An individual applied for a license to grow medicinal cannabis in Maine using a New York driver’s license that identified him as Phil Chen. He underwent a criminal background check as Phil Chen. Phil Chen even took out a mortgage on a house in Glenburn. On multiple occasions, from July 11, 2023, to July 25, 2025, he represented himself to the Office of Cannabis Policy (OCP) as Phil Chen.
But he was not Phil Chen — he was Xiao Leung, an impostor masquerading under the identity of a man who may or may not have co-conspired in Leung’s illicit marijuana production and trafficking.
The case of Phil Chen, now known to be Xiao Y. Leung, 47, of Quincy, Mass., adds yet another chapter to Maine’s seeming inability to cope with proliferating Chinese organized crime taking advantage of the state’s cannabis laws, lax law enforcement, and a governor who remains inexplicably incapable of even acknowledging the organized crime crisis.
Leung’s case also exposes one of the complex financial schemes Chinese drug cartels have used to amass a real estate empire in Maine—in this case, a now-defunct hard-money lending firm called Money Tree Capital Markets, LLC.
Capping off the mystery is a series of 2024 liens filed against the property owned by Phil Chen, the real Phil H. Chen, 54, of Brooklyn, N.Y., in the names of Chen, Tristine Thuong, Michael Luong, and Quanhuan Cheng, all for unpaid sales tax on an item or items shipped to the Glenburn address worth more than $109,000. And even more damning for OCP: Despite taking enforcement action against Leung for pretending to be Chen, the cannabis regulator nonetheless subsequently licensed the real Phil Chen to stage a marijuana grow at the Glenburn property.
The bizarre story is yet another example of how out-of-state criminal organizations profit and prosper at the expense of Maine residents, typically facing minor slaps on the wrist even when caught flagrantly violating Maine’s laws. Meanwhile, law-abiding cannabis business owners are increasingly facing insurmountable financial pressures, de-banking, overly frequent surprise inspections, and an OCP enforcement team that appears strangely comfortable watching foreign drug cartels seize the industry.
The Real Phil Chen
The Phil Chen a.k.a. Xiao Leung scheme began to crumble in Nov. 2023 when he (Leung) was arrested in Sidney for trafficking more than 20 pounds of cannabis. He was indicted on April 18, 2024 with felony charges. However, the full scope of the charade was later revealed in a December 31, 2024, OCP enforcement notice, quietly posted online without fanfare. Although OCP has been reluctant to inspect Chinese cannabis growers with the same vigor that they apply to white growers who publicly criticize the agency, police involvement forced their hand.
“Through investigation the department determined that Phil Chen is simply an alias being utilized by Xiao Leung … to fraudulently obtain registry identification cards from OCP without disclosing his actual identity,” the letter states.
In addition to three false statements of identity, the OCP discipline letter paints a picture of someone hardly concerned with following the rules of the legal program, such as plant-count limits. OCP says Leung used the false name and a New York driver’s license to apply for a caregiver registration card on July 11, 2023, and again for a registry identification card on Jan. 11, 2024. He renewed his caregiver registration on July 25, 2024, but inspectors later found he continued cultivating cannabis after his caregiver card expired on July 20, 2024 — with 576 plants under 512 square feet of canopy and no legal credentials to do so.
The agency determined Leung acted under the “Phil Chen” alias from at least July 11, 2023, through July 25, 2024. He also signed a settlement agreement using the fake name.
As punishment, OCP ordered a wrist-slap for Leung, a $1,800 fine — “$600 for each of these three major violations” — and revoked his registry identification card for one year . The notice directs him to return his card immediately.
The OCP letter doesn’t indicate whether Leung was cultivating marijuana illegally at the residence prior to registering with the medicinal program in July 2023, but the house in Chen’s name was purchased much earlier in 2021.
Chen did not respond to phone calls placed to a cell phone listed in his name.
Regardless, the Glenburn home purchased in Chen’s name is almost certainly the site of a cannabis grow now. That’s because OCP, despite the shenanigans involving Leung/Chen, has issued a medicinal caregiver registration to Chen for a cannabis cultivation site in Glenburn.
The license Leung obtained in Chen’s name appears to be one of the instances that OCP Director John Hudak referred to in his Jan. 2025 testimony concerning the takeover of Maine’s cannabis industry by what the U.S. Department of Homeland Security referred to as Asian Transnational Criminal Organizations.
In his testimony, Hudak admitted that OCP was licensing individuals while knowing or suspecting that they were affiliated with international criminal organizations and that they believed these licenses were being sought to gain protection from law enforcement activities.
“Our enforcement partners have seen clear patterns that align with activity tied to transnational criminal organizations,” Hudak said. “These groups are exploiting Maine’s medical and recreational cannabis systems for illicit gain, and we are working tirelessly to close those gaps.”
“I do believe that, in some of these cases, individuals who are getting arrested in connection with these search warrants, or addresses that are connected to these search warrants — they are not applying to our medical program to come out of the shadows and into the light,” said Hudak.
“They’re applying so they can have a ‘Get Out of Jail Free’ card, or what they perceive as a ‘Get Out of Jail Free’ card to continue to do the operations that they’re doing. Which, by and large, is directing product out of state as well,” he said.
During the hearing, Hudak said the agency had developed an internal process for tracking when they’d issued a license to a suspected member of a criminal cartel. However, OCP has declined to turn over any records related to that process in response to multiple Freedom of Access Act (FOAA) requests, claiming that such records do not exist.
But the story gets even stranger when you peel back the financial and real estate records that helped Chen acquire the property in central Maine.
The company that financed the acquisition of the Glenburn home under the name of Phil Chen no longer exists. It’s still owned under the name Phil Chen, and Chen joined his associates — Tristine Thuong, Michael Luong, and Quanhuan Cheng — last year in paying off the sales/use tax liens filed against the property.
However, the company that supplied the capital for the home — Money Tree Capital Markets, LLC — imploded shortly after it was formed amid a legal fight among its funders over unpaid interest on hard money loans extended for properties, including at least a dozen cannabis houses in Maine.
A closer look at the network of properties tied to Money Tree Capital Markets, LLC sheds even more light on the interconnected webs of Flushing, NY-based cannabis operations that proliferated throughout Maine after 2020.
Money Tree Properties in Maine
According to real estate records, Money Tree Capital Markets, LLC (MTCM) was the finance company for more than a dozen mortgages in Maine, almost all of which went to Chinese individuals from New York or Massachusetts, and bear the tell-tale signs of the residential black-market pot grows common throughout Maine.
There’s no indication that MTCM was directly aware of the underlying activity the properties would be involved in, but MTCM’s backing undoubtedly helped the Chinese cannabis cartels outbid and outgun average Maine families who may have been looking at the rural, median-priced homes.
MTCM’s lending for the Maine buying spree began March 1, 2021 and lasted until Aug. 2021, with purchases Greenbush, Madison, Athens, New Sharon, Manchester, Bangor, Solon, and Dexter.
In addition to the common cannabis activities, there are other indications that MTCM’s customers were associates in the endeavor. For example, three of the properties were purchased by different individuals who all supplied the same address — 41 Mass. Ave in Quincy, Mass.
Many of the properties would later enter foreclosure proceedings, such as Yanyi Wu’s property at 215 Wentworth Road in Embden. Others would face scrutiny from law enforcement over illicit cannabis cultivation.
For example, 560 Horsetail Hill Road in Madison — purchased by Cheng Ming Yu and Hua Kai Yu of 6141 186th St STE 688, Fresh Meadows, New York, in June 2021 — was raided by the Sheriff of Somerset County on April 30, 2024. The search warrant resulted in the confiscation of thousands of pounds of illicit cannabis.
At another Money Tree property — purchased by Maio Dan Chen of 8720 23rd Ave. Apt 1, Brooklyn, New York, in July 2021, and located at 447 South Maine Street in Solon — the illicit cannabis operation was referenced by a civil action filed in July 2024 by the mortgage owner seeking to place the property into receivership.
447 South Main Street in Solon
Wilmington Savings Fund Society, FSB, which seems to have purchased many of the illicit marijuana grows originally financed by MTCM, alleged that Maio Dan Chen had stopped making mortgage payments. The company originally sought relief via a civil suit in July of 2024. However, that complaint must have failed, as a nearly identical suit was filed in April 2025.
In the end, the result is that neither Maio Dan Chen nor MTCM ultimately paid a price for a risky loan or the profitable illicit activities that occurred at the property because the loan was sold to a legitimate financial institution — the oldest bank in Delaware — before the drug trafficking scheme collapsed.
Chen left the bank hanging with a nearly $200k debt as the individual or organization controlling the property continued to reap illicit cannabis profits from the residence, according to the latest court records. The unpaid mortgage payments and interest amounted to more than $75,000, with the total debt rising to $178,101.33, according to the civil suit.
“The record further demonstrates that Defendant, despite her default on the promissory note secured by the Solon property, has let the property to others for the purpose of cultivating marijuana,” the suit alleges.
“A Maine real estate broker visited the property on May 9, 2025. Upon approaching the premises, she was greeted through a speaker system,” the suit claims. “The voice provided a phone number at which to reach Defendant. Upon calling Defendant, the broker learned that Defendant does not reside at the premises. The property has security cameras mounted to all four exterior walls, dehumidifying systems venting the basement, and multiple new heat pump units. The electrical service also appears to be recently upgraded.”
“Defendant presumably is realizing rents from the grow operations occurring at the premises yet has failed to pay her mortgage, calling into question whether she is, in fact, in control of the property,” the suit states. “Defendant also has permitted the conversion of the premises for nonresidential purposes that are likely illegal.”
Maine’s Chief U.S. District Judge Lance E. Walker granted the order in July.
Chen (if she is in fact a real person) will lose control of the black-market marijuana grow that could have earned her or her organization anywhere from $750,000 to $5M per month over a period of three years, but Wilmington Savings Fund Society, FSB, is unlikely to be made whole.
The Delaware bank will take possession of a property that, according to Zillow, is worth $360,600.
The reality will almost certainly be far less rosy.
Illicit cannabis operations across the state have drastically devalued properties as the result of black mold, pesticide contamination, environmental contamination, haphazard electrical and propane modifications, and general poor treatment.
It’s unclear what Chen’s relationship is to the other Solon marijuana grow controlled by Chinese individuals from New York that was raided on June 6, 2024, just up the road at 21 North Main St.
However, property records show that the owner of that property at the time it was raided, Shelly W. Leung, 26, of Brooklyn, acquired the house in June 2021 from Hua Kai Yu and Shu Fen Lin — who provided the same New York address as the Hua Kai Yu (referenced earlier in this story) who also used MTCM financing to purchase a marijuana grow in Madison.
Indeed, Leung, Yu, and Lin all listed the same East 14th Street address in Brooklyn, NY on the warranty deed.
Both of those properties were on the list of residences in Maine flagged by the U.S. Department of Homeland Security over ties to Asian Transnational Criminal Organizations, according to a copy of that list obtained by the Maine Wire. (In addition, the DHS list includes nearby properties at 11 Hilltop Lane and 809 South Main Street — both in Solon. 809 South Main St. was originally purchased in cash by “809 S Tongfu LLC,” an Arizona-based LLC controlled by Xiao Feng Zhu, before being transferred to Liming Zhu, according to corporate and property records.)
In Penobscot County, Money Tree provided funding Ethan Zeng’s property in Greenbush, Jiaming Gong’s property in Bangor, Shuying Li’s place in Dexter, and a property controlled by 113 Apple Inc. in Stetson. Careful readers might recognize 113 Apple Inc as the holding company tied to several central Maine properties raided in January 2024.
The labyrinthine entanglements connecting the illicit marijuana grows that Money Tree Capital Markets, LLC wound up supplying the capital for suggest that, at a minimum, someone was deliberately using the company as a tool to acquire property in Maine with minimal verification of the new owners’ identities and intentions.
The case also shows how regular Mainers looking to buy middle class housing in rural Maine would have been blown out of the water with bids from sophisticated organizations leveraging financial tools to gain a massive advantage over the market.
Money Tree Capital Markets, LLC, Implodes
When Money Tree Capital Funding, LLC (MTMF) agreed to bankroll the operations of Money Tree Capital Markets, LLC (MTCM), the partnership was pitched as a straightforward mortgage-lending venture based on a verbal contract.
The arrangement was supposed to blend capital with expertise: the investors behind MCMF would provide millions in cash, while the MTCM would originate loans under the direction of principal Kamal Malik, a U.K. national, and Fungzhou Wu, a Chinese national.
Under the agreement, MTCM would originate mortgages and pre-sell them to large institutions, leveraging a credit line extended by MTCF worth anywhere from $5 million to $30 million. MTCM would earn money on fees and up-charges, while MTCF would earn monthly interest payments of 14 percent on the credit line regardless of whether Malik and Wu made loans.
But by late 2022, an arrangement that financed more than 500 mortgages worth more than $300 million devolved into a bitter court battle in the Southern District of New York, with each side accusing the other of fraud, betrayal, and theft.
According to complaint filed by MTCF, Malik, Wu, and the MTCM partners stopped paying interest on the credit line with more than 20 mortgages extended but unsold. This ran contrary to Malik’s representations, MTCF said, that he would always have mortgages pre-sold to large institutions, like the bank in Delaware.
By November 2022, the dispute spilled into federal court. MTCF accused Malik, Wu, and their partners of breach of contract, unjust enrichment, and fraudulent inducement. They demanded the return of their investment and interest, and sought emergency orders to restrain Malik’s use of company funds. The court denied those early requests, but the lawsuit pressed forward.
Malik and his companies responded with an aggressive counteroffensive. They accused the MTCF investors not of being victims, but of being the real wrongdoers. According to their filings, it was the investors—Keith Stein, Oliver Cojot, and Ira Saferstein, but especially Saferstein—who diverted company money, forced MTCM to buy loans it didn’t want, and siphoned off funds for themselves. Malik’s side filed counterclaims for breach of contract, fraud, and tortious interference, and launched third-party claims against Stein, Cojot, and Titan Capital, a related investment firm. They alleged that Saferstein, while managing MTCM, had breached his fiduciary duty by misusing a $30 million investment pool.
For months, the case expanded as each side layered accusations upon accusations. The docket became a thicket of competing claims, motions to dismiss, and discovery fights. By September 2024, Judge Edgardo Ramos cut much of the overgrowth. In a pivotal ruling, he dismissed most of the defendants’ counterclaims and third-party claims—including allegations of fraud and misappropriation—leaving only one claim standing: that Saferstein, as manager of MTCM, may have breached his fiduciary duty.
Eventually, the entire dispute between MTCF and MTCM was resolved in January, with the details of the settlement remaining private. Whether there’s any truth to either side’s allegations remains unclear, but the public legal filings provide a window into how an obscure high-finance network profited from and aided the proliferation of Chinese cannabis cartels in Maine.
Read More
- Triad Weed: One NYC Bank Financed More Than 50 Illicit Chinese Marijuana Grow Houses in Rural Maine
- The Restaurateur: Bangor Business Owner Linked to Illicit Marijuana Grows
- How the U.S. Treasury Department Helps Chinese Organized Crime Transform American Homes Into Drug Dens
- Illicit Chinese Toxins Discovered at Somerset County Triad Cannabis Operation
