The ex-operator of Corona and Perris medical marijuana dispensaries that took in more than $1 million was sentenced today to six months of home detention and three years probation for tax evasion.
U.S. District Judge Virginia Phillips also ordered Ronald Bradley Naulls, 31, to pay $14,557 in back taxes.
Naulls was arrested in July 2007 during a region-wide crackdown on cannabis stores by Internal Revenue Service and Drug Enforcement Administration agents.
He was charged with conspiracy to possess, with the intent to distribute, marijuana; maintaining a drug establishment; distribution of a controlled substance; and willful filing of a false income tax return.
According to court documents, Naulls used “substantial amounts of cash” received from the business for personal expenditures, including paying the mortgage payments on his house.
Despite earning more than $165,000 from his Healing Nations Collective, Naulls reported gross income of less than $30,000 — for 2006 and 2007 combined — according to federal prosecutors.
The property seized from the defendant’s Corona home included a Lexus, a Mercedes-Benz, $75,000 cash and 15 pounds of marijuana, according to the DEA.
Naulls entered into a plea agreement with the U.S. Attorney’s Office in May, acknowledging his guilt on the income tax evasion charge.
Prosecutors dropped the other charges.
The Healing Nations Collective, which was located in a strip mall on West Grand Boulevard, provided marijuana to people with prescriptions for the controlled substance.
Under California Proposition 215, medical marijuana dispensaries are permitted. But federal law does not recognize them as legal.
Naulls’ operations grossed an estimated $1.2 million in less than a year, selling cannabis-laced products, including cakes and other edibles, on a cash-only basis, according to the DEA.
“The defendant and his employees would purchase marijuana, hashish and other controlled substances for cash from growers and vendors,” the plea agreement states.
Federal law enforcement agents staged several undercover operations in which Naulls’ or his employees sold them marijuana, according to the U.S. Attorney’s Office.
Within months of Healing Nations opening its doors, the Corona City Council imposed a permanent moratorium on marijuana dispensaries in the city and later refused to renew the defendant’s business license.
According to federal prosecutors, Naulls operated a smaller outlet in Perris.
The federal raids sparked protests by Healing Nations customers and employees.