According to news reports, FBI agents have been posing as medical-marijuana
business investors as part of larger ploys to investigate political pay-to-play
schemes. One in particular – an agent who utilized the alias “Mike
Sweets” as part of FBI operations – has been involved in two
investigations to date. On both occasions, the federal agent used the
same name and cover story as part of his role in the stings.
The first involved California State Senator Leland Yee of San Francisco,
along with several other individuals.
According to the Tallahassee Democrat, Sweets “told Yee he was an Arizona resident involved in the medical
marijuana business who wanted to be the ‘Anheuser Busch’ of
medical marijuana in California” and that he was seeking legislation
that would “regularize the industry” in a manner that conformed
with his business model.
According to later federal reports, Sweets portrayed himself as a “very
blunt-speaking entrepreneur” – one who did not hesitate to
overtly offer payment in return for favorable action, including telling
Yee that he would readily pay for face time with lawmakers. In total,
Sweets gave at least $26,000 to Yee in illegal funds, for which Yee was
later sentenced to five years in prison.
The second appearance of Mike Sweets came this year, during what is believed
to have been a similar sting operation targeted at exposing political
corruption in Tallahassee, FL. Its head was an individual named Mike Miller,
who posed as an entrepreneurial investor from Atlanta. Miller was frequently
accompanied by two other individuals while meeting with politicians –
one of whom would introduce himself as Sweets and bore a striking resemblance
to the man involved in the San Francisco sting a only few years earlier.
In the Tallahassee operation, Sweets claimed to be a “medical marijuana
entrepreneur from out west” and did not hesitate to “spread
cash around,” explaining that he “couldn’t put it in
a bank,” the
Democrat reported. Then, as suddenly as they had appeared, the trio disappeared –
and a series of federal subpoenas followed.
Two of those subpoenas were delivered to individuals involved in Florida’s
medical marijuana industry. The first was Kim Rivers, the owner a cannabis
business, and the second was Adam Corey, a marijuana lobbyist in the area.
According to the
Democrat, Corey flew to Arizona to have dinner with Sweets this past April, and
he had met with the agent posing as Mike Miller beforehand as well.
Federal agents posing as a marijuana investor is something straight from
the 1980’s War on Drugs playbook. As I have continually cautioned
my clients in this industry teeming with investment opportunities, be
a good Boy Scout. Ensuring that your investors are accredited –
and that your business plan is fully state and federally compliant with
all securities related laws is a must. Consult with your securities attorney
early and often. If you are in the cannabis industry be trustworthy and
honest. Pay your taxes like a good Boy Scout and most of all – BE PREPARED.
Charles Feldmann is the Managing Partner of Feldmann Nagel Margulis and advises
clients in the cannabis industry across a multitude of states and internationally.
Contact him at Feldmann-Nagel.com.