MediLeaf attorney: Investigation just an effort to collect seizure money
December 09, 2010
Lindsay Bryant, Gilroy DispatchThe raid of MediLeaf pot collectives in Morgan Hill, Gilroy and San Jose Thursday 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 by MediLeaf.
The attorney representing MediLeaf and its founder Goyoko "Batzi" Kuburovich, Jim Roberts, said none of the seven people implicated in Thursday's raid 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.
Danielle Ayers, the commander of C-Set - the drug task force that receives help from other agencies like the Gilroy Police Department and California Highway Patrol - has not returned phone calls from the Times. Roberts said there is no probable cause to arrest Kuburovich.
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 and carloads of items were taken for investigation.
Roberts has been representing MediLeaf for about a 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 District Attorney's Office has not filed a case against MediLeaf related to Thursday's operation and spokeswoman Amy Cornell said because no charges have been filed, there is no case for the DA's Office to review.
During the raid, law enforcement officers were searching for marijuana, scales, growing equipment, drug transactions ledgers, firearms, cell phones, computers, financial records, money and items associated with the illegal sale of marijuana. 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.
On Thursday, two MediLeaf collectives in San Jose were shut down by the raid and two people were arrested, though it's unclear if they were charged with any crimes.
According to KTVU, Kuburovich told pot club owners that he was going to turn himself in though he maintained his innocence in being involved in illegal activity related to the selling of pot to people without medical marijuana prescriptions.
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.
"Of course we're supporting them in a political way. We support the dispensaries operating in the San Jose area to continue to operate without law enforcement interfering," Hermes said.
Hermes said raids happen routinely across California, though they've decreased recently 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, saying it wasn't a good use of prosecutor's time.
"That has taken the wind out of their sails to disrupt the legal, local distribution of medicinal marijuana," Hermes said.
Police executed search warrants starting Thursday morning, including a search of the three-bedroom home of MediLeaf's co-director Neil Forrest at 2135 Darnis Circle in Morgan Hill about 2 p.m. Seven other residences and the MediLeaf offices in San Jose, Morgan Hill and Gilroy were searched Thursday for marijuana, scales, growing equipment, drug transactions ledgers, firearms, cell phones, computers, financial records, money and items associated with the illegal sale of marijuana. The search warrant was signed by Superior Court Judge Philip PennyPacker at 1:29 a.m. Dec. 1.
Along with searching Forrest's home, law enforcement issued search warrants at the home of Bruce Ziegelman, 53, on the 1500 block of 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.
GPD Investigator Geoff Guerin was present and said investigators had been at the residence since noon.
Several neighbors came out of their homes to see what was going on.
"I've never seen anything unusual. I've heard things, though. I've heard from the neighbors they could smell marijuana, that the people living there were smoking it late at night," said a woman named Mary who lives in the neighborhood.
The 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 Goyoko "Batzi" Kuburovich, 50, Patricia Kuburovich, 46, Kristel Kuburovich, 21, Neil Forrest, 58, Ziegelman and Kevin Keifer, 54. According to Gilroy Police Department Sgt. Chad Gallicinao, as of Thursday at 4 p.m. no one has been booked into county jail. 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, 58, 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 Thursday about 2 p.m.
"I can't talk to you. I wish you luck," said Kuburovich, who was detained by law enforcement as part of their investigation. He said he had not talked to Forrest Thursday.
According to a press release from the Gilroy Police Department, the investigation revealed probable cause to "believe the MediLeaf stores to include their owners and limited family members were involved in the illegal sales of marijuana and (illegally) laundered the proceeds through financial institutions."
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.
At least one business owner refuses to believe Forrest and Kuburovich were involved in any illegal activity with MediLeaf.
"They're really good people. I've talked with them many times and they're good people," said Hank Provost, the owner of Simply Romance, an adult store at 1329 1st St., a few doors down from the former MediLeaf store in Gilroy.
When Provost heard that Forrest and Kuburovich might be implicated in a crimes of money laundering and illegally selling marijuana, he said, "I seriously doubt that. Batzi is just a really good guy. From what I understand his father was ill and medical marijuana was helping him. He passed away and (Kuburovich) wanted to make it available to others," Provost said.
The foot traffic MediLeaf was bringing to the area was good for Provost and other business owners, too.
"We've all talked about here, and we consider MediLeaf a positive thing not a negative thing. Business has clearly dropped off since they're not open anymore," he said. "Since California legalized medicinal marijuana, I don't see the problem, it's a matter of an individual city ... letting things be."
The law enforcement agent who answered the front door at Forrest's home about 2 p.m. Thursday said he was working undercover and that the search was part of a larger investigation.
GPD say the involved parties attempted to hide illegal activities "under the umbrella of California's legitimate marijuana laws, which protect those who use marijuana for medicinal purposes."
At about 1:35 p.m. Thursday, three law enforcement cruisers were reported to be pulling away at MediLeaf's closed Gilroy location.
A public relations firm in Campbell, Three Girls Media and Marketing, sent an e-mail to South Valley Newspapers stating MediLeaf's two location in San Jose - at 2129 10th St. and 1340 Meridian Ave. - were also being raided by law enforcement.
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 on whether the medical dispensary can operate in the city 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 the 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.