The raid of MediLeaf pot collectives in Gilroy, Morgan Hill and
San Jose has left local medicinal marijuana supporters and
MediLeaf’s attorney questioning the motives of Santa Clara County
law enforcement in their effort to pursue alleged money laundering
and illegal sales of pot.
The raid of MediLeaf pot collectives in Gilroy, Morgan Hill and San Jose has left local medicinal marijuana supporters and MediLeaf’s attorney questioning the motives of Santa Clara County law enforcement in their effort to pursue alleged money laundering and illegal sales of pot.
Jim Roberts, attorney representing MediLeaf and its founder Goyoko “Batzi” Kuburovich, said none of the seven people implicated in Thursday’s search warrants have been charged with any crimes. In fact, Roberts said, Kuburovich wasn’t even questioned Thursday despite Roberts calling to arrange a meeting with the County Special Enforcement Team.
But C-Set’s Danielle Ayers – the commander of the drug task force that takes on countywide crimes – said charges against players in the alleged MediLeaf money laundering scam will be filed with the Santa Clara County District Attorney’s Office “within a week or two.”
“We want to make sure basically that people that are being lied to … aren’t being arrested,” Ayers said about MediLeaf employees.
She said the employees were hired under false pretenses and were victims of alleged money laundering and illegal sales of cannabis by MediLeaf .
The drug task force operates a South County unit that was contacted by the Gilroy Police Department and Morgan Hill Police Department . They handed over “a huge box and stacks” of complaints of wrongdoing and fraud at the now-shuttered marijuana dispensary in Gilroy.
“We’re not picking on any one group. People are taking advantage of those who really need the medicine.
During the investigation, Ayers said undercover officials from the enforcement team had purchased marijuana with medicinal pot membership cards and without.
“You could walk into a dispensary and see 15-, 16-year-olds buying pot, going out to their car, smoking it and driving away,” Ayers said.
She said if pot clubs are operating legally and not illegally as a for-profit organization – all clubs must comply with nonprofit standards – the team lets them be.
Medicinal marijuana was legalized in 1996 after California voters passed Proposition 215. Buying and selling is still illegal under federal law, which creates a conflict between California and the U.S. government.
The eight-month investigation broke Thursday when more than 50 law enforcement officers raided MediLeaf stores in Gilroy, San Jose and Morgan Hill. The homes of several people linked to MediLeaf were searched, with carloads of items being hauled out.
The district attorney’s office will review a case against MediLeaf once it’s been filed and make a charging decision, said spokeswoman Amy Cornell.
Roberts has been representing MediLeaf for about year since its directors were involved in litigation with the City of Gilroy after their shop at 1321 First St. was forced to close Aug. 9 when Superior Court Judge Kevin McKenney upheld the city’s claim that MediLeaf was operating illegally because it did not have a business license.
During Thursday’s searches, law enforcement officers were searching for marijuana, scales, growing equipment, drug transactions ledgers, firearms, cell phones, computers, financial records, cash and items associated with the illegal sale of marijuana and related money laundering.
In California 70 percent of seized assets during criminal seizures are returned to the county law enforcement agency, according to seizure laws and the process of “assets forfeiture” as regulated by the U.S. government.
“It’s a tainted process … they’re (the county) attempting to make a profit to the extent it contaminates the process,” Roberts said. “It’s a sad statement that one small organization is seeking to make a profit on seizures and it’s contributing to the black market in turn. No other counties are doing this, it’s an aberrational group in California,” he said.
Ayers said pot collectives are marking up medicinal marijuana by 80 to 90 percent in some cases and taking advantage of patients who don’t want to risk buying marijuana from a street dealer in order to afford it.
She added if pot clubs are “dispensing the medicine fairly, we want them to be able to do that. But these people are making a gross amount of profit. They’re greedy. People are protesting ‘shut down meth labs.’ We are. We’re trying to do everything right,” Ayers said.
On Thursday, two MediLeaf collectives in San Jose were shut down by the raid and two people were arrested.
Kris Hermes, a spokesman for the grass-roots organization Americans for Safe Access based out of Oakland, said his organization is not formally representing MediLeaf but is behind its efforts.
Hermes said raids happen routinely across California, though they’ve decreased since the Obama administration issued a memorandum in October that it will not seek to arrest medical marijuana users and suppliers “as long as they conform to state laws.” The Justice Department “deprioritized” federal enforcement in 2009, saying it wasn’t a good use of prosecutor’s time.
Search warrants issued Thursday
Issuing eight search warrants Thursday required more than 50 law enforcement officers from Gilroy, Morgan Hill and Santa Clara County to gather evidence in the investigation of MediLeaf.
Kuburovich’s 7170 Eagle Ridge Court residence in Gilroy was searched Thursday along with co-director Neil Forrest’s home and vehicle at 2135 Darnis Circle in Morgan Hill.
Law enforcement also issued search warrants at the home of Bruce Ziegelman on the 1500 block of Majorca Drive in Morgan Hill, and three MediLeaf stores – the Gilroy location and two in San Jose on Meridian Avenue and South 10th Street.
The temporary South County headquarters for MediLeaf was searched in Morgan Hill at 16430 Monterey Road’s UR Health & Wellness Center.
The MediLeaf search warrant was obtained Thursday by The Dispatch, and names the six people that law enforcement refused to release: Kuburovich, 50, Patricia Kuburovich, 46, Kristel Kuburovich, 21, Forrest, 58, Ziegelman, 53, and Kevin Keifer, 54.
The money laundering investigation is directed at friends and family who were selling marijuana to customers who had no medical ailments and laundered payment for their personal benefit and is active and ongoing, according to GPD Sgt. Chad Gallicinao.
MediLeaf opened Nov. 9 2009 in Gilroy without a business license and was forced to close Aug. 9 after Superior Court Judge Kevin McKenney issued an eight-page July 20 order upholding the city’s claim that MediLeaf was operating illegally following a Gilroy lawsuit. Forrest and Kuburovich claim 4,000 members and MediLeaf offers 20 varieties of marijuana.
Attorneys for MediLeaf filed a notice to appeal the prohibitory injunction the day after McKenney’s Santa Clara County court decision and requested the dispensary be allowed to operate during the appeals process. McKenney denied MediLeaf’s request.
MediLeaf then continued its fight with Gilroy by filing a Nov. 10 appeal. MediLeaf attorneys filed an opening brief to begin the appeals process – on a prohibitory injunction resulting from a lawsuit brought against it by Gilroy – with the Santa Clara County district court of appeals.
As of September 2010, Berliner Cohen billed the city a total of $175,529 for MediLeaf litigation, said Gilroy Finance Director Christina Turner.
var docstoc_docid=”65871867″;var docstoc_title=”Illegal Sales of Marijuana / Criminal Conspiracy / Money Laundering”;var docstoc_urltitle=”Illegal Sales of Marijuana / Criminal Conspiracy / Money Laundering”;Illegal Sales of Marijuana / Criminal Conspiracy / Money Laundering –
var docstoc_docid=”66050580″;var docstoc_title=”Drug warrants served”;var docstoc_urltitle=”Drug warrants served”;Drug warrants served
