California AG Files Felony Charges Against Unlicensed Marijuana Retailer Over $7.1 Million in Alleged Tax Evasion
- California Attorney General Rob Bonta filed felony charges against Pin Hsien Hsu for operating unlicensed marijuana dispensaries and evading $7.1 million in taxes across Southern California counties.
- From April 2019 to November 2022, Hsu allegedly failed to file sales tax returns and hid approximately $80 million in sales while running dispensaries in Los Angeles, Orange, and San Bernardino counties.
- A joint investigation by the California DOJ and CDTFA led to the seizure of $2.2 million in cash, 125 pounds of untaxed marijuana, electronic devices, and evidence; the complaint includes 66 counts such as tax evasion, unlicensed business operation, and money laundering.
- The case highlights the impact of tax evasion on community funding and underscores the need for fair business practices, with prosecution led by the DOJ’s Special Prosecutions Section and the Tax Recovery in the Underground Economy Task Force.
California Attorney General Rob Bonta announced today that felony charges have been filed against an unlicensed marijuana retailer accused of evading $7.1 million in taxes while operating dispensaries across multiple Southern California counties.
The complaint names Pin Hsien Hsu as the defendant. State officials allege that from April 2019 through November 2022, Hsu operated numerous unlicensed marijuana dispensaries in Los Angeles, Orange and San Bernardino counties, failed to file sales tax returns and did not report approximately $80 million in sales.
According to the Attorney General’s Office, Hsu evaded roughly $7.1 million in sales tax owed to the California Department of Tax and Fee Administration.
“Evading taxes through hazy business tactics is not a victimless crime and it carries serious consequences,” said Bonta. “When individuals and businesses deliberately avoid their legal responsibilities, they are shifting the burden onto honest taxpayers and depriving communities of essential funding.”
The case stems from a joint investigation by the California Department of Justice and the CDTFA. During the execution of search warrants, investigators seized about $2.2 million in cash, 125 pounds of contraband untaxed marijuana products, 62 electronic devices and 14 boxes of related evidence.
The complaint includes 66 counts, including failure to file sales tax returns, engaging in business without a permit and money laundering. It also includes a white collar crime enhancement alleging losses of more than $500,000.
“Cases like this underscore the importance of a level playing field for all businesses,” said CDTFA Director Trista Gonzalez. “Cannabis businesses that do not pay their fair share deprive important programs of critical funding, including youth substance abuse prevention, environmental restoration, and cannabis research.”
The case is being prosecuted by DOJ’s Special Prosecutions Section. Officials said the investigation was handled through the Tax Recovery in the Underground Economy Task Force, which focuses on underground financial crimes in California.