US ATTORNEY ANDREW LELLING on Friday accused Fall River Mayor Jasiel Correia II of running the city as a “pay-to-play institution,” using the leverage provided by the state’s marijuana law to shake down marijuana vendors for hundreds of thousands of dollars in return for approvals they needed to advance their projects.

Correia was already facing federal charges of defrauding investors in a startup he launched, but the indictment released on Friday painted a much darker picture of a politician on the take, promising marijuana vendors he would give them non-opposition letters for their projects in return for money and other perks. He negotiated some of the deals himself, and worked through unnamed middlemen on others.

The mayor, who was ousted from office and then reinstated in the same recall election in March, also pocketed cash and a Rolex for helping the business of one of his middlemen and also made his chief of staff, Genoveva Andrade, kick back half of her $78,780 salary if she wanted to keep her job. Prosecutors claim Andrade, who is no longer working for the city, also participated in the shakedowns, charging her with extortion, theft, and bribery.

Three others are also facing charges for participating in the scheme, including Fall River municipal employee Hildegar Camara, Antonio Costa of Fall River, and David Hebert of Westport. Based on real estate records, Costa appears to be the man identified as Middleman #1 in the indictment. He helped the mayor secure funds from one marijuana vendor and also gave Correia a large amount of cash, a Rolex watch, and free space for his campaign office in exchange for city permits and trench work at a property he owned at 379 Kilburn Street.

To read the indictment, click here.

The indictment targets Correia, but it also raises a host of questions about the state’s emerging marijuana industry. Minority marijuana entrepreneurs have had trouble breaking into the business, in part because they lack the capital of their deep-pocketed competitors. The indictment of Correia shows another way money can open doors in the cannabis industry, and another way less well-heeled companies are at a disadvantage.

The Correia indictment also shows how the leverage the state’s marijuana law gives to municipalities in the cannabis licensing process can be exploited. Many believe applicants for licenses are already being exploited, with many communities forcing them to pony up more money in host community agreements than the law allows. Shaleen Title, one of the commissioners on the Cannabis Control Commission, has abstained on most final license votes because she believes the host community agreements exceed the 3 percent impact fee allowed by law.

Title could not be reached for comment, but James Borgehsani, the communications director of the marijuana legalization campaign in 2016 and currently a cannabis industry consultant, said he sees parallels between what Correia was allegedly doing and what is happening in municipalities across the state.

“I hope that this egregious example does not eclipse the similar financial shakedowns on the cannabis industry present in nearly every Host Community Agreement signed to date in Massachusetts. Lelling has set a good example for the CCC and state leaders to follow,” Borghesani said in a statement.

Lelling, who was joined by state Inspector General Glenn Cunha at a press conference, said the case highlights how concentrating so much power in one official’s hands elevates the possibility of criminal wrongdoing.  Cunha said Beacon Hill needs to address the issue.

Fall River Mayor Jasiel Correia II.

“While my office will resume its oversight role in this area, I hope today’s indictment will prompt the Cannabis Control Commission, the Legislature, and other stakeholders to evaluate what additional safeguards or reforms are necessary,” Cunha said.

The key to Correia’s alleged scheme was the fact that he personally controlled who could pursue the opening of a marijuana facility in Fall River and gain entry to a lucrative business. “Within months of becoming mayor in January 2016, Correia began monetizing his official position to fund his lavish lifestyle and mounting legal bills,” the indictment says.

Correia used his leverage skillfully, according to the indictment, coaxing at least four marijuana vendors to give him a total of about $600,000 by assuring them he would only support five or six projects. Instead, he has approved 14 and vetoed a measure passed by the City Council on August 12 that would have capped the number of marijuana licenses issued in Fall River.

Much of the Correia indictment is written in code, with marijuana vendors and the mayor’s middlemen referred to by numbers. But there was one example where names could be pieced together fairly quickly, although some of the dates in the indictment do not match up with other records.

One marijuana vendor, identified as MJ Vendor #3 in the indictment, received two non-opposition letters from Correia in exchange for $100,000 in the form of cash, campaign contributions, and the forgiveness of a $61,000 mortgage issued by the vendor to the brother of one of Correia’s middlemen.

The indictment says the wife of MJ Vendor #3 was fined $5,000 in May for illegally steering campaign contributions to Correia. The wife is not named in the indictment, but she appears to be Dina Pichette, who was fined $5,000 on April 2 for making a $1,000 maximum contribution to Correia and paying three relatives to make similar maximum contributions to him in violation of state law.

Pichette’s settlement agreement with the Office of Campaign and Political Finance said the Correia campaign had no knowledge of the illegal arrangement, but the indictment indicates it was all arranged by Correia and his middleman.

Pichette’s husband appears to be Matt Pichette, who is the owner of Loop Cultivation Partners LLC and 5 Point Management (formerly Premium Chef Edibles), both of which received non-opposition letters from Correia in August 2018 shortly before Pichette arranged her contributions to his campaign.

The indictment says friends and family of MJ Vendor #3 donated $12,500 to Correia’s campaign “on or about August 30, 2018.” It’s unclear if that date is correct because the Pichette donations were made on September 6, 2018. On August 30, several maximum $1,000 donations were made to Correia by officials affiliated with another marijuana vendor from Fall River named Hope Heal Health. That company received a non-opposition letter from Correia that same month and went on to obtain a provisional license from the Cannabis Control Commission but hasn’t opened yet.

The Boston Globe reported that MJ Vendor #2 was Giving Tree Health Center. The identification was based on the indictment saying MJ Vendor #2 received its non-opposition letter from Correia on July 2, 2018. According to the indictment, Giving Tree agreed to pay Correia $150,000, but ended up paying only $60,000 to $77,550 in cash and marijuana.

Northeast Alternatives is the only company approved by the Cannabis Control Commission to sell recreational pot in Fall River. That company, which had been operating as a medical marijuana dispensary previously, received its non-opposition letter from Correia on April 13, 2018; four days later, officials with J.H. Holdings Group Inc., whose principals are executives of the medical marijuana dispensary, gave $20,000 to Correia’s legal defense fund.

Lelling, who has made no secret of his belief that selling marijuana is a violation of federal law, declined to say whether the marijuana companies identified in the indictment had committed any crimes by paying bribes.

Information from State House News was used in this report.