SALT LAKE CITY – Three individuals charged in a superseding indictment with conspiracy to transport hundreds of pounds of marijuana from California to Utah and throughout the United States were arraigned on the charges in federal court Friday morning.  The indictment alleges the defendants used the drug organization to generate millions of dollars in marijuana cash proceeds to support various business ventures.

Charged in the indictment are Gabriel Seth Elstein, age 33, and Angela Christina Elstein, age 32, both of Park City, and Scott Dale Gordon, age 48, of St. George.  A Utah company, Dumbles Holdings, LLC, is also named in the indictment.  The Elsteins are managing members of Dumbles Holdings, which was established in 2015 with offices in Salt Lake City.

In addition to the drug trafficking conspiracy count, the 13-count indictment charges possession with intent to distribute a controlled substance, conspiracy to commit money laundering, promotion of money laundering, concealment money laundering, and money laundering. The indictment alleges the defendants obtained sizable quantities of marijuana for distribution from wholesale marijuana suppliers in northern California and recruited drivers to deliver marijuana loads from California to Salt Lake City, Minnesota, Illinois, and Wisconsin. They then utilized retail distributors to sell the marijuana in destination cities.

The indictment alleges the defendants committed overt acts in furtherance of the alleged drug distribution conspiracy.  According to the indictment, the defendants used multiple marijuana suppliers and hired multiple drivers to transport the marijuana to Utah and around the country.

Count 4 of the indictment charges the three with conspiracy to commit money laundering. It alleges the defendants took steps designed to conceal and disguise the nature, location, source, ownership, and control of the proceeds of the drug trafficking organization.  The count alleges that from at least April 2007 through December 2013, the defendants purchased and distributed at least 2,500 pounds of marijuana and laundered at least $5 million in marijuana drug proceeds through Bondad Productions, a business that promoted electronic music/rave shows, and The Complex, both Salt Lake City businesses.

Beginning in 2009 and continuing to September 2010, Gordon and Elstein began construction on a music venue called The Complex.  The cost of the construction was at least $1.3 million.  The indictment alleges that approximately $400,000 came from marijuana cash proceeds previously laundered through Bondad Productions and The Complex bank accounts.  The remaining amount of approximately $900,000 was marijuana cash proceeds paid directly to companies and individuals involved in the construction.   Specifically, the indictment alleges that Gordon made cash payments to an individual referred to as L.M., in the indictment.  L.M. was functioning as the foreman for the construction project and was responsible for paying the construction companies involved in the project. The payments Gordon made to L.M. were shrink-wrapped plastic bags in $50,000 increments and made on almost a weekly basis.

The indictment further alleges that Gordon used marijuana cash proceeds to pay expenses for music shows.

“When it comes to marijuana, it’s all about the cash.  Sophisticated organizations are driven by profits to exploit the insatiable desire for drugs in America.  This multi-year investigation required the professional attention of federal agents with IRS-Criminal Investigation and the DEA Metro Narcotics Task Force.  Without their hard work, there would not be consequences for drug traffickers and their associates who would try to hide under a disguise of seemingly lawful enterprise,” U.S. Attorney John W. Huber said today.  “In Utah, the United States Attorney will pursue justice for marijuana criminal organizations who operate outside the bounds of the law.”

 

The indictment also seeks forfeiture of property derived from the proceeds of the alleged criminal conduct including The Complex located at 536 West 100 South, Salt Lake City and two properties in Park City located at 7467 Tall Oaks Circle and 4268 Hilltop Drive. The Complex is not being shut down and will remain open.   

Gabriel Seth Elstein and Scott Dale Gordon were initially charged in an indictment returned in February.  Both were released on conditions of pre-trial release. Angela Christina Elstein was added to the superseding indictment in September.  She was released at Friday’s hearing.

The defendants face a potential mandatory-minimum sentence of 10 years to life in prison if they are convicted of the conspiracy to distribute count in the indictment.  They pleaded not guilty to the charges at Friday’s hearing and the case was set for trial on Dec. 14, 2018, before U.S. District Judge Clark Waddoups.   Indictments are not findings of guilt.  Defendants charged in indictments are presumed innocent unless or until proven guilty in court. 

Special agents of IRS-Criminal Investigation and the DEA Metro Narcotics Task Force are investigating the case.  Federal prosecutors in the U.S. Attorney’s Office in Salt Lake City are prosecuting the case.