Feds arrest SLO cannabis business owner in darknet drug sting

June 27, 2018

Daniel Boyd McMonegal

The U.S. Justice Department has arrested 35 suspects selling illegal drugs and marijuana on the darknet including a San Luis Obispo county cannabis delivery service owner, according to a news release. [Cal Coast Times]

Federal agents posed as money launderers on “darknet market sites” and were able to infiltrate the criminal enterprises, resulting in the seizure of “massive amounts” of narcotics, 100 firearms, $20 million in cryptocurrencies, and $3.6 million in bills and gold bars. The 35 individuals arrested are awaiting prosecution.

On May 17, a federal grand jury returned an 11-count indictment against Daniel Boyd McMonegal, 35, of San Luis Obispo charging him with drug distribution and money laundering.

According to the indictment, McMonegal, using the online monikers “Sawgrass,” “Ross4Less,” and “ChristmasTree,” distributed marijuana on various dark web marketplaces, including Dream Market.

McMonegal is the owner of a San Luis Obispo marijuana delivery service called West Coast Organix, which claimed to be a non-profit medical marijuana cooperative located at 712 Fiero Lane near the San Luis Obispo airport.

McMonegal then laundered the Bitcoin proceeds of his drug distribution through an undercover agent located in New York.  After receiving the Bitcoin from McMonegal, the undercover agent mailed parcels of cash to McMonegal in San Luis Obispo and Mariposa.

The extensive federal operation, which culminated in four weeks of more than 100 enforcement actions around the country, resulted in the following:

Federal arrests of more than 35 darknet vendors who engaged in tens of thousands of sales of illicit goods;

  • Execution of 70 search warrants, resulting in the seizure of massive amounts of illegal narcotics, including 333 bottles of liquid synthetic opioids, over 100,000 tramadol pills, 100 grams of fentanyl, more than 24 kilograms of Xanax, and additional seizures of Oxycodone, MDMA, cocaine, LSD, marijuana, and a psychedelic mushroom grow found in a residence;
  • Seizure of more than 100 firearms, including handguns, assault rifles, and a grenade launcher;
  • Seizure of five vehicles that were purchased with illicit proceeds and/or used to facilitate criminal activity;
  • Seizure of more than $3.6 million in U.S. currency and gold bars;
  • Seizure of nearly 2,000 Bitcoins and other cryptocurrencies, with an approximate value of more than $20 million;
  • Confiscation of 15 pill presses, which are used to create illegal synthetic opioids; and
  • Seizure of Bitcoin mining devices, computer equipment, and vacuum sealers.

On Tuesday, the Department of Justice, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the U.S. Secret Service, the U.S. Postal Inspection Service and the U.S. Drug Enforcement Administration, announced the results of a year-long, coordinated national operation that used the first nationwide undercover action to target vendors of illicit goods on the darknet.

“The darknet is ever-changing and increasingly more intricate, making locating and targeting those selling illicit items on this platform more complicated. But in this case, HSI special agents were able to walk amongst those in the cyber underworld to find those vendors who sell highly addictive drugs for a profit,” said HSI Executive Associate Director Benner. “The veil has been lifted. HSI has infiltrated the darknet, and together with its law enforcement partners nationwide, it has proven, once again, that every criminal is within arm’s reach of the law.”







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abigchocoholic

An absolutely massive waste of money.

Find something else to do Govt., you’re wasting my tax dollars.

Jon Tatro

As a retired police officer and undercover narcotics agent I can tell you the war on drugs is a crock of crap. That is the truth and it’s always been the truth.

modernwelding

So much for his “lucky” hat. Where are the cars auctioned off at?

AGDUDE

What people do not understand most of these people have problem , conforming , that is the basic make up these people , smoke your grass ok.. but we have laws, ..we all need to get in line .. ALL OF US not just some , the market place for pot over all this will be the scourge of the earth.. In short You in some trouble boy!

Might send a message.. to these cool clowns

AmericaTheFree

As an ex-con I can tell you with authority that the whole “message sending” thing as a deterrent, ain’t! No one, and I mean no one, thinks their gonna get caught, what would be the fun in that? What will happen is you’ll have others look at this as a subject lesson; look to enhance what these guys did, or change them all together, thinking what they’re doin’ is now foolproof. The $3.6 million in currency and gold alone is incentive enough for others to emulate these guys, and I can almost assure you there is more than that out there that these guys have buried, get-away money. My opinion? By reporting this type of money and assets being seized actually encourages those that wouldn’t otherwise do this type of stuff to do so, risks be damned!

Alcohol have its illegal bootleggers (you can watch ’em on The History Channel), tobacco has it’s tax stamp forgers, and both of those legally profitable “products” are known killers, where cannabis isn’t, and those actual scourges are legal, why? ’cause the feds’ finally figured out the tax revenues they represent outweigh all the costs associated with trying to illegalize them. It’s all about the Benjamin’s, no matter if it’s the criminals gettin’ it or the [criminalized] government.

Cannabis is “the scourge of the earth”, what a crock of chit that is….

obispan

Shouldn’t be any problem, Shoals delivers on his promises as long as your check clears.

jimmy_me

Wow! Thanks. I feel much safer now.

kayaknut

Seems right in line, Mayor Shoals and Jeff Lee gave one of Grover Beach’s permits to a convicted pedophile, who who just happened to donate to right places, over the recommendation of staff.

AmericaTheFree

Here we go… It only takes a few bad apples to risk all of the honest and law abiding cannabis community has tried so hard to change for decades… This will be another arrow in the quiver of Jeff Sessions to say “I told ya so” and prolong the eventual decriminalizing of this plant.

Good for law enforcement!!! This is was money well spent!!!!

Jorge Estrada

Not just the law abiding cannabis community, all of the other law abiding addicts too. All drug users should have their ability to screw themselves up and not have their drug access threatened by this bad example.

AmericaTheFree

Jorge, are you kidding? I can’t tell from your post… Are you suggesting that all illicit drugs should be legalized? If so? I agree…

Snoid

Get real ATF, Decriminalizing of a plant? Same train of thought that “guns kill people” No, people kill people, and a plant by itself is just a plant. It’s the idiots who smoke it, dont have medical issues, and the stupid shit that they do post bong loads that are the problem.

AmericaTheFree

Okay, so lets apply the same reasoning to say Alcohol? How ’bout Tobacco? One of which is plant, the other derived from a plant, both of which kill people daily! Not just because it causes diminished capacity, in alcohols case anyway, that leads to “stupid shit” but from it’s mere use. That’s okay because it’s a social norm’? An American way of life? An accepted “disease” (alcoholism) or a recognized corporate influenced and manipulated “addiction” (tobacco) which both take away from the responsibility of the smoker and or drinker? Why aren’t those “plants” demonized like pot is? To the point of a schedule 1 designation by the FDA, a “drug [that] is not safe to use, even under medical supervision”, or even the lower schedules 2 through 5 that all apply fit their designations of either “moderate” or “severe physical and mental addiction”?

Why is it that you, and others, think that adults can drink and smoke responsibly, and have the choice to do so, with the known addiction and death from both? Then explain why adult cannabis user can’t.

Snoid

You’re correct in that booze is as bad if not worst. Problem is try getting rid of it and the taxes it brings in, aint gonna happen. Kinda like two wrongs dont make a right, ya know?. You’re a X con, Im a Ex druggy. Sure there are folks who need medication but you know as well as I people will not do the right thing when it comes to honesty and self regulation and the problem grows. They banned helmet less riding of motorcycles saying it cost to much to cover the cost of medical for those uninsured who eat it? that’s such Bullshit. Try the Gov saving us from ourselves, and yet drugs are legalized and you know people will die as a result, but that’s acceptable?. It won vote from special interest groups that’s all. Based of ethics and morals Id rather see booze outlawed than pot legalized. Far as the bit about getting caught and not thinking you will? Defiance, that greatest act ;)

AmericaTheFree

The actual “problem” with pot is it has always been joined at hip with the other illicit drugs that do actually cause harm, up to and including death, and then bundled together to a community that has no clue due to self inflicted ignorance, based on irrational fears derived from misinformation and disinformation propagated by our government.

Sure, people will die if all drugs are legalized, but I would bet far fewer than if they are left illegal. Is that acceptable? Depends on what is defined as “acceptable”. Big pharm’ puts out chit that is known to cause harm, up to and including death, and that’s acceptable. People die from driving cars, and that’s acceptable. People die from guns, and that’s acceptable. What becomes “normal” is more apt to be “acceptable” even if it does cause death.

Bell Helmets was the biggest provocateur of the BS helmet law (there’s a reason helmets are referred to as “Brain Buckets” for those of us in the know), by doing so they guaranteed their continued existence. The same can be said of the Alcohol Lobby, as they were, and still are, the biggest opponents of pots legalization.

You sound reasonable, so I can I make a reasonable challenge? There’s an older book out there that talks about this exact subject, written by a very conservative prosecutor turned author, Vincent Bugliosi. It’s titled “Drugs in America, A Citizen’s Call to Action” My challenge? Read that book with an open mind, consider the person who is writing it, and then talk to me…

Yea, defiance! That greatest act that got me into my greatest problems… chit!

AmericaTheFree

Now there’s this…

http://thehill.com/homenews/senate/394562-schumer-unveils-bill-to-decriminalize-marijuana

It’s about time and appears to have bipartisan support.