EVERETT — A cannabis store at the center of a fraudulent loan scheme may be closed forever.
Mari J’s Highway Pot Shop, in the Silver Lake neighborhood, had been accused in March 2017 of hiding its financiers from the Washington State Liquor and Cannabis Board.
The financiers were the owners of the building — Conrado Topacio, 58; Hank Jacky, 45; and James Koory, 46 — who together formed CHJ Properties LLC. All three have been charged with first-degree theft for deceiving Everett-based Coastal Community Bank, along with just about everyone else, to obtain a $1.5 million loan from the Small Business Administration. The money allegedly was used to open the cannabis shop, against rules set out by the SBA, a federal agency.
Because marijuana is a closely regulated industry that requires participants to be candid with their business, the board explained in court papers, a misrepresentation of fact can result in a license cancellation.
In an appeal, the owner of Mari J’s Highway Pot Shop claimed she was unaware of the property owners’ plans. She had been lied to just like everyone else, she wrote.
“The WSLCB is blaming the victim,” she wrote in court documents.
A judge with the Office of Administrative Hearings, a state agency that oversees disputes regarding administrative rules, thought otherwise and affirmed the violation on April 23.
The owner has an opportunity to appeal again before a final decision is made to cancel the shop’s license, liquor and cannabis board spokesman Brian Smith said. That deliberation likely won’t take place until late May, at the earliest.
Mari J’s Highway Pot Shop appears to no longer be operating. Last week, an employee outside said the business had been shut down.
Topacio, a Seattle broker, set his eyes on the property in September 2013, when he entered a listing agreement with the former property owners. He then began constantly lying to them and purposefully kept buyers away, prosecutors allege.
Meanwhile, Topacio worked with two other men to submit an offer to acquire the property, documents say. Koory and Jacky are accused of acting as the frontmen, while Topacio allegedly hid his involvement.
They finalized a deal in March 2014.
Topacio and Jacky had each entered a state lottery to obtain a retail marijuana license, but both failed to get one. So they turned to an Everett woman, who did receive a license, to open what would be called Mari J’s Highway Pot Shop.
The liquor and cannabis board has a vetting process for anyone who finances a marijuana business. That apparently caused CHJ Properties to back out, investigators with the board wrote.
Instead, the owner filed documents with the board saying Jacky’s wife alone loaned $150,000, the board alleges.
Really, the three men contributed $50,000 each through CHJ Properties, investigators wrote.
At the same time, the three men were applying for the $1.5 million SBA loan through Everett-based Coastal Community Bank. The defendants told the bank they were opening a country-themed bar called the Stomping Grounds Restaurant, according to charging papers, and forged a Seattle restaurateur’s name to gain credibility.
They got the loan, but never mentioned the marijuana business when working with the bank, prosecutors allege.
Then, to get loan disbursements from the bank, they falsified invoices, including ones from a coffee company and a contractor, according to the charges.
Mari J’s Highway Pot Shop opened in August 2015, but wasn’t investigated by the liquor and cannabis board until 2016, when the agency was tipped off by the U.S. Office of the Inspector General, which had been looking into Topacio’s dealings.
“The licensee knowingly accepted money from an unvetted source, and used that money to start its marijuana business,” the board wrote.
The owner was not charged with any crimes.
A jury trial for Topacio, Jacky and Koory is scheduled for September.
Zachariah Bryan: 425-339-3431; zbryan@heraldnet.com. Twitter: @zachariahtb.
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