By John Dobberstein, Editor
OKLAHOMA CITY — State and federal officials said Tuesday they dismantled a “sophisticated criminal enterprise” that moved more than 1 million pounds of marijuana funneled through fraudulent licensed sellers in Oklahoma over several years.
Authorities said the Hao Chen Organization was responsible for producing marijuana with a street value of more than $1.5 billion that was distributed through a network of “straw owners” of medical marijuana licenses.
But Oklahoma Attorney General Gentner Drummond said the office’s Organized Crime Task Force, and more than two-dozen other law enforcement agencies arrested 20 people after grand jury indictments were handed down last November.
Drummond said the investigation, called Operation Blunt Force, targeted the that was running fraudulent licensing schemes from 2021 to 2025. More than 50 search warrants were issued, with agents recovering 12 firearms. Four people were also deported.
Nineteen defendants were charged with 18 felony counts, including racketeering, conspiracy to defraud the state, document fraud, aggravated manufacturing of marijuana and unlawful proceeds.
The operation comes after the state considerably tightened restrictions on medical marijuana licensing, after rampant fraud had become evident across the state several years earlier.
The indictment alleges Chen orchestrated a fraudulent “straw owner” scheme that unlawfully obtained Oklahoma Medical Marijuana Authority (OMMA) licenses and Oklahoma Bureau of Narcotics and Dangerous Drugs (OBN) registrations for marijuana growing facilities in violation of Oklahoma’s residency requirement.
The organization recruited Oklahoma residents as straw owners, paid them to use their identities on fake applications, then illegally manufactured marijuana and diverted it to the black market, authorities said.
The investigation revealed Chen had bank accounts with large cash deposits and regular wire transfers from New York, which were used to pay straw owners and other associates of the conspiracy, the indictment alleges.
Drummond said the enterprise “undermined the integrity of our licensing process and violated the trust of Oklahomans.
“When criminal organizations divert marijuana to the black market, they put our communities at risk and fund further illegal activity. I am grateful to the 27 agencies across the country that worked together to bring these individuals to justice and make Oklahoma safer.”
The investigation revealed that individuals involved in the criminal activity were in Oklahoma, New York, Texas, Nevada, California, Colorado, Illinois and Washington.
Financial transactions connected to the operation flowed to and from Oklahoma from New York, Nevada, Texas, California, New Mexico, Missouri, Georgia, Illinois, Washington, Oregon and China.
Drummond said the task force was built to handle complex, multi-state criminal enterprises, “and Operation Blunt Force is a testament to what our team can accomplish when we work together with partners across the country.”
Farhana Islam, special agent in charge for the DEA’s New York Enforcement Division, said criminal organizations, “were not only flooding our communities with illicit drugs, but also using financial schemes to hide and move their illegal profits.
“The DEA and our law enforcement partners in New York and across the country remain committed in targeting those drug trafficking organizations and individuals who attempt to gain the system, from cultivation to cash flow.”
The Queens District Attorney’s Office in New York also assisted with the operation, noting the alleged ringleader of the operation lived in Queens County, N.Y.
Other agencies involved include sheriff’s offices in Blaine, Canadian, Kingfisher, Pottawatomie, Fort Bend (Texas) and Washoe (Nev.) counties, DEA offices in Houston, Oklahoma City and Reno (Nev.), police departments in Edmond, Lawton, Midwest City, Oklahoma City, Shawnee and New York; the Oklahoma Highway Patrol, FBI office in Oklahoma City; Oklahoma Bureau of Narcotics, Oklahoma Medical Marijuana Authority; the Oklahoma National Guard 63rd Civil Support Team, District 5 and District 23 district attorneys, and District 23 District Attorney Drug Task Force.
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