OKLAHOMA CITY – The Oklahoma Multi-County Grand Jury has indicted two Tulsa County residents and another individual in an alleged conspiracy to defraud the state involving illegal marijuana operations.
Prosecutors allege Kody Sumter, 34, recruited Oklahoma residents to serve as “straw owners” on licenses and registrations of medical marijuana grow businesses. Sumter allegedly connected these residents to non-residents, charging non-residents a fee that was used partially to pay the residents for use of their information. In the past, such schemes have been implemented in an attempt to circumvent residency requirements for medical marijuana grow licensing.
In addition to Sumter, the grand jury indicted Michael Dudek, 35, and Dengfeng Huang, 44, for knowingly providing fraudulent documentation and information to obtain medical marijuana licensing and registration. The indictments indicate Sumter paid Dudek to be a straw owner to a Seminole County marijuana grow operation and connected Dudek to a nonresident.
In a separate instance, Sumter allegedly submitted fraudulent information to the State claiming that he owned 75 percent of an Ada medical marijuana grow and that Huang owned 25 percent.
Attorney General Gentner Drummond praised the work of the grand jury.
“These cases illustrate how unscrupulous individuals have exploited Oklahoma’s medical marijuana industry for nefarious and illegal criminal activity,” he said. “While many individuals are lawfully abiding by the regulations governing medical marijuana, law enforcement is tirelessly cracking down on the bad actors who are feeding the nation’s illegal marijuana market. These ‘straw ownership’ schemes made a mockery of our laws, and they will not be tolerated.”
The investigation into Sumter stemmed from collaboration of the Attorney General’s Organized Crime Task Force, the Oklahoma Medical Marijuana Authority and the Oklahoma Bureau of Narcotics and Dangerous Drugs (OBN).
“This is another example of our commitment to aggressively combat these criminal organizations seeking to get a foothold in Oklahoma,” said OBN Director Donnie Anderson. “Working alongside our partners at the Attorney General’s Office and the Oklahoma Medical Marijuana Authority, we continue to dramatically reduce the number of illegal marijuana businesses that have been operating with fraudulent ‘straw ownership’ schemes and moving product to the illicit market out of state.”
OMMA Executive Director Adria Berry also emphasized the importance of collaboration.
When state agencies work together, law abiding citizens win,” she said. “OMMA is grateful for strong partnerships with the Attorney General and Bureau of Narcotics. We are truly better together.”
Sumter is charged with conspiracy to defraud the State and aggravated manufacturing of a controlled dangerous substance.
Huang is charged with conspiracy to defraud the State, aggravated manufacturing of a controlled dangerous substance (marijuana) and trafficking of a controlled dangerous substance in excess 25 pounds (marijuana).
Dudek is charged with conspiracy to defraud the State and aggravated manufacturing of a controlled dangerous substance (marijuana).
The indictments were handed down in July but sealed until late last week.
Every person arrested or indicted is presumed innocent unless and until convicted in a court of law.
