Oregon Dispensary Tax Payment Stolen by Taxman

By Keith Mansur
Oregon Cannabis Connection

June 15, 2017 – Adding yet another crazy reason the marijuana banking system is ridiculous, a medical marijuana dispensary in Klamath Falls, Oregon, had their cash payroll tax payment stolen … by the tax man himself!

On Tuesday, Salem Police arrested Theodore Raymond Paulsen, 55, an employee at the Oregon Department of Revenue, for first degree theft, mail theft, first-degree official misconduct and possession of methamphetamine. He was released on his own recognizance with orders to appear in court July 12.

Ed Medina, the dispensary owner, mailed his deposit certified mail with signature required on January 17, 2017 to the Oregon Department of Revenue in Salem. They received the payment on January 20.

“I didn’t know until Department of Revenue sent me a letter stating it was never received about a month later,” Ed Medina told Oregon Cannabis Connection.

It contained Western Union money orders, which he is forced to purchase since federal regulations make normal banking almost impossible. Almost all cannabis businesses operate with cash and money orders.

Medina felt like the authorities were unhelpful initially, and got the runaround from a couple of different law enforcement agencies.

“After multiple contacts with the Department of Revenue explaining the situation, and getting no help whatsoever, I contact multiple law enforcement agencies, including the Postmaster General, Oregon Department of Justice, Klamath Falls Police, Oregon State Police, Marion County Sheriff’s department, and Salem Police. Each of those agencies claimed it wasn’t their jurisdiction,” Medina explained. “I got the run around for two days straight. I explained that I had copies of all of the documents, including copies of the signer for the certified mail, and copies of the forged and cashed money orders.”

After The Salem Police told him that they could do nothing without a Klamath Falls Police report being filed, he convinced the Klamath Falls PD to file a report. Eventually they started to investigate, but Medina felt they were less than helpful about the theft.

“All in all, it felt as if all [the agencies] involved did not feel this was a priority, or something they wanted to deal with,” Medina said. “It was obvious that they all expected me to just drop it, but I persisted.”

He finally mailed all the documentation he had, including the mail receipt with Paulsen’s signature, and the money order documentation showing the deposits. Once they did finally investigate, they quickly moved to make the arrest within a few weeks.

“I emailed all of the copies I had to the Salem PD officer, and that was that,” Medina explained. “Several weeks later they contacted me to say an arrest had been made, and that it was an employee of the Oregon Department if Revenue.”

The problem of cannabis business banking is a serious issue nationwide, and thousands of businesses are subject to discrimination due to the status of marijuana as a Schedule I controlled substance. Having that designation—which means the drug is treat the same as narcotics such as methamphetamine and Heroin—has been the main barrier to federal approval in many areas, including banking regulations.

“If we were allowed to have a bank account, all of this could have been avoided,” said Medina. “I also believe this should exemplifies the dangers of our industry due to the unfair laws and regulations … It shows the double standard imposed on cannabis businesses, and the jeopardy it puts us in.”

In the end, Medina won the fight but he feels like a second class citizen simply because he runs a medical cannabis dispensary. They authorities did not believe him, even though he had all the documentation to prove it.

“I do feel vindicated, since the department of revenue treated me as if I was the criminal, and threatened legal action if I didn’t pay up,” he said. “They did not take my case seriously, and I am still waiting for an apology.”

At least two other individuals are being investigated in the case and may have colluded with Paulsen in the fraud. The search warrant also indicated other tax theft incidents may have occurred. The investigation is ongoing.

Watch this video from KOTI TV in Klamath Falls on the story.

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