Jim Finnel
Fallen Cannabis Warrior & Ex News Moderator
A Westside man convicted last year of possessing and selling hundreds of pounds of pot is now under investigation for tax evasion, according to court records.
Edwin Hoey, 49, pleaded not guilty to five felony counts of filing a fraudulent tax return at the end of July, was released on his own recognizance and returns to court in early September.
The charges carry a 15-year prison sentence.
"I was certainly surprised and disappointed to see them bring these charges. I can't understand why they didn't bring this up during the almost-year that the case was pending," Hoey's attorney, Ben Rice, said. "It seems to me like they were not happy -- law enforcement wasn't happy -- with the outcome of the case and now they're trying to use the same set of facts to get more punishment."
Hoey faced more than 10 years in state prison, but was sentenced in November to a year in County Jail after he pleaded no contest to trafficking marijuana. He served just less than eight months for the crimes, which he said at the time he thought were OK because he was largely selling to medical users through a Santa Cruz medicinal dispensary.
Local law enforcement notified state and federal officials of the possible tax evasion charges in late 2006 or early 2007 because of "the magnitude of the case -- being kind of a big case and there were so many assets involved," said Sgt. Steve Carney of the Sheriff's Office. "Right after the arrest we contacted the state Franchise Tax Board and the IRS. It took them a year to put that case together."
The state Franchise Tax Board conducted an investigation, then turned the case over to the Santa Cruz County District Attorney's Office, according to Carney, who led the initial probe into Hoey's marijuana sales in 2006.
Rice said his client is being prosecuted for the same crimes all over again; Carney disagreed.
"There's no double jeopardy. The tax case is something totally different than selling drugs," Carney said.
Rice, who specializes in marijuana cases at his Santa Cruz law practice, said the tax fraud allegations are unusual and unwarranted in Hoey's situation.
"Now he's putting his life back together and working with his photography and trying to resolve all the forfeiture issues and the tax issues. Now he's got to deal with this. It's most unfortunate. I'm very disappointed," Rice said. "Bottom line it makes no sense to go after him and punish him again."
Hoey, a photographer, was arrested in December of that year after deputies found 100 pounds of pot in his house and $500,000 cash in a storage locker. He remains adamant that most of the marijuana was destined for medicinal users.
Santa Cruz County Superior Court Judge Paul Marigonda signed a $50,000 bench warrant for Hoey's arrest on July 14. He was set to be released from County Jail on the 15th, but had actually gotten out three days early due to good behavior, according to Rice.
"It's just bizarre that they wait until he was due to be released," Rice said. "They got the warrant the same day he was due to be released from jail. Was it a coincidence? I doubt it."
Carney said the state's tax fraud investigation is a lengthy, time-consuming process.
"It takes them a lot longer for them to do the cases," Carney said. "They literally have to do a search warrant for all the bank records and everything related to his income and taxes for those five years."
The five counts of tax evasion Hoey is charged with stem from tax records between 2002-06. The statute of limitations on the charge is five years, according to Carney.
Rice said paying income taxes on marijuana sales is a complicated issue the Legislature needs to clarify. State law, passed in 1996, allows qualified medical users to grow, possess and use marijuana, but doesn't provide a legal way for patients who can't grow pot to buy it. Cooperatives and dispensaries, like those in Santa Cruz, have sprung up to fill that need, even though it's illegal for growers to sell marijuana to them.
"This gray area is very gray, very dark and it's hard for people who want to do this exactly the way they're supposed to," Rice said. "It's hard for people to know how to do it... Hoey has paid his taxes and he's prepared to rectify his tax statements but it's really difficult to know how to do that."
Hoey, a medicinal marijuana user himself, has said he was the middleman for Greenway Compassionate Relief Inc., one of two medicinal marijuana dispensaries in Santa Cruz. Officials from Greenway never confirmed they'd worked with Hoey.
After he pleaded no contest to marijuana possession and sale charges last September, Hoey said his "one mistake" was that he had also sold pot to friends on the East Coast. Sheriff's deputies reported Hoey had shipped marijuana through the US Postal Service to people in 10-15 states, and that many were not medicinal users.
Officials from the District Attorney's Office and the state Franchise Tax Board were not available to comment Tuesday.
News Hawk: User: 420 MAGAZINE ® - Medical Marijuana Publication & Social Networking
Source: San Jose Mercury News
Copyright: 2008 San Jose Mercury News
Contact: Help - San Jose Mercury News
Website: https://www.mercurynews.com/centralcoast/ci_10186079
Edwin Hoey, 49, pleaded not guilty to five felony counts of filing a fraudulent tax return at the end of July, was released on his own recognizance and returns to court in early September.
The charges carry a 15-year prison sentence.
"I was certainly surprised and disappointed to see them bring these charges. I can't understand why they didn't bring this up during the almost-year that the case was pending," Hoey's attorney, Ben Rice, said. "It seems to me like they were not happy -- law enforcement wasn't happy -- with the outcome of the case and now they're trying to use the same set of facts to get more punishment."
Hoey faced more than 10 years in state prison, but was sentenced in November to a year in County Jail after he pleaded no contest to trafficking marijuana. He served just less than eight months for the crimes, which he said at the time he thought were OK because he was largely selling to medical users through a Santa Cruz medicinal dispensary.
Local law enforcement notified state and federal officials of the possible tax evasion charges in late 2006 or early 2007 because of "the magnitude of the case -- being kind of a big case and there were so many assets involved," said Sgt. Steve Carney of the Sheriff's Office. "Right after the arrest we contacted the state Franchise Tax Board and the IRS. It took them a year to put that case together."
The state Franchise Tax Board conducted an investigation, then turned the case over to the Santa Cruz County District Attorney's Office, according to Carney, who led the initial probe into Hoey's marijuana sales in 2006.
Rice said his client is being prosecuted for the same crimes all over again; Carney disagreed.
"There's no double jeopardy. The tax case is something totally different than selling drugs," Carney said.
Rice, who specializes in marijuana cases at his Santa Cruz law practice, said the tax fraud allegations are unusual and unwarranted in Hoey's situation.
"Now he's putting his life back together and working with his photography and trying to resolve all the forfeiture issues and the tax issues. Now he's got to deal with this. It's most unfortunate. I'm very disappointed," Rice said. "Bottom line it makes no sense to go after him and punish him again."
Hoey, a photographer, was arrested in December of that year after deputies found 100 pounds of pot in his house and $500,000 cash in a storage locker. He remains adamant that most of the marijuana was destined for medicinal users.
Santa Cruz County Superior Court Judge Paul Marigonda signed a $50,000 bench warrant for Hoey's arrest on July 14. He was set to be released from County Jail on the 15th, but had actually gotten out three days early due to good behavior, according to Rice.
"It's just bizarre that they wait until he was due to be released," Rice said. "They got the warrant the same day he was due to be released from jail. Was it a coincidence? I doubt it."
Carney said the state's tax fraud investigation is a lengthy, time-consuming process.
"It takes them a lot longer for them to do the cases," Carney said. "They literally have to do a search warrant for all the bank records and everything related to his income and taxes for those five years."
The five counts of tax evasion Hoey is charged with stem from tax records between 2002-06. The statute of limitations on the charge is five years, according to Carney.
Rice said paying income taxes on marijuana sales is a complicated issue the Legislature needs to clarify. State law, passed in 1996, allows qualified medical users to grow, possess and use marijuana, but doesn't provide a legal way for patients who can't grow pot to buy it. Cooperatives and dispensaries, like those in Santa Cruz, have sprung up to fill that need, even though it's illegal for growers to sell marijuana to them.
"This gray area is very gray, very dark and it's hard for people who want to do this exactly the way they're supposed to," Rice said. "It's hard for people to know how to do it... Hoey has paid his taxes and he's prepared to rectify his tax statements but it's really difficult to know how to do that."
Hoey, a medicinal marijuana user himself, has said he was the middleman for Greenway Compassionate Relief Inc., one of two medicinal marijuana dispensaries in Santa Cruz. Officials from Greenway never confirmed they'd worked with Hoey.
After he pleaded no contest to marijuana possession and sale charges last September, Hoey said his "one mistake" was that he had also sold pot to friends on the East Coast. Sheriff's deputies reported Hoey had shipped marijuana through the US Postal Service to people in 10-15 states, and that many were not medicinal users.
Officials from the District Attorney's Office and the state Franchise Tax Board were not available to comment Tuesday.
News Hawk: User: 420 MAGAZINE ® - Medical Marijuana Publication & Social Networking
Source: San Jose Mercury News
Copyright: 2008 San Jose Mercury News
Contact: Help - San Jose Mercury News
Website: https://www.mercurynews.com/centralcoast/ci_10186079
