A San Luis Obispo County cannabis dispensary founder will plead guilty to bribing late county supervisor Adam Hill in exchange for favorable votes, influence over other government officials and confidential information, federal prosecutors announced Wednesday.
Prosecutors charged Helios Raphael Dayspring, 35, of San Luis Obispo with one count of bribery and one count of subscribing to a false 2018 income tax return, when he allegedly deliberately failed to report millions of dollars to the IRS, according to a U.S. Department of Justice news release.
Dayspring allegedly paid the late District 3 supervisor $32,000 in cash and money orders in exchange for beneficial votes on issues related to his farms, including those in favor of legislation that allowed cannabis grows to operate before receiving final permit approvals, the release said.
The bribes to Hill allegedly began in fall 2016 and continued through November 2019. When asked if Hill would have faced charges were he still alive, U.S. DOJ spokesman Thom Mrozek said, “I cannot answer that question.”
Hill died by suicide at age 54 in August 2020.
Dayspring also admitted that he and a business associate attempted to bribe former Grover Beach Mayor John Shoals with $100,000 during a dinner meeting in September 2017. Shoals never responded to the offer, and Dayspring didn’t pay the bribe, the release said.
The Tribune has reached out to Shoals for comment on Dayspring’s charges. Mrozek said he could not comment on whether Shoals cooperated in the investigation or reported the bribery attempt.
A plea agreement filed by prosecutors will allow Dayspring to plead guilty to the charges, pay $3.4 million in restitution to the IRS and cooperate in the ongoing investigation.
He will face a maximum sentence of 13 years in federal prison.
Dayspring Bribed Supervisor With Money, Cannabis Products, Meals, Prosecutors Say
According to the plea agreement filed in U.S. District Court Wednesday, Dayspring operated and had a controlling interest in multiple cannabis farms and dispensaries that required approval from SLO County and the city of Grover Beach.
The court filing says that beginning in fall of 2016 and continuing until about November 2019, Dayspring paid a sitting county supervisor — it does not mention Hill by name — approximately $29,000 in unreported cash payments. During the same period, Dayspring also gave Hill cannabis products free-of-charge and paid for multiple meals for Hill, according to the filing.
Dayspring did so, the U.S. DOJ alleges, for favorable votes on cannabis legislation, advocacy to other public officials and the disclosure of non-public county information regarding cannabis-related issues for the benefit of Dayspring’s businesses.
Two of the matters cited by federal prosecutors from which Dayspring benefitted was the September 2016 moratorium on cultivation of cannabis in the county’s unincorporated areas, which included an exemption from enforcement for existing farms registered with the county, as well as a November 2017 extension on an abeyance of enforcement action on Dayspring’s farms. Hill voted for both.
The U.S. DOJ says that Dayspring began paying Hill cash, first starting at $1,000, and gave Hill three $1,000 money orders. Those were deposited in Hill’s personal bank account, the agency says.
Hill then solicited more bribes; he was given $3,000 in 2016 and $5,000 in 2017, the filing says. He took another $5,000 in cash as well as cannabis products in early 2018.
In December 2018, Dayspring and Hill discussed “the importance of having (Hill) and other county supervisors approve the continued abeyance on enforcement action and how a lapse in the abeyance would affect his cannabis farms.”
“Specifically, defendant told (Hill) in a text message that ‘it’s really important u guys extend the timeframe for submission and don’t allow other people in yet’ referring to the county’s impending vote on Dec. 11, 2018, to extend the abeyances on enforcement action against cannabis cultivators,” the filing reads.
Hill responded: “Got it. We’ll see what we can do. Extension of timeframe seems reasonable and probably no one else in until everyone has been deemed complete.”
Dayspring responded that Hill was the “man.”
On Dec. 12, 2018, Hill told Dayspring by text that the board approved the extension, to which Dayspring replied, “Thank God …”
In early 2019, Hill accepted another $5,000 in cash outside an Avila Beach restaurant, the filing says; the supervisor took another $5,000 in cash following a dinner in Pismo Beach that November.
In January 2020, Hill was the deciding vote when the board again extended the abeyance 3-2.
At another Board of Supervisors meeting in March 2019, Hill texted Dayspring during a series of straw votes regarding the proposed banning of all outdoor cultivation, which would have severely impacted Dayspring’s businesses.
At one point, Hill texted Dayspring that he “had to keep these f—s (other county supervisors) from going way beyond and it is exhausting! Where’s the industry (financial) support for my re-election??”
Dayspring responded: “were (sic) all (you) need lol.”
Hill also requested Dayspring take him out to dinner for his birthday, which Dayspring paid for, and was then given another $5,000 in cash.
The filing adds that Dayspring and Hill held a political fundraiser at Hill’s home where $13,000 was raised in June 2019.
Dayspring Attempted to Bribe Grover Beach Mayor, Filing Says
Dayspring’s illicit activities spread to city government as well, federal prosecutors allege.
In 2017, Grover Beach began accepting applications for cannabis dispensary permits. Dayspring sought two permits.
In September 2017, Dayspring, an unnamed business associate and Shoals — referred to only as Mayor 1 — met at a restaurant in Arroyo Grande.
“On their way to the meeting, business partner 1 told (Dayspring) that (Shoals) had been pushing business partner 1 for a bribe in exchange for their cannabis permits,” the filing reads. “Business partner 1 told defendant that this meeting was their chance to bribe (Shoals).”
During the meal, the filing says, Dayspring showed Shoals his cell phone with the number “100,000” typed out, and said “it was for two.”
“Defendant wanted to convey to (Shoals) that (Dayspring) and business partner 1 were prepared to pay $100,000 to (Shoals) if ( Shoals) used (his) official position to secure two cannabis dispensary permits” for Dayspring and his associate, the filing says.
Shoals did not respond to that offer at the dinner, prosecutors said.
The city later awarded Dayspring a single permit. After that, Dayspring allegedly asked his business associate whether they owed Shoals $50,000, prosecutors allege, and the business partner said “their proposed deal required that defendant and business partner 1 receive two permits.”
Mrozek, the U.S. DOJ spokesman, declined to say whether Shoals cooperated with federal investigators, or whether he ever reported the attempted bribe.
2020 FBI Investigation, Hill’s Death
County officials became aware of the federal investigation in March 2020, when FBI agents served a search-and-seizure warrant at the San Luis Obispo County Government Center. Agents also searched a Pismo Beach home and an undisclosed third location on the same day.
The nature of the warrants was unknown at the time, as they were under seal.
In May 2020, the FBI questioned county supervisors John Peschong, Debbie Arnold, Bruce Gibson and Lynn Compton regarding government corruption.
“They told me I’m a witness,” Peschong told The Tribune. “They asked me if I understood the Brown Act, asked me if I understood the rules of the (Fair Political Practices Commission) in California, asked me about the rules for accepting gifts, asked if I understood how to recuse myself from a vote if I have a financial interest.”
Peschong said investigators “talked to me about a supervisor, which I probably should not name names.”
On the day of the March searches, Hill — who was open about his struggles with depression throughout his time in public life — attempted suicide.
Following his recovery, Hill returned to Board of Supervisors meetings. However, he eventually sought “specialized care” at a residential health program in July 2020 before his death the following month.
Gov. Gavin Newsom appointed Dawn Ortiz-Legg to fill the District 3 seat in November 2020.
County Officials React to Bribery Allegations
County and Grover Beach officials on Wednesday reacted to the charges and bribery allegations, although some declined to comment on the situation.
“Adam was a friend of mine, and I’m deeply disappointed and saddened to hear this news,” Gibson said.
Ortiz-Legg declined to comment, saying she had no personal knowledge of the matter.
Other supervisors said the announcement of Dayspring’s charges marked an end to the investigation that has hung over the boards’ head.
“I’m sorry to hear that, but I’m glad that there’s some resolution and that we can close the chapter, move on,” Compton said. “It’s a sad day for everybody.”
Arnold said, “this news brings closure to a long investigation.”
Grover Beach City Manager Matthew Bronson said the city needs more information and to do an internal review of the matter before it can be in a position to comment on the situation.
The Tribune has reached out to Peschong to request comments on the charges and bribery allegations, but Peschong did not respond as of Wednesday night.
Dayspring Founded 2 SLO County Dispensaries, 1 More On The Way
Dayspring, who is a graduate of Morro Bay High School, operated a number of cannabis operations in San Luis Obispo County and elsewhere in California, mostly under the name Natural Healing Center.
The first of his dispensaries opened in Grover Beach in 2018, followed by another in Lemoore in 2020, and a third in Morro Bay in April.
He was slated to open a San Luis Obispo location — as well as a Turlock location — sometime this year, but permit issues delayed the local project.
As of 2019, Dayspring also owned 18 properties in San Luis Obispo and Santa Barbara counties where he either grows marijuana or was planning to cultivate it, he told The Tribune at the time.
“I love the plant. I love growing it. I love smoking it,” Dayspring said in the interview, which focused on the legalization of recreational cannabis. “This has been a passion of mine for a long time.”
He said he spent millions transitioning into the legal cannabis market.
It is unclear what will happen to his businesses now that Dayspring has been charged.
Dayspring has also been embroiled in a series of lawsuits from former business partners, including a lawsuit by investor William Szymczak, who claims Dayspring allegedly diverted millions in company funds to himself, and used some to try to stave off IRS and FBI investigations.
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