Pubdate: Fri, 24 Jun 2011
Source: Helena Independent Record (MT)
Copyright: 2011 Helena Independent Record
Author: Eve Byron, Independent Record


Three Helena men were arraigned in federal court in Missoula Thursday
on 25 counts, including charges of manufacturing, distributing and
possessing marijuana, as well as money laundering and conspiracy.

Jason Burns, 38, Joshua Schultz, 38, and Jesse Leland, 40, were
indicted by a grand jury this week and face a mandatory minimum of
five years in prison, and up to 40 years, as well as up to a $5
million fine, if convicted of the charges. A trial date is set for
Aug. 8 in Helena in front of U.S. District Court Senior Judge Charles

All three defendants pleaded not guilty to the charges, and were
released with special conditions, including the need to check in
regularly with their attorneys.

The three men owned nurseries and businesses in Helena, Belgrade and
Great Falls, known as Queen City Caregivers and Natural Medicine,
which were part of statewide raids of medical marijuana businesses
operating in Montana. After an 18-month investigation, 26 search
warrants targeting seven medical marijuana businesses were executed
March 14, with federal agents looking for evidence of large-scale
trafficking as well as tax evasion.

Assistant U.S. Attorney Jessica Fehr declined to say whether any other
indictments are pending, saying that information isn't released until
individuals are arraigned.

Montana voters approved a ballot initiative in 2004 allowing for
medical marijuana use, and currently more than 30,000 residents hold
cards that allow them to legally possess the drug in the state. The
2011 Legislature passed measures to try to curtail its use, saying
they feared it was being abused by youths. That legislation is
currently being litigated.

While marijuana is considered a Schedule I controlled substance by the
federal government, a memo by former Deputy Attorney General David
Ogden seemed to imply that the Department of Justice had decided that
prosecuting the medical marijuana industry was a low priority and the
number of large marijuana nurseries and distribution organizations
exploded in Montana.

However, the so-called Ogden memo went on to state that "prosecution
of commercial enterprises that unlawfully market and sell marijuana
for profit continues to be an enforcement priority of the Department,"
which many say led to the Montana raids.

"Today's indictment is a step toward ensuring the alleged large-scale
distribution of the addictive and dangerous gateway drug of marijuana
(is) curtailed in the state of Montana," Montana's U.S. Attorney
Michael Cotter, said in a statement. "I am grateful to all of the
agencies and attorneys throughout the state that are involved in the
investigation and prosecution of this case."

The indictment charges the men with one count each of conspiracy and
marijuana manufacturing; three counts of distribution and possession
of marijuana; and 20 counts of money laundering.

The money laundering counts range in amounts from $1,000 to $19,985,
and total $233,510. They seem to involve transfers by Schultz from one
bank account to another.

The indictment alleges that at least $1,364,000 was received by the
men in exchange for the manufacture and distribution of controlled
substances, or is traceable to those actions, and wants the money
forfeited. The government also is asking for the forfeiture of a 2001
Mercedes E320; $7,135 in currency seized from the Great Falls
business; $2,829 in a bank account; and any other money or funds
credited to Burns' Queen City Caregivers bank account. The business
operated at 1236 Birch St. off of Montana Avenue in Helena.
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