The raid of MediLeaf pot collectives in Morgan Hill, Gilroy 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 marijuana.
The raid of MediLeaf pot collectives in Morgan Hill, Gilroy 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 marijuana.
The attorney representing MediLeaf and its founder Goyoko “Batzi” Kuburovich, Jim Roberts, 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 Danielle Ayers, the commander of C-Set – 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 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 employees of MediLeaf who she said were hired under false pretenses and were victims of alleged money laundering by MediLeaf and illegal sales of cannabis.
The drug task force operates a South County unit that was contacted by the Morgan Hill Police Department and Gilroy Police Department. They handed over “a huge box and stacks” of complaints of wrongdoing and fraud at the now-shuttered marijuana dispensary in Gilroy and San Jose shops.
“We’re not picking on any one group. People are taking advantage of those who really need the medicine, they’re not operating appropriately, the marijuana is not being held to any standards … It’s really a bigger issue,” Ayers said.
During the investigation, undercover officials from the enforcement team purchased marijuana both 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 operating as for-profits, which is illegal, (all clubs must comply with nonprofit standards) the team lets them be. Though, she said, law enforcement could arrest everyone working at cannabis collectives, “because they’re selling narcotics.” Medicinal marijuana was legalized in 1996 after California voters passed Proposition 215, however buying and selling is still illegal under federal law, creating 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 San Jose, Morgan Hill and Gilroy, and the homes of several people linked to MediLeaf were searched. Carloads of items were hauled out.
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.
The DA’s Office will review a case against MediLeaf once it’s been filed and make a charging decision, said spokeswoman Amy Cornell.
During the searches in San Jose, Morgan Hill and Gilroy, 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. According to seizure laws and the process of “assets forfeiture” as regulated by the U.S. government, in California 70 percent of seized assets during criminal seizures are returned to the county law enforcement agency.
“It’s a tainted process … they’re 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 says 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 that 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.
Kris Hermes, a spokesman for the grass-roots organization Americans for Safe Access based out of Oakland, said ASA is not formally representing MediLeaf but is behind their 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 Morgan Hill, Gilroy and Santa Clara County to gather evidence for the investigation of MediLeaf, a pot collective directed by a Morgan Hill resident and Gilroy resident.
Co-director Neil Forrest’s home at 2135 Darnis Circle in Morgan Hill and his vehicle were searched. Along with searching Forrest’s home, law enforcement issued search warrants at the home of Bruce Ziegelman at 1500 Majorca Drive in Morgan Hill, 7170 Eagle Ridge Court in Gilroy, and three MediLeaf stores: two in San Jose on Meridian Avenue and South 10th Street, and the now-defunct Gilroy store a 1321 First St. The temporary South County headquarters for MediLeaf was searched since it moved to Morgan Hill into UR Health and Wellness Center, at 16430 Monterey Road.
Thursday afternoon five camouflaged police, including undercover officers, swarmed outside of 7170 Eagle Ridge Court in Gilroy. A man dressed in civilian clothing and another dressed in camouflage brought about 10 white cardboard boxes outside through the front of the house around 3:40 p.m., shortly followed by another carrying two shotguns out of the home.
The MediLeaf search warrant was obtained by the Times Thursday. Law enforcement has refused to release the names of the six people who were being sought: MediLeaf co-director Batzi Kuburovich, 50, Patricia Kuburovich, 46, Kristel Kuburovich, 21, Forrest, 58, Ziegelman, 53, and Kevin Keifer, 54. Gilroy Police Department Sgt. Chad Gallicinao said the investigation is active and ongoing.
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.
At Darnis Circle, two MHPD police cars and a California Highway Patrol vehicle were parked outside Forrest’s home that he shares with two other housemates. One housemate, who declined to give his name, said Forrest has lived there for more than 15 years and that he never saw or smelled marijuana in the house. Outside Forrest’s home sat his gray Datsun pick-up truck with dozens of MediLeaf business cards strewn on the passenger seat and white campaign buttons that read “I (heart) MediLeaf.”
When asked if marijuana was growing anywhere in the house, his housemate said, “Let me be clear about this, hell no,” he said.
Forrest is co-director of the pot club MediLeaf with Batzi Kuburovich, who answered a call by the Times to his cell phone about 2 p.m. Thursday. “I can’t talk to you. I wish you luck,” he said.
MediLeaf opened Nov. 9 2009 in Gilroy without a business license at 1321 First St. It 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.
