Federal authorities in California on Thursday announced charges against 18 people they said operated a lucrative marijuana-growing operation by converting Central Valley homes into high-tech pot nurseries.
They estimated the value of the marijuana crop at nearly $100 million a year.
All suspects are from the San Francisco Bay area. Nine were arrested early Thursday on drug and real estate fraud charges, while the others remain fugitives, said U.S. Drug Enforcement Administration agent Casey McEnry.
Thursday's actions bring to 34 the number of people who have been charged in an investigation dating to 2006 and 2007. At that time, law enforcement agents discovered 24,500 marijuana plants growing inside 50 converted homes in Sacramento, Elk Grove, Lathrop, Modesto, Stockton and Tracy.
The operation would have produced nearly 11 tons of high-grade marijuana each year with an estimated street value of $96 million, said Gordon Taylor, who heads the DEA's Central Valley office.
Homes in subdivisions
Prosecutors said the growers bought homes for between $400,000 and $600,000, most in subdivisions that were new or a few years old. They then punched out interior walls, installed expensive ventilation and hydration equipment, and tapped power lines to grow thousands of plants.
Agents said the growing systems alone cost tens of thousands of dollars for each home.
Officer Chris Trim of the Elk Grove Police Department south of Sacramento said it took federal agents and Internal Revenue Service investigators several years to work their way up the chain and through real estate documents.
"Any time you're dealing with a level of operation that's very sophisticated, it's going to take time," Trim said. "They were able to track down those persons that were directly responsible."
After the initial raids, federal authorities charged 17 lower-level operatives they described as gardeners and caretakers. Fifteen have pleaded guilty, while two remain fugitives.
Suspect at large
The charges brought Thursday targeted those who prosecutors believe orchestrated the operation. One person who was charged in the initial round remains a fugitive and was charged again on Thursday in a superseding indictment.
DEA officials previously said the grow houses appeared connected to a San Francisco-based organized crime ring.
The mortgage fraud portion of the operation cost lenders millions of dollars, said Scott O'Briant, the agent in charge of IRS criminal investigations in Northern California. Once homes were raided, the suspects abandoned them and stopped paying the mortgages, sending the homes into foreclosure, he said.
Among those charged is Dickson Hung, 35, of San Francisco, a licensed real estate agent. O'Briant said Hung and four associates arranged the purchase of many of the homes that were used to grow marijuana. They often used straw buyers to defraud financial institutions, he said.