A San Clemente man pleaded guilty this morning to federal drug trafficking and tax offenses in relation to a string of nine illegal marijuana storefronts that generated millions of dollars in income.

John Melvin Walker, also known as “Pops,” 56, of San Clemente, pleaded guilty to one count of conspiring to distribute well over a ton of marijuana and to maintain  drug-involved premises. He also pleaded guilty to a tax evasion count in a second case that was filed in February.

The investigation into Walker’s chain of marijuana stores was conducted by the Orange County Sheriff’s Department; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; IRS – Criminal Investigation; the California Board of Equalization; and the Orange County District Attorney’s Office.

Walker was one of 14 people named in an indictment returned by a federal grand jury in October (see: http://www.justice.gov/usao/cac/Pressroom/2012/150.html). The indictment outlines a drug-trafficking conspiracy led by Walker, who owned and operated at least nine marijuana stores in cities across Los Angeles and Orange counties. The nine marijuana stores were Alternative Herbal Health in Long Beach, Safe Harbor Collective in Dana Point, Garden Grove Alternative Care in Garden Grove, Santa Ana Superior Care in Santa Ana, Belmont Shore Natural Care in Long Beach, Santa Fe Compassionate Health Care in Santa Fe Springs, Costa Mesa Patients Association in Costa Mesa, the Whittier Collective in Whittier, and APCC in San Juan Capistrano.

Walker, who has two prior felony drug-trafficking convictions from state court,  admitted that he directed the managers of his marijuana stores to shred records as part of his effort to conceal from tax authorities income earned from the sale of marijuana. Accordingly, it was routine for Walker’s managers to destroy sales records.

Walker admitted in the federal tax case that he earned approximately $25 million from marijuana sales over the course of six years. Walker specifically admitted that he earned $11.4 million in 2009, but reported to the Internal Revenue Service income of only $200,180 and that he owed $2,656 in taxes. In fact, as Walker admitted in the plea agreement, he owes the IRS $944,133 in relation to the 2009 tax year alone.

In relation to the tax years 2006 through 2011, Walker agreed to pay the IRS more than $2.4 million, as well as $1.8 million in restitution to the California Board of Equalization. In addition to the $4.2 million he has agreed to pay to federal and state tax authorities, Walker has agreed to forfeit to the government $25 million in illegally obtained income, which includes, among other assets, cash, his $1.7 million home in San Clemente, a string of mobile homes in Mammoth Lakes, rental properties in Long Beach, and his interest in two strip clubs.

The plea agreement provides for an enhancement to Walker’s sentence because he possessed firearms in relation to the drug-trafficking offense. Authorities discovered in one of Walker’s “stash houses” an AK-47-style assault rifle, three other firearms and ammunition. During a search of Walker’s residence, authorities also found nearly $400,000 in cash hidden in a safe, as well as another approximately $145,000 in cash throughout the house.

After Walker pleaded guilty to the drug conspiracy and tax evasion charges, he surrendered and is now in federal custody.

United States District Judge James V. Selna is scheduled to sentence Walker on July 22. At sentencing, Walker faces a maximum possible sentence of life in federal prison and a mandatory minimum sentence of 10 years. In the plea agreement, which contemplates a sentence of more than 20 years, Walker agreed not to argue for a sentence of less than 15 years. The actual prison sentence will be determined by Judge Selna.

The remaining defendants in this case are scheduled to go on trial on September 24.