OC Drug Kingpin Pleads Guilty in $25 Million Pot Case

The owner of a defunct Dana Point marijuana dispensary pleaded guilty in federal court today to drug trafficking and tax evasion in connection with several marijuana stores that authorities say earned him about $25 million over six years.

John Melvin Walker, the 56-year-old owner of Dana Point's Safe Harbor, pleaded guilty to a count of conspiring to distribute more than a ton of marijuana and to a count of tax evasion, according to Thom Mrozek of the U.S. Attorney's Office. The for-profit marijuana shop in Dana Point was located within within 1,000 feet of a private school, according to the indictment. According to Google Maps, the two locations are 225 feet apart.

The Dana Point shop generated $2.4 million in income in 2009, according to business records that prosecutors obtained from an alleged co-conspirator. In April 2010, the collective allegedly sold marijuana twice to an undercover law enforcement officer.

Walker faces a federal prison term between 10 years and more than 20 years, according to the plea bargain, Mrozek said. Walker agreed to not argue for less than 15 years in prison, according to the deal.

U.S. District Judge James Selna is scheduled to sentence Walker on July 22.

The dispensaries operated by Walker were identified as Alternative Herbal Health in Long Beach, Safe Harbor Collective in Dana Point, Garden Grove Alternative Care in Garden Grove, Santa Ana Superior Care in Santa Ana, Belmont Shore Natural Care in Long Beach, Santa Fe Compassionate Health Care in Santa Fe Springs, Costa Mesa Patients Association in Costa Mesa, the Whittier Collective in Whittier, and APCC in San Juan Capistrano.

Walker ordered managers of his marijuana businesses to routinely shred records, so he could avoid paying taxes, according to Mrozek.

Walker, for example, admitted he netted $11.4 million in 2009 while only reporting $200,180 in income and that he owed $2,656 in taxes to the IRS, according to the plea deal. Walker, however, owed $944,133 in taxes in 2009, Mrozek said.

Walker agreed to pay $2.4 million in federal taxes and $1.8 million in state taxes. He also will give up $25 million from the marijuana sales, which includes assets such as his San Clemente home worth $1.7 million, multiple mobile homes in Mammoth Lakes, rental properties in Long Beach and his interest in two strip clubs, according to Mrozek.

Walker faces extra years in prison because authorities guns similar to a AK-47 in one of Walker's defendant's stash houses.

The other defendants arrested or identified in October are:

• Ryan Aparicio Mondragon, 30, of Westminster, who is still at-large;
• Danielle Pamela Stebel, 25, of Long Beach;
• Nicholas Einar Lattu, 28, of Long Beach, who is still at-large;
• Ryan Scott Hunt, 36, of Fullerton;
• Perry Brooks Forehand, 33, of Mission Viejo;
• Nicholas Martin Butier III, 32, of Lakewood;
• Sierra Marina Serhan, 33, of Long Beach;
• Alvin Wesley Walker, 29, of Long Beach, who authorities believe is John Walker's nephew;
• John Eugene Scandalios, 59, of Lakewood;
• Karen Lee Leto, 70, of Huntington Beach;
• Craig Lawrence Leto, 49, of Newport Beach, who is Karen Leto's son;
• Michael Alan Nixon, 33, of Long Beach;
• Alan David Nixon, 59, of Long Beach, who is Michael Nixon's father.

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- City News Service