claim that is yet to be resolved,” he said.
Hilkey was taken into custody following the hearing. His two co-defendants — Rachelle Garnitz and Bram Lewis — are set for sentencing Jan. 29. According to Portanova. They both pleaded guilty to money laundering and likely will be sentenced to nine months in prison.
To contact Staff Writer Liz Kellar, email firstname.lastname@example.org or call 530-477-4229.