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Palomar Mountain Marijuana Co. goes bust

Real estate agent falsely reports girlfriend's income as $420K/year

Marco Luis and Joshua Hester were longtime friends and business partners. "As a real estate agent, Luis had the know-how. As a career marijuana dealer, Hester had the cash," notes a decision from the Ninth Circuit Court of Appeals, ruling on an issue that had been decided by U.S. District Court in San Diego. The decision was released August 28.

In 2006, Luis and Hester bought a Rancho Santa Fe home, where Hester raised pot in a secret room. Hester's girlfriend was the straw buyer. Luis falsely stated she earned $420,000 a year as a self-employed businesswoman. The following year, Luis and Hester bought acreage on Palomar Mountain, where Hester intended to grow marijuana. This time, the straw buyer was a fellow who delivered marijuana to Hester's customers. Luis claimed on the paperwork that the deliveryman was in the auto business.

By 2009, both properties were in default. Luis, Hester, his girlfriend, and his pot deliveryman all were charged criminally. In 2012, Luis was sentenced to four years in prison for falsifying the loan documents. In 2013, Joshua got 100 months (more than eight years) for his marijuana, real estate, and money-laundering transgressions.

But the cases weren't over. Luis appealed the restitution that judge Irma Gonzalez ordered him to pay. In the decision of August 28, the appellate court upheld most of Gonzalez's order but said she had erred in calculating restitution to J.P. Morgan Chase, which had purchased one of the loans from Washington Mutual, the disgraced lender that was seized by the United States government in 2008. J.P. Morgan purchased Washington's banking operations after the seizure.

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Marco Luis and Joshua Hester were longtime friends and business partners. "As a real estate agent, Luis had the know-how. As a career marijuana dealer, Hester had the cash," notes a decision from the Ninth Circuit Court of Appeals, ruling on an issue that had been decided by U.S. District Court in San Diego. The decision was released August 28.

In 2006, Luis and Hester bought a Rancho Santa Fe home, where Hester raised pot in a secret room. Hester's girlfriend was the straw buyer. Luis falsely stated she earned $420,000 a year as a self-employed businesswoman. The following year, Luis and Hester bought acreage on Palomar Mountain, where Hester intended to grow marijuana. This time, the straw buyer was a fellow who delivered marijuana to Hester's customers. Luis claimed on the paperwork that the deliveryman was in the auto business.

By 2009, both properties were in default. Luis, Hester, his girlfriend, and his pot deliveryman all were charged criminally. In 2012, Luis was sentenced to four years in prison for falsifying the loan documents. In 2013, Joshua got 100 months (more than eight years) for his marijuana, real estate, and money-laundering transgressions.

But the cases weren't over. Luis appealed the restitution that judge Irma Gonzalez ordered him to pay. In the decision of August 28, the appellate court upheld most of Gonzalez's order but said she had erred in calculating restitution to J.P. Morgan Chase, which had purchased one of the loans from Washington Mutual, the disgraced lender that was seized by the United States government in 2008. J.P. Morgan purchased Washington's banking operations after the seizure.

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Comments
4

How much restitution was he originally ordered to pay and what was they new amount after the appeal?

Aug. 31, 2014

danfogel: The district court ordered Luis to pay restitution of $545,029.90. He appealed. The appellate court remanded that part of the case back to the district court for recalculation of the Rancho Santa Fe loans. Because the appellate court's decision was August 28, there has been no action by the district court. Best, Don Bauder

Aug. 31, 2014

Yeah, that's what I read. I was somewhat surprised it wasn't included in the story since the restitution was referenced.

Aug. 31, 2014

danfogel: I decided the sum was not that important. What was important was that Luis protested that sum and, for the most part, was rebuked by the appeals court. Blog items are not legal briefs. We focus on the salient matters. In this case, that involved going back and reconstructing the history of those people (much of which was not in the court's decision), and then explaining what the appeals court decided. Best, Don Bauder

Sept. 1, 2014

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