New York Gov. Cathy Hochul signed a bill last month that could help investigate possible ties between terrorist organizations and New York City's illegal smoking establishments, but compromised the bill to delay implementation for three years. is a major hurdle, sources told the Post.
Hochul at the end of 2023 Signed the LLC Transparency ActIt gives law enforcement the right to stop limited liability companies, known as LLCs, from doing business in New York, which do not reveal the identity of their owners.
Supporters of the new law aim primarily to crack down on low-lying landowners, but it could also help crack down on much-needed terrorist networks, such as Yemen's Houthi rebels, who have recently attacked cargo ships in the Red Sea. Some experts say there is.
“Many of us suspect there are international connections,” state Sen. Brad Hoylman-Sigal, a co-sponsor of the bill, said of the smoke shops. “We don't know if they are the vanguard of a terrorist organization.” It's like the Houthis, but we're seeing some strange uses for money laundering. ”
Mr. Hoylman-Sigal said he discussed terrorism concerns with Mr. Hochul's office in December.
Some New York City lawmakers believe the city's fast-growing chain of marijuana shops, which the City Council estimates number 8,000 stores, is linked to Middle Eastern terrorist groups, including the Houthis, the Post reported. There are concerns that this could become a source of funding for and Hezbollah. Most smoke shops are listed as LLCs.
However, there are some important obstacles. Among them is the fact that the law Hochul signed delays new disclosure requirements until the end of his 2026.
In response, Hoylman-Segal said she plans to support a bill from earlier this year that would give New York City and police the power to inspect illegal stores.
Currently, only the state Marijuana Control Bureau and sheriffs have that authority.
He also said he supports Governor Hochul's budget proposal that could give OCM the power to shut down illegal stores in the NYPD.
The text of that proposal has not yet been submitted to the state Legislature.
“I think the current law is so Byzantine and confusing that I haven’t seen any explicit authority even given to the attorney general,” Hoylman-Sigal said.
In October, Chris Irben, a former DEA agent and managing director of the global law enforcement firm Nardello & Company, told the Post that federal agents had discovered in recent years that cash from K2 drug sales throughout New York City had been stolen. He said he was gathering evidence that it was helping finance the Yemen-based Houthis. Fighter plane.
“In recent years, a significant portion of synthetic drugs have been sold through gas stations and warehouses in New York, and it is likely that significant amounts of the funds from those sales were transferred to Houthi militias,” Erben said.
More broadly, Erben said, the marijuana that ends up in some illegal smoke shops has ties to criminal networks in China, one of the largest marijuana growers in the United States.
Erben said Chinese financial institutions have also historically done business with Lebanese money laundering networks.
If the latter is involved, there is likely a link to the Iranian-backed terrorist organization Hezbollah, he added.
While the LLC Transparency Act is a good first step, Erben is skeptical that it will solve the problem.
“Illegal stores are not going to reveal their true owners under this law,” Erben said. “But it will force them to adapt and change. Networks will now have to collude to hide their true owners.”
White-collar defense attorney Brian Ketchum agreed, predicting that many owners of illegal smoking establishments would name “straw men” as owners, who are required to do so under the new law. It said it would not have a minimum 25% ownership interest.
Under the new law, law enforcement agencies will be able to request three years of tax returns.
Illegal smoking shops often do not pay taxes, giving police the means to threaten “straw men” with criminal prosecution.
“The LLC Act is probably off to a slow start, but I think it will become more effective over time as law enforcement uses the names of these stragglers to unearth leads,” Ketchum said. Told. “This makes it much easier to get to the real bad guys.”
Enforcement agencies have increased the pace of inspections of cannabis stores since the City Council passed a law in June that made commercial landlords responsible for renting out their storefronts to illegal smoke shops.
Earlier this month, state inspectors seized marijuana that was being sold illegally at a Brooklyn “marijuana cafe” that had a fake state license blatantly displayed in its front window, the Post reported.
“369 inspections were conducted, including 103 re-inspections of locations believed to be selling cannabis without a formal license. As a result of these inspections, 305 violation notices/cease and desist orders were issued. was issued and more than 11,600 pounds of illegal product with an estimated street value of $55 million was seized,” New York OCM spokesman Aaron Gitelman told the Post.
“While we are working with the Tax and Treasury Department and other state government partners to end this illegal activity, a new LLC database accessible to state agencies will help us find and retain the owners of these stores. “It could improve their ability to be responsible.” Gitelman added.
