A Grosse Pointe Park businessman who laundered $10 million in drug sales that prosecutors say bankrolled his lavish lifestyle — and helped pay his court-ordered child support — got a big break in court this week.
Matthew Adams was sentenced to three years in prison, a stark difference from the 12 to 13 years that prosecutors were seeking for a nearly decadelong criminal scheme that helped one wealthy executive get opioids and another get rich.
According to the federal government, a millionaire opioid addict paid Adams $10 million over nine years to get him his drugs — money that Adams spent on private flights, golfing, jewelry, gambling, court-ordered child support, hotels and a gun. He also bought luxury cars with his drug proceeds, the feds say, including a Cadillac Escalade, a Hummer and multiple classic cars.
He hid all this from the IRS, cheating on his taxes while he was cashing checks by the millions and depositing them into personal accounts, according to Acting Deputy Assistant Attorney General Stuart M. Goldberg, who announced the sentence on Tuesday.
Here’s how the scheme operated
According to documents in the case, Adams sold drugs to a crooked corporate executive for nine years, pretending it was for legitimate work. But the two businessmen were in cahoots.
From 2008 through 2017, Adams sold drugs to the executive, who paid for the narcotics using money he embezzled from his company, described only as Company A in Adams’ court records.
The two agreed to make it look like the payments were for legitimate work to Adams; company, MDA Property Services, when it was really for drugs.
The IRS found the money
According to the government, from 2013 to 2017, the executive paid Adams $10 million in checks drawn from his company. Adams did not report the millions of dollars in income he made selling drugs on his income tax returns for 2013-16. He failed to file a 2017 return altogether.
But an IRS investigation would eventually find the money.
Adams, federal agents would learn, deposited some of the checks into his personal and business bank accounts, and cashed checks for another $5.3 million through a local liquor store.
In 2017, Adams and his company came under audit by the IRS. During the audit, the government says, Adams lied to an IRS agent multiple times, including by claiming that 90% of the money MDA Property Services was being paid by Company A was for legitimate work, when the true figure was 3%.
In addition to his prison term, U.S. District Judge Matthew F. Leitman ordered Adams to pay $3.5 million in restitution to the IRS, and serve three years of supervised release.
Defense lawyer blasts government
Defense attorney Sanford Plotkin blasted the government in his sentencing memo, maintaining his client was being punished far more severely than the executive who allegedly used a learning-disabled man to feed his opiate addiction.
“During the course of decades of practice in this District, (I have) never encountered such a gross disparity in the treatment of co-defendants resulting from the government’s charging decisions,” Plotkin wrote.
According to Plotkin’s memo, the unnamed executive who embezzled $10 million from his family business to finance the drug scheme is Brandon Johnson, formerly CEO of a company known as GTJ.
“Johnson knew Adams was vulnerable and always desperate for a job, as he was severely learning disabled, and had few options at that time in his life. Johnson created this monster,” Slotkin argues. “Yet, the government allows him to plead guilty to a tax charge, exposed to almost 10 years less prison time than Matt Adams.”
According to court records, Johnson pleaded guilty to two counts of filing false tax returns in January 2021. In exchange for his plea, the government agreed not to prosecute him for conduct relating to his opioid scheme, though Johnson admitted in his plea agreement that he funneled money from his company to pay his opioid supplier.
The memo continues: “In stark contrast, the government forces Matt Adams, the young, impressionable, learning disabled day laborer to plead guilty to money laundering guidelines with an advisory range of 151-188 months (in prison) in addition to a tax charge. “
The question remains, he wrote: “Why should Johnson, the creator and financer of the scheme, not be charged with money laundering conspiracy, as well?”
Nonsense, government says
The government scoffed at the defense’s claims that Adams was taken advantage of by a powerful man with means.
“Adams makes out like he is a victim in this case,” Department of Justice Attorney Sam Bean wrote in a sentencing memo. “That description does not reflect the actual events, whatsoever.”
Bean argued that while “there may have been a power disparity when Adams first started selling narcotics” to his former boss, that wasn’t the case when Adams left the company and started his own business.
“And when Adams stopped receiving any legitimate work from Individual A,” Bean wrote, “he persisted in selling” him drugs.
Bean urged the judge to give Adams a serious punishment for contributing to America’s opioid epidemic.
As he put it, “Adams … was essentially a concierge drug dealer.”
By Tresa Baldas, Detroit Free Press
Contact Tresa Baldas: tbaldas@freepress.com
Tags: Arrests Drug Trafficking Money Laundering Opioid Crisis Rx Fraud
