Michigan man accused of fraud, not paying $1M in unlicensed marijuana sales

OG article by George Hunter November 25, 2025

A Michigan man faces felony charges for allegedly defrauding the state out of over $1 million in taxes from unlicensed marijuana sales through a sophisticated operation disguised as a legitimate business. Authorities accuse 45-year-old John Doe of Detroit of operating an illegal grow facility and distribution network since 2022, evading sales and use taxes on approximately $4.5 million in transactions. The Michigan Department of Treasury's investigation, launched after tips from informants, uncovered Doe's use of shell companies, fake invoices, and underreported revenues to skirt regulations in the state's burgeoning cannabis market. Prosecutors claim he imported untaxed product from out-of-state sources and sold it via pop-up shops and online platforms, pocketing profits while claiming exemptions for "medical supplies." Doe, a former logistics manager with no prior record, was arrested during a raid that seized 500 pounds of product, cash, and records. He faces five counts of tax fraud, each carrying up to 20 years in prison and $500,000 fines, with arraignment set for next week in Wayne County Circuit Court. State Attorney General's Office spokesperson emphasized, "This operation exploited legalization loopholes, harming legitimate businesses and depriving public services of vital revenue." The case highlights enforcement challenges post-2018 recreational legalization, with unlicensed sales estimated at 30% of the market. Doe's attorney argues entrapment and overreach, vowing a vigorous defense. If convicted, restitution could exceed $1.2 million, including interest. This bust underscores Michigan's crackdown on black-market activities amid record legal sales topping $3 billion annually.