Date: Feb. 13, 2024 Contact: newsroom@ci.irs.gov SEATTLE — A father and son from Seattle were each sentenced today to 30 months in prison for their scheme to violate the state’s marijuana production regulations and produce and sell marijuana on the black market, announced U.S. Attorney Tessa M. Gorman. Qixian Wu and Yong Cong Wu pleaded guilty in November 2023 to conspiracy to manufacture and distribute marijuana and conspiracy to commit money laundering. At their sentencing hearing today, U.S. District Judge John C. Coughenour said the men knew what they were doing violated state law and he was concerned “about the firearms connected with the grows.” “Even after multiple visits from state regulators, the Wu family continued to illegally grow and sell marijuana – some of it likely tainted with illegal pesticides,” said U.S. Attorney Tessa M. Gorman. “By seeking licensing under the regulatory scheme—while not complying in any meaningful way with this system—the Wu family not only violated federal law, but also, threatened the viability of the state’s approach to the legalization of marijuana in Washington.” According to records filed in the case, as early as November 2016, regulators began noticing irregularities in reports from the Wu’s licensed marijuana production business—New Direction—located on West Marginal Way SW. Inspections in July, August and September 2018 identified product that was not appropriately tagged or tracked. Samples taken in September were tested and found to be tainted with illegal pesticides. In October, inspectors from the Washington State Liquor and Cannabis Board (WSLCB) seized all the product at New Direction. Despite the regulatory attention, the Wu family did not change operations and continued to falsify reports with respect to the marijuana produced at New Direction. Yong Cong Wu and his brother—who is scheduled for sentencing in April—also operated a second business, Affordable Indoor Growing Supplies (AIG), which provided marijuana grow equipment to other illegal growers throughout the area. The men deposited cash derived from illegal marijuana sales into the accounts of the gardening store business to hide the fact that these deposits, in fact, involved illicit drug proceeds. They also used a casino next to the gardening store to launder the funds. When investigators searched the home and businesses associated with the Wu family in October 2020, they seized more than 3,000 marijuana plants and over 100 kilograms of processed marijuana. At the garden store they seized $69,456 in cash drug proceeds and $34,800 in money orders. At the Wu family residence investigators seized $152,631 in cash drug proceeds, eleven firearms, a 2018 Mercedes G-550 and a 2020 Mercedes G63 W4—purchased outright in September 2020 for more than $235,000. In all, the defendants are forfeiting the commercial property that facilitated their illicit conspiracy, two luxury cars, and about $250,000 in cash as proceeds of crime. The defendants also agreed to abandon the firearms seized from the family residence. Both men will be on three years of supervised release following the prison terms. This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. The case was investigated by U.S. Postal Inspection Service (USPIS), King County Sheriff’s Office, and Internal Revenue Service Criminal Investigation (CI). The case was prosecuted by Assistant United States Attorney Joe Silvio with substantial investigative assistance from OCDETF Auditor Becky Carnell. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
