Feds Appear to Open Criminal Investigation Into La Mota and Shemia Fagan

The fallout continues over Fagan’s contract with the politically connected founders of an embattled cannabis chain WW first wrote about in March.

La Mota dispensary in St. Johns. (Chris Nesseth)

The U.S. Department of Justice has issued subpoenas to at least two Oregon state agencies in the past week as agents search for information ahead of the convening of a grand jury later this month. The DOJ appears to be seeking further elaboration of the relationship between former Oregon Secretary of State Shemia Fagan and La Mota, the embattled cannabis chain whose founders Fagan went to work for in February.

Fagan’s contract with Rosa Cazares and Aaron Mitchell, the founders of that chain, led the secretary of state to resign after WW broke news of the lucrative contract on April 27.

State agencies that were issued subpoenas include the Oregon Liquor and Cannabis Commission and the Oregon Government Ethics Commission, agency officials confirm. Ron Bersin, executive director of the Ethics Commission, declined to provide a copy of the subpoena issued to his agency, citing the advice of legal counsel from the Oregon Department of Justice, which has not responded to inquiries about the investigation.

The Oregonian first reported about the impending grand jury Monday evening, and also revealed that two other state agencies, the Oregon Department of Revenue and the Secretary of State’s Office, were also subpoenaed.

It’s unclear what exactly the grand jury will hear prosecutors argue and whether it will focus primarily on Fagan’s consulting contract or on La Mota, whose owners and the companies they control have been issued more than $7 million in state and federal tax liens in recent years.

Two state investigations are already ongoing into the matter. The Oregon DOJ hired a California firm to investigate an audit of the OLCC that Fagan oversaw and which she helped shape around the concerns of Cazares. The Audits Division released that audit shortly after Fagan confirmed her contract with La Mota, but its validity was immediately thrown into question.

The Ethics Commission is also investigating Fagan’s contract, which paid $10,000 a month for research on out-of-state cannabis regulations. Oregon ethics laws prohibit public officials from using their office for private gain.

WW first reported on the business and political activities of Cazares and Mitchell in a March 29 cover story. The owners, who moved to Oregon from Florida around 2009, amassed real estate across the state and opened more than 30 dispensaries. As they did so, dozens of lawsuits allege, the couple failed to pay their bills—even as they contributed to the campaigns of top Democrats, including Fagan and Gov. Tina Kotek.

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