SALT LAKE CITY — The owners of a popular downtown music venue face federal charges for allegedly laundering millions of dollars in drug money to fund their business ventures.
Federal prosecutors allege Gabriel Seth Elstein, 33, and Angela Christina Elstein, 32, both of Park City, and Scott Dale Gordon, 48, of St. George, bought and sold at least 2,500 pounds of marijuana and laundered at least $5 million through Bondad Productions, a business that promoted electronic music/rave shows, and The Complex, 536 W. 100 South, over a six-year period.
"When it comes to marijuana, it's all about the cash," U.S. Attorney John Huber said in a statement. "Sophisticated organizations are driven by profits to exploit the insatiable desire for drugs in America."
Huber said the charges came after a multiyear investigation involving agents with IRS-Criminal Investigation and the Drug Enforcement Administration's Metro Narcotics Task Force.
The Complex, which has concerts scheduled out to next May, will remain open, according to the U.S. Attorney's Office.
A 13-count indictment charges the trio with drug trafficking, possession with intent to distribute a controlled substance, conspiracy to commit money laundering, promotion of money laundering, concealment of money laundering and money laundering.
Dumbles Holdings LLC is also named in the indictment. The Elsteins are managing members of Dumbles Holdings, which was started in 2015 with offices in Salt Lake City.
Gordon and the Elsteins pleaded not guilty to the charges at a hearing in U.S. District Court last week. Judge Clark Waddoups scheduled a trial for Dec. 14.
Prosecutors say the Elsteins and Gordon bought marijuana from wholesale suppliers in Northern California and recruited drivers to deliver it to Utah, Minnesota, Illinois and Wisconsin. They allegedly used retail distributors to sell the marijuana in those states.
The indictment alleges they took steps to hide and disguise the nature, location, source, ownership and control of the proceeds of the drug-trafficking organization.
Gordon and Gabriel Elstein built The Complex in 2009 for at least $1.3 million. About $400,000 came from marijuana proceeds laundered through Bondad Productions and The Complex bank accounts, according to the indictment.
The remaining $900,000 was paid directly to companies and individuals working on the project. Specifically, the indictment alleges that Gordon made cash payments to a person identified as L.M. in the indictment.
L.M. worked as the construction foreman and was responsible for paying the companies involved in the project. The payments Gordon made to L.M. were shrink-wrapped plastic bags in $50,000 increments and made on almost a weekly basis, the indictment says.
The indictment also alleges that Gordon used marijuana cash proceeds to pay expenses for music shows.
Prosecutors are seeking to seize The Complex as well two properties in Park City.