Grow house cases enter phase two

Prosecutors for the federal government and a Florida regional task force have built fraud cases against dozens of mortgage lenders in the Miami area.

Highlands County Sheriff Susan Benton said the lenders will be charged with conspiracy to engage in a criminal enterprise - marijuana grow houses.

The mortgage lenders knew their customers would use loans to buy Highlands County houses and raise marijuana, said Michael Durham, the sheriff's attorney.

Benton had a list with dozens of names. Thirty-nine cases are ready to go, the sheriff said. Another 15 or 20 are still being investigated, so potentially 60 cases will be filed against banks and mortgage lenders.

One case produced at least 15 grow houses, Durham said.

All were financed in the Miami area, not locally, Benton said.

"All these cases are now being worked as mortgage fraud," Durham said. In two separate busts, six suspects were arrested in the Miami area.

"Most of these were 'no doc' loans," Durham said. No documents were used, meaning the lenders took the word of the borrowers about where income came from and how much income could be used to repay the loans.

Four-year battle

Since 2006, a countywide task force has busted about 90 grow houses. Nearly all the defendants were from the Miami-Fort Lauderdale area.

Benton and Durham either aren't sure who conceived the operation, and they were closed-lipped about the potential arrests of higher-ups.

Thousands of items have been seized. Under state and federal laws, the sheriff's department could sell or use the contraband.

Of the grow houses that were confiscated, some were sold, but they didn't produce much income for the sheriff's office, Durham said. After the marijuana, tables, shelves, grow lights and extra air handlers were removed, many houses looked like dumpsites inside, he said.

Since they were heavily financed, more was owed on the house than it could be sold for. The most profitable were settled for about $10,000 in equity, Durham said.

Gifts

Deputies seized more than $300,000 worth of contraband, according to an estimate by the sheriff's attorney. It had to be disposed of legally, so Benton decided to give away the useful items. Although some went into evidence storage containers, other items were donated.

Mowers went to the Highlands County Road and Bridge Department, the animal shelter, and one was used by the sheriff's farm, which grows food for the 370 inmates in Highlands County Jail. Other equipment and supplies, like fertilizer, went to the Sebring High School agriculture department.

Lumber was used by the grow house defendants to build shelves and tables. When deputies found quantities of materials, they liberated it for better causes, like South Florida Community College's electrical department, and Rebuilding Together Highlands County.

"We got a lot of stuff from them," said Paul Devlin, treasurer. Lumber was used to build handicapped ramps, to repair roofs, to refurbish houses.

"Every bit of it, we put to use," Devlin said. After Habitat for Humanity took over the program, some was donated to Habitat.

About 300 guns have been destroyed recently, Benton said, although not all were associated with the grow house cases.

Durham said about $100,000 in cash was seized inside grow houses.

Most houses contained only $2,000, Durham said. "Payroll money."

Once, though, officers got lucky and raided a house while the paymaster was there, and grabbed about $65,000. In another case, they confiscated $20,000.

Is it over?

This year, the evidence rooms at Highlands County Sheriff's Office began to return to normal.

An average of 800 items are received per month now, and about that many items are disposed of or sent to the Florida Department of Law Enforcement.

A March 11 internal affairs routine report showed the evidence areas were "clean and unremarkable," a far cry from 2008 when a political opponent was criticizing Benton before the November election.

Back then, three dozen evidence items were missing, or at least they couldn't be found.

With the exception of the mortgage fraud prosecutions, Benton and Durham think the grow house operation is at an end in Highlands County. The last house they raided was on Dec. 31, 2009.

There may be more grow houses in the county, but they're well hidden, they said. The power companies are watching for spikes of electricity. Grow house operators illegally tap directly into the power lines, and siphon off thousands of dollars of power per month.

"They've gone somewhere else," Benton predicted, the counties in northern Florida, perhaps.

In 2008, more than 35,000 pieces of evidence was in the department's inventory. Benton said her staff of five was overwhelmed by the grow house busts. They ran out of room downtown at the sheriff's department, so storage pods and semi-trailers were rented.

Sgt. Jamie Casey said one of the semi-trailers and two of the pods rented to store evidence have been returned.

Benton and Durham are unsure how much evidence will be needed to prosecute the mortgage fraud cases. They think previous paperwork, computer discs, photos and testimony should be sufficient, but federal and Florida task force prosecutors may ask for more, so they don't want to prematurely destroy evidence.