This morning, prominent Thornton restaurant owner Dan Tang pled guilty to one count of money laundering for his role in what investigators labeled the "Dan Tang Drug Trafficking Organization
When authorities took down the drug ring in February 2008, they came away with 24,000 marijuana plants growing in 25 suburban homes, along with $3 million in cash and more than $1 million of growing equipment.
Operation Fortune Cookie was the largest indoor marijuana bust in state history -- but behind the scenes, the investigation began to fall apart soon after the arrests. A tip-off letter had alerted the drug ring about the investigation, and afterward, the DEA launched a rancorous internal investigation into the North Metro Task Force, the police agency that started the case, looking for the leak. The results of the lengthy inquiry were never released, but in the year following the bust, half of the eighteen-member task force left or were reassigned.
In the meantime, it took prosecutors sixteen months to charge the ring's namesake with a crime.
"Yes, I did wrong," Tang said through this morning through a Cantonese interpreter at the court hearing. "At that time, I knew I did something wrong, but I didn't know it was so serious." Until the bust, Tang was best known for hosting mayors, senators, district attorneys and governors at his celebrated Thornton eatery, Heaven Dragon, and for personally serving his Peking duck to President George W. Bush three times during his presidency.
As first reported in Westword last month, in exchange for Tang's guilty plea, the government will get to keep roughly $1 million it seized during the investigation but will allow Tang to retain ownership of Heaven Dragon and other properties in which he is a partner.
Federal prosecutors have also recommended Tang receive 11 to 30 months of prison time and/or probation, considerably less than the 70 to 87 months indicated by the advisory sentencing guidelines for the case. The maximum allowed for the money-laundering crime is twenty years in prison, and Chief U.S. District Judge Wiley Y. Daniel, who's presiding over the case, will determine Tang's sentence at a 10 a.m. hearing on February 11.
At the hearing today, Assistant U.S. Attorney Stephanie Podulak explained that prosecutors were recommending the reduced sentence for several reasons, including concern over how a lengthy prison term would impact his restaurant business, which employs 25 to 30 people; recognition of his many years of community involvement; and indications that Tang's cultural heritage and mental health issues played a role in his crime. Podulak also suggested Tang's role in the drug ring was minimal compared to the twenty other people charged in state and federal courts as part of the investigation. Some of those defendants are Tang's relatives, and all of them, unlike Tang, were charged with drug-related crimes.
"His conduct... was limited in a scope of time to some specific actions that make him a little bit different than some of the other defendants that were engaged in longer-term marijuana cultivation," said Podulak at the hearing.
Added Michael Axt, Tang's lawyer, "He's never seen a marijuana plant. He's never smoked marijuana and he doesn't know what marijuana is other than it's illegal to grow."
But as Westword reported last month, thousands of pages of internal investigation documents show that law-enforcement officials believed Tang had much more involvement in the grow ring than just money laundering. At a February 27, 2008, interview with DEA agents, for example, Tang said that he loaned large amounts of money to numerous family members for what he suspected was marijuana cultivation and expressly discussed financing a pot grow when he loaned more than $30,000 to his brother-in-law in exchange for 30 percent of the profits. While several suspects said Tang did not have much involvement with the drug operation, others described him as its key financier. A few Heaven Dragon employees said they wound up working in the drug ring or helping others buy grow houses.
A March 2009 IRS report in the investigation concluded that the evidence collected during Operation Fortune Cookie showed that "in or about 2007 to April 18, 2008, Dan Khau Tang conspired to cultivate and/or distribute multi-pound quantities of marijuana in the Denver, Colorado area and other parts of the United States."
Federal prosecutors didn't charge Tang with drug conspiracy because there wasn't evidence tying him to the cultivation or distribution of the marijuana, explained Podulak during a phone interview last month. Plus, she added, "There would have been the exact same repercussions with a drug plea as with the money-laundering plea."
Authorities mis-characterized Tang from the get-go, explained Podulak. Because of his financial and political standing, she says, "Everybody picked this guy and said, 'It's his organization.'" That's why the ring was called the Dan Tang Drug Trafficking Organization. In reality, she says, "He didn't start this and get everybody else involved. He was dragged in by his brothers who were far less successful than he was."
Podulak says she does not believe the upheaval behind the scenes of the investigation had any impact on Tang's case. But the well-connected restaurateur was acquainted with several prominent locals, some of which had ties to the case. For example, soon after the busts, Tang had two local politicians, Thornton mayor Noel Busck and Adams County Board of Education member Fred Schaefer hold $800,000 for him that he was trying to keep away from authorities. Both politicians quickly returned the money, and have not been charged with any crimes.
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Sergeant Dante Carbone, one of the police officers on the investigation, had also known Tang for years, something several of his colleagues on the case say they didn't know. Carbone met regularly with his close friend Wayne Campbell, the U.S. attorney originally assigned to the case. Campbell has since been reassigned.
As for the results of the DEA investigation into the source of the tip-off letter, Podulak says the agency's final report "Does have a theory, does have a person who is believed to have committed the offense, but we believe there isn't sufficient evidence to charge this person... It would be very unfair to point the finger at a police officer without supporting background. That person's reputation would be gone."
Another part of Tang's plea deal is that the government agrees not to pursue any criminal tax matters. According to documents obtained by Westword, in an April 2009 interview at the U.S. Attorney's Office, Tang reported that he'd skimmed more than $500,000 of unreported income from Heaven Dragon's books, part of which he used to buy the Armadillo restaurant in Broomfield, an establishment that later became Heaven Star restaurant. A City of Thornton audit also noted that Heaven Dragon under reported more than $500,000 in sales in 2002.
A final stipulation of the plea agreement is that Tang's wife, Xiu Ying Li, will not be charged with any federal crimes, although she does relinquish any claim to the assets Tang is forfeiting. In May 2009, Li told DEA agents that with her husband's knowledge, she gave her brother about $30,000 from Heaven Dragon proceeds to start a grow house.