Authorities allege medical marijuana stores profited from sales

July 17, 2007

, Associated Press

LOS ANGELES—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.

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