Ex-marijuana regulator Rick Johnson 'a bad guy' in Lansing bribery scheme, lawyer says

An Oakland County businessman facing up to 10 years in federal prison for bribing Rick Johnson, the former chairman of Michigan's medical marijuana licensing board, deserves a big break from a potential stiff prison sentence and regrets doing business with a "bad guy," his lawyer wrote Wednesday.

What grew into the largest public corruption scandal in the state Capitol in 30 years started with West Bloomfield Township businessman John Dawood Dalaly seeking help navigating the dawn of the medical marijuana industry in Michigan, defense lawyer Raymond Cassar wrote in a sentencing memorandum filed in federal court in Grand Rapids.

Dalaly has cooperated with federal investigators, is remorseful, accepted responsibility and suffers from medical problems, including a history of coronary disease, that should be considered in issuing a much shorter sentence than the 30-months sought by federal prosecutors, his lawyer wrote.

“Mr. Dalaly cooperated from the beginning, was the first to plead guilty and accept responsibility for his actions,” Cassar told The Detroit News. “He feels horrible about how he did this and hurt his family.”

Dalaly is scheduled to be sentenced by U.S. District Judge Jane Beckering on Sept. 14 for paying bribes in exchange for receiving licenses to sell and grow medical marijuana. Prosecutors say he paid $68,200 in bribes to Johnson, a former Republican House speaker who was chairman of the licensing board from May 2017 through April 2019.

"John Dalaly is proof that good men can make bad decisions," Cassar wrote.

Dalaly pleaded guilty in April, 15 days after authorities announced charges against him, lobbyists Brian Pierce and Vincent Brown and Johnson. All four have struck plea deals with the government and are cooperating with the government. All four are to be sentenced this month.

The probe is ongoing, but so far, the FBI and Grand Rapids U.S. Attorney's Office have said Johnson received at least $110,200 in bribes aimed at influencing his actions as the marijuana licensing board's leader.

Dalaly, 71, previously agreed to plead guilty to paying a bribe to Johnson. The maximum penalty under federal law is 10 years of imprisonment, three years of supervised release and a fine of $250,000.

Starting in 2018, Dalaly bribed Johnson to obtain state licenses for a medical marijuana startup business and for help launching a digital payments business for marijuana transactions. In all, Dalaly paid bribes at least 25 times between January 2018-February 2019.

Dalaly admitted he hired Johnson's wife as a consultant at a rate of $4,000 a month. He was working on behalf of the company Pharmaco and had hired Jan Johnson to help him fill out application forms. That paperwork would eventually go before the Medical Marihuana Licensing Board that Rick Johnson chaired.

"It is important to keep in mind that John did not have some well-organized plan to bribe Rick Johnson," Cassar wrote. "John concedes that paying Johnson's wife for so-called consulting fees had 'red flags' all over it. John knew it was wrong even if Rick Johnson said it was not illegal because she was a consultant."

Dalaly's lawyer disagreed with the amount of bribes prosecutors say was paid to Johnson. The real amount is $48,000, Cassar said.

"... Johnson told him he needed money because he was losing his farm and Mr. Dalaly loaned him $20,000," Cassar wrote. "Mr. Dalaly provided the government with a document showing this $20,000 was intended as a loan."

In the memo Wednesday, Dalaly's lawyer objected to calculations that could result in a longer prison sentence. Specifically, he objected to Johnson being considered a public official in a high-level, decision-making position.

Johnson was simply one of five members of the marijuana board that required at least three votes to approve or deny a license application, the lawyer wrote.

"... Johnson did not control the board's decisions," Cassar wrote.

Dalaly is a hard-working, charitable man who migrated to the U.S. from Iraq as a child, and is a loving father of three and grandfather, his lawyer wrote.

One granddaughter recently questioned him about the federal conviction.

"Papa did business with a bad guy," Dalaly told her, according to the sentencing memo.

"John lives with regret and punishment every day when he sees what this has done to his family," Cassar wrote.

rsnell@detroitnews.com

X: @robertsnellnews