18th Judicial District

Castle Rock man suspected of leading large-scale marijuana-trafficking ring

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A Castle Rock man has been arrested and named in an indictment that alleges he was a leader of a large-scale marijuana-trafficking ring that transported pot illegally grown at multiple locations on the Front Range across state lines.

The multi-jurisdictional investigation culminated in raids on 19 locations throughout the Denver metro on March 16, bringing 15 people into custody, including Michael Stonehouse, 53, of Castle Rock. The indictment describes Stonehouse, who is being held on $1 million bond, as leading an enterprise that distributed marijuana to Arkansas, Illinois, Missouri and Minnesota.

The 37-page document says most of the pot that was distributed was illegally grown in warehouses or farms in Elizabeth, Denver and Colorado Springs. While it is lawful to grow limited amounts of marijuana in Colorado, the quantities grown at the locations were more than legally permitted, and it is illegal to transport pot out of state.

Raids took place in Denver, El Paso, Douglas, Elbert and Arapahoe counties.

One suspect remains at large, although he is not in the state of Colorado, said 18th Judicial District Attorney George Brauchler.

Approximately 200 local, state and federal law enforcement officers carried out the operation, effectively shutting down a ring that allegedly produced more than 300 pounds of marijuana a month.

"They accomplished this in large part through a network of folks who used cell phones, coded language, all sorts of information like that to try to defeat the system," Brauchler said in a news conference March 17.

Stonehouse faces more than a dozen felony charges, including participating in organized crime, conspiracy to distribute 50 pounds or more of marijuana, and conspiracy to commit money laundering.

The criminal acts date to March 2014, Brauchler said, and the most recent one occurred early this month.

Drug exchanges were carried out in in highly populated areas and during broad daylight, Brauchler said. According to the indictment, that included a Starbucks parking lot in Castle Pines.

The investigation began after 845 plants — worth $5.1 million and weighing 2,500 pounds — were seized in September 2016 from a property in Elizabeth on County Road 13 owned by Stonehouse, the indictment says. That generated numerous leads, which opened the broader investigation, Brauchler said.

During the March 16 raids, law enforcement seized 39 weapons, including handguns, shotguns and rifles. Brauchler was not aware of any officers being injured while making arrests. Warrants were also issued to seven banks for 22 different accounts.

Also during  the raids, law enforcement discovered two hash oil-extraction labs, one in Elbert County and one in Denver.

Between 2014 and 2016, Stonehouse received more than $1 million in cash deposits into accounts he controlled, according to the indictment.

Barbara Roach, a Denver-based special agent in charge with the Drug Enforcement Administration, said the trafficking ring, and others like it, are motivated to circumvent the legal system for financial gain — and they endanger communities in the process.

"Yes, marijuana is being grown in Colorado for the specific goal of being sold and distributed outside of the state," Roach said at the March 17 news conference.

Steve Johnson, chief deputy with the Douglas County Sheriff's Office, said criminal enterprises like the one mentioned in the indictment rarely follow laws or building codes, hijacking water, electrical and chemical resources.

"Without flinching, we're going to take these on," he said, "and fight to protect our communities."

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