Federal authorities say they have seized 14 Oregon properties turned into indoor plantations by a drug trafficking operation producing marijuana worth millions on the black market.
The seized properties are worth over $5.7 million and include homes outside Silverton, Dallas and Independence, according to a complaint documenting the forfeitures. The owner of a 15th home paid $400,000 to the federal government to avoid having to fork over the property.
The forfeiture comes over two years after federal agents arrested a Texas man who they described in court filings as the leader of the drug trafficking organization.
Fayao “Paul” Rong, 53, of Houston pleaded guilty in July 2023 to conspiracy to sell marijuana. Rong was sentenced to two and a half years in federal prison and five years of supervised release. Federal prison records show he was incarcerated as of Monday in Beaumont, Texas.
Federal court filings at the time of Rong’s arrest described how the drug operation used a southeast Portland café as a meeting place to trade information on everything from contractors to convert homes to sale of the marijuana.
“Rong purchased numerous residential houses in Oregon using several different identities and, with others in his organization, used them to grow and process marijuana and prepare it for transport to states where its use remains illegal,” according to a statement Monday from the U.S. Attorney’s Office in Portland.
The operation converted properties to grow houses in Clatsop, Columbia, Linn, Marion, Polk, and Yamhill counties. They trafficked over $13.2 million of black market marijuana in one year, starting in August 2020, federal prosecutors said their statement.
Law enforcement officials in September 2021 executed search warrants at 25 places in Oregon and Rong’s Houston home. Investigators seized nearly 33,000 marijuana plants, 1,800 pounds of packaged marijuana, 23 guns, nine vehicles, $20,000 in money orders and over $591,000 in cash, according to the statement.
Marijuana has been legal in Oregon for people 21 and older since 2015. But Oregonians can’t possess more than eight ounces of usable marijuana, and growing more than four plants requires a license.
The Rong case resulted from a 14-month investigation by Oregon State Police. The agency found excessive electricity use at the properties, which several times led to transformer explosions.
“Multiple citizen complaints corroborated law enforcement’s belief that Rong was leading a large black market marijuana operation,” according to the statement.
He described some elements of the operation after law enforcement searched his Houston home.
“Rong stated that he met with a loosely organized group of Chinese individuals at a restaurant in Portland,” according to a court declaration from Deputy U.S. Marshal James Stratton. “Rong described a type of informal cooperative where they periodically met and exchanged information on how best to establish and operate indoor marijuana grows in Oregon.”
Rong’s wife told investigators she was offered $1,000 to allow her name to be used on documents to buy Oregon properties, the declaration said.
Properties forfeited near Salem were located at 6525 Rickreall Rd. in Independence, 17344 Powers Creek Loop N.E. in Silverton and 2880 Kings Valley Highway in Dallas.
The U.S. Department of Justice deposits proceeds from forfeited assets into a federal fund “used to restore funds to crime victims and for a variety of other law enforcement purposes,” according to the U.S. Attorney’s Office. Homes forfeited by the federal agency are later sold.
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Contact reporter Ardeshir Tabrizian: [email protected] or 503-929-3053.
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Ardeshir Tabrizian has covered criminal justice and housing for Salem Reporter since September 2021. As an Oregon native, his award-winning watchdog journalism has traversed the state. He has done reporting for The Oregonian, Eugene Weekly and Malheur Enterprise.
