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OKLAHOMA CITY (KFOR) – The Western District of Oklahoma said an Oklahoma City man pleaded guilty to making a false statement to a bank in order to open an account for his medical marijuana business. His LLC also pleaded guilty to laundering more than $770,000 in marijuana proceeds through that account.

“There is an unfair set of regulations set upon marijuana businesses, because the federal government still deems it as illegal,” said expert and former dispensary owner Kent Malavé. “And there are a lot of regulations at the state level to control it.”

Prosecutors said Victor Ngo pleaded guilty to lying to a bank to store his earnings from his medical marijuana dispensary. According to documents, between May 29, 2019, and Jan. 22, 2020, Ngo operated Cannabless, which “at the time, Cannabless was not in full compliance with Oklahoma’s medical marijuana laws.”

Malavé told KFOR marijuana dispensaries run on cash, making them an easy target for crimes. Many banks can’t accept the cash because pot is still federally illegal.

“We have no place after the cash to put it. The banks don’t allow us that,” said Malavé. “That cash business is one that you have to make sure that you do not put it in the banking system. Otherwise, you’re laundering money.”

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Prosecutors said the 33-year-old Ngo opened an account for a wellness and fitness company, Friendly Management Group LLC, “when in fact FMG engaged in marijuana-related business.”

“You’re seeing someone trying to skirt the law because the law is somewhat unfair to that given business,” said Malavé.

Prosecutors said Ngo made cash deposits nearly every day and broke up the transaction to make sure they were under $10,000 to avoid tipping off the feds.

Ngo pleaded guilty to making a false statement to a bank. As part of his plea, Ngo agreed to pay back $621,570. FMG pleaded guilty to structured money laundering more than $770,000.

Malavé said if pot was federally legal, banks would gladly take dispensary’s cash.

“They would love to make money on our money,” he said. “What we really need, in all honesty, is for the federal government to change the regulations on marijuana. It’s silly the way it is now.”

Prosecutors said Ngo faces up to 30 years in prison and a potential fine of $1 million. FMG faces a potential fine of $770,000 or an amount equal to the value of the funds involved in the money laundering transactions.

Malavé suggests dispensaries store their cash in safety deposit boxes as long as they inform the bank as to what’s going on.

KFOR reached out to Ngo’s attorney, who said they could not comment until after the sentencing.