Marijuana banking memos from feds don't solve all problems, advocate says

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Documents and more below.
Ever since the passage of Amendment 64 in November 2012, officials and industry members alike have been concerned about the restrictions related to marijuana businesses and banking services. That's because federal financial regulations essentially treated any transaction from such operations as money laundering. Now, after months of encouragement from Governor John Hickenlooper and others, the Departments of Justice and Treasury have issued joint memos setting out new rules; read them below. However, at least one industry representative isn't wholly satisfied by them.

The Justice Department memo is written by Deputy Attorney General James Cole, who also authored guidance for U.S. Attorneys in the wake of Amendment 64 becoming law. But the meat of the proposal is sketched out in the Treasury Department document, catchily entitled "BSA Expectations Regarding Marijuana-Related Businesses," with "BSA" standing for "Banking Secrecy Act."

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Deputy Attorney General James Cole.
As you can see below, the document as a whole is complex. In general, though, the memo gives banks permission to offer financial services to legal marijuana businesses. But it also requires them to submit filings -- they're known as "Suspicious Activity Reports," or "SARS" -- on such transactions.

The filings fall under three categories, with the distinctions between them dictated by a bank's sense of whether they're wholly legit or if they might violate the law in ways Cole outlined last year.

Category one is called "Marijuana Limited." It's explained in the following excerpt:

A financial institution providing financial services to a marijuana-related business that it reasonably believes, based on its customer due diligence, does not implicate one of the Cole Memo priorities or violate state law should file a "Marijuana Limited" SAR. The content of this SAR should be limited to the following information: (i) identifying information of the subject and related parties; (ii) addresses of the subject and related parties; (iii) the fact that the filing institution is filing the SAR solely because the subject is engaged in a marijuana-related business; and (iv) the fact that no additional suspicious activity has been identified. Financial institutions should use the term "MARIJUANA LIMITED" in the narrative section.
Category two is called "Marijuana Priority:"
A financial institution filing a SAR on a marijuana-related business that it reasonably believes, based on its customer due diligence, implicates one of the Cole Memo priorities or violates state law should file a "Marijuana Priority" SAR. The content of this SAR should include comprehensive detail in accordance with existing regulations and guidance. Details particularly relevant to law enforcement in this context include: (i) identifying information of the subject and related parties; (ii) addresses of the subject and related parties; (iii) details regarding the enforcement priorities the financial institution believes have been implicated; and (iv) dates, amounts, and other relevant details of financial transactions involved in the suspicious activity. Financial institutions should use the term "MARIJUANA PRIORITY" in the narrative section to help law enforcement distinguish these SARs.
Finally, there's "Marijuana Termination:"
If a financial institution deems it necessary to terminate a relationship with a marijuana-related business in order to maintain an effective anti-money laundering compliance program, it should file a SAR and note in the narrative the basis for the termination. Financial institutions should use the term "MARIJUANA TERMINATION" in the narrative section.
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Michael Elliott.
At first blush, this record-keeping seems onerous and dripping with potential liability -- perhaps so much so that banks may still shy away from working with marijuana businesses. That appears to be among the concerns of Michael Elliott, the Marijuana Industry Group's executive director. Moments after the memos' release, he issued the following statement:
"MIG's members are pleased the Justice and Treasury Departments and President Obama take seriously the banking crisis and the public safety issues it has created. We thank them for their attention to this problem. We hope today's guidance will give banks the comfort they need to begin doing business with the legal marijuana industry in Colorado.

"It is imperative that this legal industry have access to banking the same as every other business sector in Colorado. To continue doing business on a largely cash basis creates serious safety issues for owners, employees and customers.

"While we believe today's guidance should provide banks some of the assurances they need to begin doing business with the marijuana industry, it doesn't solve all the problems.

"We implore Congress to quickly address this critical public safety issue and pass HR 2652, the Marijuana Business Access to Banking Act, sponsored by Colorado Congressman Ed Perlmutter. Congressman Perlmutter's bill will provide certainty for banks and allow our industry to operate just like any other business.

"It is imperative that Congress not view today's guidance as the ultimate solution to this public safety crisis. Congress must act quickly to solve the problem before we witness a tragedy."

Continue to read the memos from the Departments of Treasury and Justice in their entirety.

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35 comments
DonkeyHotay
DonkeyHotay topcommenter

Update: Federal Raids on Colorado Pot Shops -- Money Laundering and more.


On Nov. 21, federal agents executed search warrants on 14 businesses and two homes in the largest raid ever on Colorado's medical marijuana industry.

In a recent court filing, federal prosecutors describe Gerardo Uribe in different terms — as the head of an organization targeted in a long-term investigation into the alleged illegal production and distribution of marijuana, money laundering and other offenses.

Sources told The Denver Post that the raids were chasing possible connections to Colombian drug cartels, although investigators haven't publicly accused any of the businesses of wrongdoing. The raids gutted grow warehouses, cost businesses millions in inventory, and forced owners to close stores and lay off employees

Among the Uribes' raided businesses was VIP Cannabis in Denver, thought to be one of the highest volume dispensaries in the state.

The individuals involved include Uribe's father, brother and a cousin; a Denver lawyer who represented the Uribe businesses and became an owner himself; and a Cuban national locked up in a Florida prison who used to work in one of the raided dispensaries and allegedly tried to order a hit on one of the owners, according to court records.


At the raided home, authorities seized five assault rifles, one shotgun, five handguns and thousands of rounds of ammunition. There was no mention of how the guns were acquired, although a lawyer for the Uribes' businesses said they were purchased legally.

One of the home's occupants was 49-year-old Hector Diaz, who had caught investigators' attention because of an e-mail they obtained depicting a photo of Diaz holding two semi-automatic weapons and wearing a Drug Enforcement Administration cap.

The court filing said evidence suggests Diaz may be a shadow investor who has provided funding from Colombia to help buy at least one large warehouse in Denver for growing marijuana.

Diaz, however, told investigators he had recently wired $422,000 from Colombia to a Colorado bank account to purchase a warehouse for a metal structuring business to manufacture concertina wire, or coiled barbed wire. Diaz told authorities he owned a stake in the business, formed in July, along with Gerardo Uribe Sr. and Gerardo Uribe Jr.


.


FreeTheWeed
FreeTheWeed

Boulder medical marijuana raid target has few links to other targets

http://www.denverpost.com/marijuana/ci_25153892/boulder-medical-marijuana-raid-target-has-few-links

Laszlo Bagi said he got into the marijuana business partly out of desperation.

In 2009 and 2010, as the economy crippled the heating and cooling business he has long owned, Bagi needed a new venture. Flush with warehouse space at an industrial park he owns at the base of the foothills north of Boulder, Bagi went into marijuana even though, he said, he doesn't know a thing about growing the plant and doesn't use it.

DonkeyHotay
DonkeyHotay topcommenter

Feds to Banks -- You can do business with Drug Dealing Criminal Cartels, as long as you Report and Record each and every act of Criminal Money Laundering they commit on a Suspicious Activity Report (SAR) , 


... and for those transactions over $10k in $$, file a Currency Transaction Report (CTR) -- flagging it as proceeds from criminal activity -- with the US Dept. of Treasury / IRS Criminal Investigation Division.


                               *** Regulation Works !! ***

KathleenChippi
KathleenChippi topcommenter

So another federal memo that offers no real protection. And who is
getting protection anyway? Not the MJ business owners, but banks...And
why such a to do when the banks have been found guilty in the court of
law for laundering hundreds of billions for drug cartels....sex slave money....human trafficking...slavery.....to BIG TO JAIL.....

"How a big US bank laundered billions from Mexico's murderous drug gangs"
http://www.theguardian.com/wor... ... drug-gangs

"Sweetheart settlement for HSBC bank on drug money laundering charges"
https://www.wsws.org/en/articl... ... c-d13.html

"Wells Fargo: Your Neighborhood Mega-Money Laundering, Drug War Profiteering, Prison-Industry Enlarging Bank"
http://www.alternet.org/econom...
"Wells Fargo is one big elite networking operation that's not afraid to get its hands covered in blood money."

In months not a single mention from the feds on how to make it legal on the business owners side of things....just big banks who have excellent experience in laundering drug money, were deemed to big to fail, and owe the feds one for the lenient 'penalties' over billions in blood money laundering they that participated in for decades. Looks like the feds want the large amounts of money back in the banks so it's easier to seize from business owners who can still be charged with RICO laws.....

sweetcookies3333
sweetcookies3333

the greatest plant in the universe is almost free, LET FREEDOM RING!!!13


marijuana is California’s #1 crop, yet it’s illegal in the backwards USA


from 0 states to half the country, from low 20% approval to almost 70%, cali runs this planet by 2 decades,  time to tie marijuana to the 2014, and 2016 elections


20 years behind us southern states, sad and scary....nobody denies freedoms like the south, nobody...even if marijuana reforms did pass the republiCANTS in charge would deny you all your freedoms, centuries of practice...no matter though, we never planned on getting your backwards brethren from day one, half the country already but not one southern state, lol...


love and freedom forever. another huge step to freedom


AMERICA'S WAR ON DRUGS IS A WAR ON AMERICANS!!!33

DonkeyHotay
DonkeyHotay topcommenter

Nice of that simpering retard and MIG pig Mike Elliot to once again publicly state and declare that his Greedy Big $$ Dispensaries do in fact create  "public safety issues", are "problems" in the way they operate creating "serious safety issues" to employees and customers and are "tragedies" waiting to happen.


Noted.

DonkeyHotay
DonkeyHotay topcommenter


Category two is called "Marijuana Priority:"


A financial institution filing a SAR on a marijuana-related business that it reasonably believes, based on its customer due diligence, implicates one of the Cole Memo priorities or violates state law should file a "Marijuana Priority" SAR. 

Let's take a look at how many of the Cole Memo priorities the average Marijuana Dispensary VIOLATES in Colorado --



1) Preventing the distribution of marijuana to minors; 


Check! ... Medical Marijuana Dispensaries DO sell and distribute to minors



2) Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; 


Check! ... Marijuana Dispensaries ARE Criminal Enterprises, many are members of Dispensary Cartels.


3) Preventing the diversion of marijuana from states where it is legal under state law in some form to other states; 


Check! ... the Recreational Dispensaries are TARGETING Out-of-State suckers and chumps.


4) Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; 


Check! ...  see above.


5) Preventing violence and the use of firearms in the cultivation and distribution of marijuana; 


Check! ... many dispensary owners and operators possess firearms during the course of their illegal drug dealing, there are even armed para-military goons offering their armed services to dispensaries.


6) Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; 


Check! ... as the stoners DRIVE to and from the Dispensaries to score their weed, and given that many "medical" patients are chronically over the 5 ng/ml limit.



7) Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands;


The only one that Dispensaries are not violating.


8) Preventing marijuana possession or use on federal property.


Check! ... many Ski Resorts are located on Federal Forest lands.


Cognitive_Dissident
Cognitive_Dissident topcommenter

Sounds like a model for how all banking transactions will be handled in the future of this police state.

putitinthebank
putitinthebank

It's time for the businesses to start their own bank and they have the money to do it.  Perhaps they could give out micro loans and start a new model of banking.

DonkeyHotay
DonkeyHotay topcommenter

LOL!! ... filing SARs which DOCUMENT the CRIMINAL FELONY MONEY LAUNDERING by the Continuing Criminal Enterprises known as Marijuana Dispensaries !!


Federal Money Laundering which carries 20 Years in Prison -- on EACH COUNT !!


               *** Get REGULATED, Bitches! ***


Don't worry, the Feds will NEVER change their position and actually prosecute -- http://www.canorml.org/costs/federal_medical_marijuana_prisoners_and_cases

Monkey
Monkey

Sure, we'll let banks launder your money, as long as the bank records every transaction as "suspicious". 

Do you fools really not understand what this means? The banks will be narcing you off every transaction you make, relieving them from liability, and documenting a pattern of continued criminal activity. Good for the banks, because they are assisting the feds, instead of assisting drug dealers laundering money. But not so good for the businesses, who now have the MED, local law enforcement, and their own bank working with the feds.

Hide your money, stop paying taxes, claim a loss, and buy armored vehicles to transport your illegal earnings. Take a cue from the cartels you emulate, you don't see them providing a list of criminal offenses to authorities, because they have enough sense to know that's stupid.

DenverLibTardLover
DenverLibTardLover

This a good thing. Large amounts of cash invites robbery, tax evasion,, and other crimes. These 'directives' from Obama could all disappear in 2016 when we elect a conservative president. If this happens, the stores will go back to cash and the state thugs will begin throwing grenades through retail store window's again. Just like that.

possessionlaws
possessionlaws

This seems like substantial progress, and at least a serious attempt to address the problem, despite some flaws. Perhaps it can be tweaked with input from MIG, and hopefully it will actually pass.

Josh Murphy
Josh Murphy

They use "SAR" (Suspicious Activity Report) a few too many times in here for me to be comfortable if I was a grower/supplier/retailer

DonkeyHotay
DonkeyHotay topcommenter

The Uribes acquired an interest in another marijuana business — a grow in north Denver operated under the name Elizabeth's End — in August 2012. By November of that year, the brothers, through Gerardo and a business they own called Herbology, owned 85 percent of the grow, plus 94 percent of a connected dispensary.

Their new share came from Jared Bringhurst, who was the businesses' previous majority owner, according to a lawsuit Bringhurst and the two remaining minority owners — Anthony Nuccio and Jesse Benitez — are pursuing against the Uribes and their associate Felix Perez. Bringhurst, Nuccio and Benitez all say the Uribes and Perez owe them money.

The lawsuit also previously alleged that 
the Uribes and Perez were suspected of hiding profits and product from their marijuana businesses and selling marijuana out of state


MMED = the most incompetent, impotent, corrupt and wasteful division of the DOR.

DonkeyHotay
DonkeyHotay topcommenter

McShyster David Furtado also has been the target of lawsuits.


In 2011, a Douglas County woman who said Furtado set up a marijuana growing operation in her garage sued Furtado, Gerardo Uribe, Solano and others, alleging she was misled.

Furtado acknowledged setting up the grow even though it was against Douglas County rules but denied misleading the woman, Roddess Ekberg. Furtado eventually was awarded more than $600,000 after Ekberg failed to respond to his counter claims, records show.

Ekberg also was a grower for a dispensary called Daddy Fat Sacks. In 2011, dispensary owner and president Larry DeVillier notified Denver city officials he was closing the business and was no longer affiliated with Furtado, who had an ownership stake in the dispensary.

DeVillier wrote that Furtado "is unethical and I have reason to believe that his practices in the marijuana business are illegal."


Furtado said VIP Cannabis' flagship store at South Federal Boulevard and West Alameda Avenue brought in about $9 million in 2013 before the raid.


*** 

So if VIP didn't file returns declaring $9 MILLION and pay taxes on $9 MILLION, they'd be guilty of TAX EVASION. With "lawyers" like this, who needs the IRS CID?

DonkeyHotay
DonkeyHotay topcommenter

Lawyer David Furtado describes himself as a "people's attorney" who keeps his fees low, began representing the Uribes in their business dealings, bought stakes in a dispensary and a grow, and now wants out after being identified as one of the targets of November's raids.


"Can you imagine my embarrassment?" said Furtado, 48. "Can you imagine my shame? I don't want to be defending myself. I just want to get rid of these things. If it means I need to stand on my head and spit nickels, I'll do it."



Translation -- He'll SNITCH on his own clients to avoid Federal prison


HipTip: when your lawyer commits federal crimes with you, you no longer have an attorney, you have a co-defendant and future cellmate.



hth




FreeTheWeed
FreeTheWeed

"Bagi went into marijuana even though, he said, he doesn't know a thing about growing the plant and doesn't use it."

LOL! ... Priceless!

DonkeyHotay
DonkeyHotay topcommenter

A weapons charge from those raids provides more details.


The court filing said evidence suggests Hector Diaz may be a shadow investor who has provided funding from Colombia to help buy at least one large warehouse in Denver for growing marijuana.


Diaz, however, told investigators he had recently wired $422,000 from Colombia to a Colorado bank account to purchase a warehouse for a metal structuring business to manufacture concertina wire, or coiled barbed wire. Diaz told authorities he owned a stake in the business, formed in July, along with Gerardo Uribe Sr. and Gerardo Uribe Jr.

Agents have not found information to back up Diaz's claim that he is in the barbed-wire business, according to the court filing.

Diaz was charged with a single count of possessing a firearm after having been admitted to the United States under a non-immigrant visa. He could face up to 10 years in prison if convicted.


In brief comments standing at the entrance of VIP Cannabis, Uribe said he believed a large bank deposit triggered the raids.


Furtado said VIP Cannabis' flagship store at South Federal Boulevard and West Alameda Avenue brought in about $9 million in 2013 before the raid.


When Uribe has been sued over a debt, it was sometimes "because he overestimated his ability to earn money," Furtado said.

Furtado also has been the target of lawsuits.

In 2011, a Douglas County woman who said Furtado set up a marijuana growing operation in her garage sued Furtado, Gerardo Uribe, Solano and others, alleging she was misled.

Furtado acknowledged setting up the grow even though it was against Douglas County law but denied misleading the woman, Roddess Ekberg.

Ekberg also was a grower for a dispensary called Daddy Fat Sacks.


***

I

DeVillier wrote that Furtado "is unethical and I have reason to believe that his practices in the marijuana business are illegal."


Another lawsuit also alleged that the Uribes were suspected of hiding profits and product from their marijuana businesses and selling marijuana out of state.


Lawyer David Furtado describes himself as a "people's attorney" who keeps his fees low, began representing the Uribes in their business dealings, bought stakes in a dispensary and a grow, and now wants out after being identified as one of the targets of November's raids.

"Can you imagine my embarrassment?" said Furtado, 48. "Can you imagine my shame? I don't want to be defending myself. I just want to get rid of these things. If it means I need to stand on my head and spit nickels, I'll do it."

***


Translation -- he'll soon SNITCH on his own clients!


HipTip: If your "attorney" engages in criminal activity with you, you no longer have a lawyer, you have a co-defendant and future cellmate.

KathleenChippi
KathleenChippi topcommenter

@DonkeyHotay thanks for pointing out how a sting operation works for everybody.  

DC MPP wrote A64 with vague language that allows the state general assembly to be heavily lobbied by already wealthy people and their friends to pass language that sets everyone up for federal charges.......a small group, selling LOTS of (federally illegal) cannabis, requiring large grows....and this memo doesn't eliminate the last memo's that say the feds will focus on size/volume......and then the regulators DoR/MED FAIL to enforce state law for years......which will require federal intervention....at least on paper and in the courts it's all still very illegal....A64 working as planned.

DonkeyHotay
DonkeyHotay topcommenter

@RustyShackleford  ... they'd still need access to Federally Regulated EFT / Credit / Wire systems, etc, and would still be required to comply with Anti-Money Laundering regulations.


hth.

DonkeyHotay
DonkeyHotay topcommenter

@KathleenChippi


Each and EVERY $$$ Deposit made by the Marijuana Dispensaries is a separate count of Federal Criminal Money Laundering -- accompanied by the requisite SAR documenting it for future prosecution -- and each and every count of a criminal Money Laundering indictment is punishable by 20 (twenty) YEARS in Prison!!


Those Greedy Big $$ Dispensary Cartel Pigs better hope and pray that No Repuglycan ever gets elected to the White House ever again.


             *** REGULATION WORKS!! ***

DenverLibTardLover
DenverLibTardLover

@DonkeyHotay @DenverLibTardLover  The feds treat humanity as a whole as a 'continuing criminal enterprise', hence the NSA spying on all of us. I wouldn't put too much weight on anything this government or law enforcement says. 

DonkeyHotay
DonkeyHotay topcommenter

@TheCosmos ... a DEMOCRACY gets the Government it DESERVES i.e. elects!


Why do you hate the American People who repeatedly ELECT jack-booted thugs to political office?



TheCosmos
TheCosmos

@DonkeyHotay @DenverLibTardLover  You don't have to love your government to love your country. The Constitution was very thorough in pointing this out. A police state deserves no love from the American people. 

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