Police arrested MediLeaf co-founder Goyoko “Batzi” Kuburovich for a multi-million dollar embezzlement “scandal” – however the charges are a separate can of worms from Kuburovich’s harried past concerning alleged illegal cannabis sales and money laundering.
“He was dirty a long time before MediLeaf,” said Kevin Keifer, a San Jose native who attended high school with Kuburovich in Campbell and later allegedly lost $50,000 to him in a Hawaiian real estate ponzi scheme. “People just feel ripped off by the guy.”
Kuburovich, a Gilroy resident and former co-director of medical marijuana dispensaries with locations in Gilroy, Morgan Hill and San Jose that were shut down after law enforcement officers raided MediLeaf offices and founders’ homes in December 2010 – was taken into custody March 23 on accusations of real estate grand fraud. He was arraigned Friday on four felonies.
Keifer said he is “blown away” by the actions of his former close friend, who he says coaxed South County residents to buy up property in Las Vegas, Hawaii and Arizona with promises of profitable returns. Most of that money, however, funded “lavish” parties at Kuburovich’s house, a $10,000 mortgage that Kuburovich “bragged about” to friends, an $80,000 car for his wife and a San Francisco condo purchased for his daughter with cash, according to Keifer.
“I’m so disappointed,” he said, still fired up with exasperation. “We did all kinds of things together. There was every opportunity to rip me off earlier. It’s like he was setting us all up for the big take.”
Jim Roberts, who is no longer Kuburovich’s criminal attorney but represented Kuburovich and MediLeaf last year, said most of the stories he’s heard surrounding the new charges are completely “inaccurate” and “out of context.”
“My understanding is that the two principal accusers both made substantial amounts of money out of the transactions they entered into with Kuburovich over a period of years,” he said Monday. “And when the economy turned, they didn’t make money. The types of transactions they’re claiming as fraud are the types of transactions they made money from.”
Requests for comment from Kuburovich went unanswered Friday and Monday.
Kuburovich is charged with four felonies after he allegedly conned a dozen South County and San Jose investors out of an estimated $1.3 million, according to Victor Chen, Santa Clara County Deputy District Attorney.
“Everywhere I’ve been tracking this guy, he just leaves a trail of completely cheating people out of their life savings,” said Chen.
As for new or pending developments regarding alleged money laundering and illegal pot sales associated with Kuburovich and his now defunct MediLeaf business, the case is still under review for possible charges according to Spokesman Sean Webby with the DA’s office.
One of Chen’s chief witnesses is a Morgan Hill resident and self-employed truck driver whose home was foreclosed on after he was “blindsided” by Kuburovich’s business dealings, according to Chen.
Dressed in a suit, Kuburovich made a brief appearance Friday morning for his arraignment at the Santa Clara County Superior Courthouse in Morgan Hill. He is charged with one felony count of grand theft of mroe than $250,000, and three counts of aggravated white collar crime for stealing money while he was an employee of an Arizona-based real estate company called AZ Homes, according to Chen.
Kuburovich employs a “blueprint” for cheating clients out of their money, Chen said. The swindle entices buyers to invest in Kuburovich’s real estate development ideas, which entails buying up empty lots and using the investment money to finance home construction projects, Chen explained. Investors are then presented with the option of reaping 25 percent of the profits once the house sells, or keeping a 15 percent slice of the interest at the time the property is sold.
Roberts said his understanding is that the principal investors, whom Roberts did not identify, “made money for years, and during the real estate meltdown, they didn’t make money. I don’t find anything unusual in that.”
Neither does Chen. But that’s not the case, he said.
“Normally, I wouldn’t file charges against someone who just loses someone else’s money,” said Chen. “The problem here is that the money people gave (Kuburovich), when he filed it, it never went into his business. It just went into his personal bank account.”
Since declaring bankruptcy in 2010 and foreclosing on his Morgan Hill home, Chen said Kuburovich has been dodging creditors by hiding his money.
“He would wrap it in plastic and put it in a box. Who needs a bank when you can bury it in a field somewhere?” said Keifer.
As evidence and documentation continue to unravel, Roberts says it’s “highly likely that the basis of these accusations will be unfounded, based upon what I’ve seen so far.”
Kuburovich’s next hearing is scheduled for 9 a.m. Friday at the South County Courthouse in Morgan Hill, where Chen anticipates a handful of Kuburovich’s alleged victims will be in the audience.
Keifer assures: “A lot of us will be there.”
