IRS leads pot bust
The Internal Revenue Service’s criminal investigation branch led a multi-agency marijuana bust Tuesday in Nevada County, which reportedly involved several marijuana farms off Chalk Bluff Road between Highway 20 and Red Dog Road, about 11 miles east of Nevada City.
Nevada County Sheriff’s deputies and investigators from other agencies joined in the busts, which mirrored a large sweep conducted at nearly the same time last year – during harvest season – on the San Juan Ridge. A California Highway Patrol helicopter was scouting the area.
A spokesman confirmed the IRS was participating in a multi-agency operation, but declined to comment further Tuesday afternoon.
“We are on official business and, unfortunately, at this time we are not able to provide any additional information,” said IRS Criminal Investigation Special Agent in Charge Scott O’Briant.
The IRS was involved in the lengthy investigation that led to the arrest of Charles Hilkey Jr., 55, in September 2009. Almost 200 law enforcement officers and agents raided nine locations on property belonging to Hilkey on the Ridge, allegedly finding 602 marijuana plants, 135 pounds of processed marijuana and $200,000 in cash. A criminal investigator from the IRS analyzed Hilkey’s financial documents, which allegedly revealed money laundering designed to conceal narcotic-related proceeds.
The IRS alleged Hilkey earned about $1.9 million in profits during the past two years, breaking up large sums into transactions of less than $10,000 to evade reporting requirements.
Hilkey then allegedly used those structured funds to buy property, pay down or pay off mortgages, and pay individuals and taxes. Hilkey also allegedly used associates to help convert currency into money orders or cashier’s checks, and used associates to purchase property.
Hilkey was indicted by a grand jury in U.S. District Court in Sacramento on charges of conspiracy, manufacturing more than 1,000 marijuana plants and conspiracy to launder money.
He pleaded not guilty. He is next set to appear in federal court in Sacramento for a hearing on a motion to suppress evidence on Jan. 10, 2011.
To contact Staff Writer Liz Kellar, e-mail email@example.com or call (530) 477-4229.
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