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Puretane Executives Admit Laundering Profits from Illegal Butane Business
Michael Tandberg, former Chief Executive Officer of Lahar Manufacturing, Inc., and Adam Hopkins, former Chief Financial Officer, pleaded guilty in federal court on March 10, 2016, in San Diego, California, admitting that they conspired to launder proceeds from their illegal business. The Newport Beach-based company, operating under the name Puretane, was the first and largest domestic manufacturer and distributor of butane specifically designed for use in making butane hash oil.
Butane hash oil, also known as BHO, is a marijuana concentrate similar in appearance to honey or butter. It contains extremely high levels of tetrahydrocannabinol, or THC, and can be up to four times more potent than high-grade marijuana. The manufacture of BHO involves packing marijuana into a glass, plastic, or metal tube, then spraying butane into the top of the tube. The butane strips the marijuana of its cannabinoid-containing oils, which drip from the bottom of the tube into a holding container.
During the manufacture of BHO, butane can evaporate out of the substance and collect on the floor, accumulating to explosive levels without proper ventilation. This process creates an invisible, but very real, risk of fires, explosions, and chemical burns. In 2015 alone, there were 33 reported fires and explosions that occurred during the manufacture of BHO in California.
The manufacture of BHO is met by an unregulated and largely underground industry that plays out in garages, basements, and kitchens. In this type of setting, a spark from something as ordinary as a refrigerator compressor can set off a fiery explosion. Puretane’s butane was marketed specifically for use in the unregulated manufacture of BHO.
Puretane sold its butane in 300 ml canisters for approximately $4-5 per canister to retailers throughout the United States, including to at least 25 retailers in San Diego County. According to the DEA, Butane Hash Oil Extraction Laboratories have caused 10 fires and explosions in San Diego County since January 2015. In the Southern District of California, there have been a number of Butane Hash Oil Extraction cases. In a recent case, defendant Steve Mora was sentenced to 40 months in custody after pleading guilty to creating substantial risk to human life while manufacturing Butane Hash Oil.
The crime of conspiracy to launder proceeds from an illegal business is punishable by up to 20 years in prison. The exact sentence for Tandberg and Hopkins has not been determined yet. Assistant U.S. Attorney Andrew J. Galvin is handling the case. The investigation was conducted by the DEA and the IRS-CI.
Key Facts
- State: California
- Category: Drug Trafficking|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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