DEA and IRS Team up in Medical Pot Asset Seizure

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It was not your average bank levy. The Drug Enforcement Administration and the Internal Revenue Service collaborated to seize the bank account of El Camino Wellness Center this week. The government was after more than $800,000 that had been deposited over a period of a few months by El Camino, Sacramento’s largest medical marijuana dispensary. However, according to the Sacramento Bee, the government will only retrieve a fraction of that amount because the money is just not there.

The government raided the pot shop as well as the homes of the owners. They are being investigated for money-laundering and conspiracy to distribute a controlled substance.

Just how does the IRS become involved in the highly controversial medical marijuana industry? Although California has “legalized” marijuana for medical purposes, it is still illegal and considered a controlled substance under federal law. This particular pot shop was set up as a nonprofit organization, but the feds believe that this designation is a sham and the shop is in the business of making boat-loads of money off marijuana sales and then hiding the profits. And failure to report profits usually means failure to pay taxes; that’s how the tax problems emerge.

El Camino is just another casualty in the ongoing tensions between the federal and local governments on the issue of medial marijuana. The feds almost always win.

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