The Internal Revenue Service has seized bank accounts it says took in more than $870,000 in cumulative deposits in recent months, part of a federal probe into alleged money laundering involving a Sacramento marijuana dispensary.
Agents of the federal Drug Enforcement Administration and the IRS presented search warrants earlier this week on the El Camino Wellness Center, considered the largest medical marijuana provider in Sacramento.
The seizure of bank accounts, detailed in a sealed affidavit obtained by The Bee, underscores an effort by federal authorities to crack down on California medical marijuana dispensaries by employing laws traditionally used to target money transferd by narcotics traffickers.
A June 8 IRS seizure warrant cited federal money-laundering statutes and laws against improper reporting of income to seize bank accounts of the El Camino Wellness Center and its officers, Nicholas Street and Suneet Agarwal. No charges have been filed in the case.
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El Camino Wellness Center opened in 2008 and last year became the first Sacramento dispensary issued a permit under a city regulatory program for medical marijuana outlets. The city is still collecting voter-approved taxes on local dispensaries, amounting to $1.1 million between July 2011 and March of this year.
Mark Reichel, the attorney representing Street and Agarwal, said El Camino Wellness Center was "a flagship for compliance" as a city-regulated medical marijuana provider.
Reichel said federal authorities raided the dispensary and the homes of both men, taking computers, cellphones and business records. In addition to the money-laundering probe, a DEA search warrant affidavit said Street and Agarwal are being investigated for conspiracy to distribute marijuana and maintaining a place for distribution.
"We're going to try to talk to the government and see if we can work things out and explain that these guys were in compliance with state law," Reichel said.
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U.S. prosecutors have said they are targeting marijuana businesses "hijacked by profiteers" that they contend are operating in violation of both federal and state laws – though warrants in the El Camino Wellness case make no mention of California's medical marijuana law.