Authorities allege medical marijuana stores profited from sales

http://www.sacbee.com/114/story/278748.html

Authorities allege medical marijuana stores profited from sales

- The Associated Press
Published 1:34 am PDT Wednesday, July 18, 2007

Federal authorities have indicted the operators of
nearly a dozen medical marijuana dispensaries in
California alleging they illegally distributed pot for
significant profit.

The owners of "Compassionate Caregivers," a chain of
seven medicinal marijuana stores across the state,
reaped $95 million during a three year period,
according to court documents released Tuesday by the
U.S. attorney's office.

The profits, prosecutors said, were used to buy
expensive cars and real estate in Costa Rica.

"The marijuana traffickers ... claimed to sell the
drug for medicinal value, but it's clear that
marijuana's financial value was their true
motivation," said Timothy Landrum, special agent in
charge of the U.S. Drug Enforcement Administration's
Los Angeles office.

Prosecutors also alleged that a medical pot store in
Morro Bay sold more than $2.1 million worth of pot
during a one-year period and that 281 minors were
among its customers. They also claimed a doctor who
conspired with the shop wrote recommendations
approving the teenagers' use of marijuana and was paid
a "finder's fee" for each form.

Meanwhile, the owner of a dispensary in Corona was
accused of selling more than $1.2 million worth of
marijuana in a nine-month period.

Five of the men were arrested Tuesday and were in
federal custody pending court hearings, said Assistant
U.S. Attorney Shannon Ryan. The whereabouts of
"Compassionate Caregivers" operators, Larry R.
Kristich and James Carberry, were unknown, she said.

The men faced charges including conspiracy,
distribution of marijuana, maintaining a drug
establishment, aiding and abetting and money
laundering.

An indicted co-conspirator was charged with helping
one of the men launder the money to start a company
that rents equipment to movie production companies,
the documents said.

"Compassionate Caregivers" stores were located in
Oakland, San Francisco, San Leandro, Ukiah,
Bakersfield, San Diego and West Hollywood.

A measure approved by California voters in 1996
legalized medical marijuana, but the law conflicts
with federal rules prohibiting the distribution of
marijuana for any purpose.

Attempts to reach those indicted were unsuccessful.

This article is protected by copyright and should not
be printed or distributed for anything except personal
use.
The Sacramento Bee, 2100 Q St., P.O. Box 15779,
Sacramento, CA 95852
Phone: (916) 321-1000

Copyright © The Sacramento Bee