District Attorney George Brauchler discusses the indictments of 16 people who were arrested for a multi-county illegal marijuana cultivation and distribution network at the DEA offices March 17, 2017 in Centennial. (Andy Cross, The Denver Post)

16 people indicted in massive Colorado marijuana home grow op

CENTENNIAL — Sixteen people have been indicted on charges they ran a massive home-grown marijuana operation across the Denver metro area that produced hundreds of pounds of pot each month for distribution across the country.

Authorities say over about three years, the ring used houses and properties in places like Colorado Springs, Castle Rock, Elbert County and Denver, to cultivate the cannabis and then make high-dollar deals to sell it in Illinois, Arkansas, Minnesota and Missouri.

An investigation into the ring launched in August, the indictment shows, after investigators searched an Elizabeth property owned by 53-year-old Michael Stonehouse. There they found more than 2,500 pounds of marijuana, which officials estimate was worth about $5 million.

“In a nutshell, this was about home-grown, local folks growing and exporting marijuana (for sale) out of the state of Colorado,” 18th Judicial District Attorney George Brauchler said at a news conference Friday afternoon. “This operation that was shut down effectively by the indictments and warrants that were issued was generating about 300-plus pounds of finished marijuana each month. These packages that they put together were tracked here, there and everywhere.”

Brauchler said it is the largest such case he has ever seen.

Local law enforcement — from Colorado Springs to Denver — worked with the Drug Enforcement Administration and federal prosecutors on the case, in which investigators used wire taps, video surveillance, gps trackers and search warrants on more than 20 accounts at more than seven banks.

Authorities over the past year, led by the DEA, have made it a priority to crack down on marijuana being illegally grown in homes for out-of-state sale. Barbra Roach, chief of the DEA’s Denver division, said her office is working on several similar cases that are pending indictments, and the agency has completed numerous illegal marijuana raids across the Front Range and the state’s southeast corner.

“Yes, residents of Colorado, and people that I’ll call ‘transplants to Colorado,’ are moving here (and) becoming involved in the marijuana industry with the expressed purpose of hiding their illicit proceeds and their illicit activities in plain sight under some of the laws that we have,” Roach said. “… We’re seeing ourselves as a larger source of supply than we ever were before.”

Brauchler, whose office is prosecuting the case, said the investigation into the ring reached a head on Thursday when search warrants were served across 19 Front Range locations by more than 200 law enforcement officers. Fifteen of the sixteen people indicted have been taken into custody.

Authorities say Stonehouse is suspected of leading the organization, whose operations are believed to have begun in March 2014. There are 25 counts in the indictment, including Class 1 and Class 2 drug felonies, as well money laundering allegations and suspected violations of the Colorado Organized Crime Control Act.

Almost 40 weapons, including rifles, shotguns and handguns, were also seized and investigators say there were at least two locations associated with the ring where marijuana concentrate — known as hash oil — was being produced.

Chief Deputy Steve Johnson, of the Douglas County Sheriff’s Office C, said illicit home marijuana grows “come up on a daily basis.” He said they pose a risk to the community because of the chemicals and electricity involved.

Brauchler said he found it particularly surprising how the Stonehouse ring appeared to be operating amid everyone else in the community, particularly when it came to selling pot.

“These were transactions that were taking place not under the cover of darkness,” Brauchler said. “Not in the far reaches of this jurisdictions. There were hundreds of pounds of marijuana being exchanged in the parking lot of a school in Aurora, a parking lot of a Starbucks near Castle Pines.”

Greenwood Village Police Chief John Jackson, head of the Colorado Association of Chiefs of Police, used Friday’s announcement of the indictment to support a bill limiting marijuana patients 16 plants in their homes, down from 99. He said illegal growers are often using the current rules to shield themselves from arrest.

He called the legislation the “single most important bill that we’ve had in years.”

“There is a lot of marijuana that is leaving Colorado,” Jackson said. “We’re doing things so fast that I think we’re impinging on what the both spirit and amendment of 64 and 20 were voted on.”

Those indicted:

  • Jerram Cathey
  • John Cathey
  • Michael Stonehouse
  • Rudy Saenz
  • Theodore Stonehouse
  • Tilden Lazaro
  • John Mason Cathey
  • Vernon Watts
  • Myisha Evans
  • Vincent Castillo
  • Jason Jones
  • Amy Jones
  • Jibaro Smith
  • William Todd Garner
  • John Ramsay
  • Raciel Martinez

This story was first published on DenverPost.com