Owner of marijuana stores pleads guilty to $25-million scheme

A San Clemente man who operated nine marijuana stores in Orange and L.A. counties pleaded guilty Monday to federal drug trafficking and tax charges in a scheme that netted him $25 million.

John Melvin Walker, also known as “Pops,” 56, pleaded guilty to conspiring to distribute well over a ton of marijuana and to maintain drug-involved premises.

He also pleaded guilty to a tax evasion count in a second case that was filed in February, said Thom Mrozek, a spokesman for U.S. Attorney’s office.

Walker, who kept more $500,000 in cash at his home, will get at least 10 years in federal prison and is forfeiting millions of dollars in assets as part of the plea agreement, prosecutors said.

He was taken into custody following Monday’s plea.

Walker was one of 14 people named in an indictment returned by a federal grand jury in October. That indictment charged Walker with a drug-trafficking conspiracy.

it was the culmination of an investigation by federal agents with the Drug Enforcement Administration and detectives with the Orange County Sheriff’s Department

The nine marijuana stores were 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 admitted he directed the managers of his marijuana stores to shred records in an effort to conceal from tax authorities income earned from the sale of marijuana.

The San Clemente man, who has two prior felony drug-trafficking convictions from state court, admitted in the federal tax case that he earned approximately $25 million from marijuana sales over the course of six years.

Walker specifically admitted he earned $11.4 million in 2009, but reported to the Internal Revenue Service income of $200,180 and that he owed $2,656 in taxes.

As part of a plea agreement, Walker admitted he owes the IRS $944,133 in relation to the 2009 tax year alone.

In relation to the tax years 2006 through 2011, Walker agreed to pay the IRS more than $2.4 million, as well as $1.8 million in restitution to the California Board of Equalization.

Federal prosecutors said in addition to the $4.2 million he has agreed to pay to federal and state tax authorities, he agreed to forfeit to the government $25 million in illegally obtained income.

He will forfeit his $1.7-million home in San Clemente, a string of mobile homes in Mammoth Lakes, rental properties in Long Beach and an interest in two strip clubs.

The plea agreement provides for an enhancement to Walker’s sentence because he possessed firearms in relation to the drug-trafficking offense. Authorities discovered in one of Walker’s “stash houses” an AK-47-style assault rifle, three other firearms and ammunition.

A search of Walker’s home uncovered nearly $400,000 in cash in a safe and also approximately $145,000 in cash elsewhere in the house.

U.S. District Judge James V. Selna is slated to sentence Walker on July 22. At sentencing, Walker faces a maximum possible sentence of life in federal prison and a mandatory minimum sentence of 10 years.

As part of the plea deal, which considers a potential sentence of more than 20 years, Walker agreed not to argue for a sentence of less than 15 years.

The other defendants in the indictment are slated to go on trial Sept. 24.

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richard.winton@latimes.com