United States Attorney Benjamin B. Wagner announced that Charles Miller Hilkey Jr., 58, of Nevada City, pleaded guilty today before United States District Judge Kimberly J. Mueller to conspiring with others to cultivate marijuana and to structuring financial transactions to avoid federal reporting requirements.
According to court documents, Hilkey was the leader of a significant marijuana grow operation. Marijuana being grown on multiple properties controlled by Hilkey was ostensibly for medical purposes. He and his confederates “structured” various financial transactions with some of the money they made selling marijuana in order to avoid financial reporting requirements under federal law. Hilkey structured at least $859,000 in numerous transactions with one or more domestic financial institutions, usually post offices in Nevada County. Between 2006 and 2009, Hilkey also amassed a significant amount of real property, which is now being forfeited to the federal government as a result of his marijuana-related activities. Hilkey will forfeit approximately 25 different properties in Oregon and California with a combined value of more than $2.4 million.
“Mr. Hilkey’s highly profitable marijuana trafficking and money laundering enterprise is at end,” said U.S. Attorney Wagner. “Together with our state and local law enforcement partners we will continue to root out and prosecute large commercial marijuana traffickers.”
This case is the product of an investigation by the IRS-Criminal Investigation, the Drug Enforcement Administration, the California Department of Justice (MAVMIT), and the Nevada County Sheriff’s Department. Assistant United States Attorney Michael M. Beckwith is prosecuting the case.
Hilkey is scheduled to be sentenced by Judge Mueller on June 12, 2012. He faces a maximum statutory penalty for the marijuana charge of 40 years in prison, a $2 million fine, and a life term of supervised release. There is a five-year mandatory minimum sentence associated with this charge. The maximum statutory penalty for structuring transactions to evade reporting requirements is 10 years in prison, a $250,000 fine, and a three-year term of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.