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US: Federal agents raid marijuana clubs

J.K Dineen

San Fransisco Examiner

Thursday 23 Jun 2005

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Federal agents raided three medical marijuana clubs and more than 20 other
homes and businesses Wednesday in what law enforcement authorities are
calling a sprawling investigation into an alleged criminal organization
involved in money laundering and other illegal activities.

While the details of the investigation will not be officially released
until indictments are unsealed today, the probe is focused on three medical
pot clubs: the Sunset Medical Resource Center at 454 Judah St.; the Herbal
Relief Center at 1545 Ocean Ave.; and the Alternative Relief Co-Op at 1939
Ocean Ave.

Law enforcement authorities say the group, which has ties to Singapore and
Vancouver, was allegedly laundering millions of medical-marijuana dollars
through a number of specialized gardening centers catering to pot growers,
including one on Filbert Street in North Beach and one on Ocean Ave. Money
from the pot clubs, which are illegal under federal law, was allegedly
funneled through the gardening stores, which police say were essentially
fronts.

"This is not a medical marijuana thing," said a high-ranking law
enforcement official who has been working on the case for months. "This is
an organized, criminal conspiracy to launder money, to make a ton of profit
utilizing sick people and the medical marijuana laws of the state of
California."

The raids, which netted at least 15 arrests, came just two weeks after the
U.S. Supreme Court, in a blow to medical marijuana advocates, ruled that
the federal government had the authority to prosecute medical marijuana
users, although medical use remains legal under state law. California
voters approved Proposition 215 in 1996, which allowed the use of marijuana
under a doctor's prescription for medicinal purposes.

The City has more than 40 marijuana dispensaries and the Board of
Supervisors recently passed a moratorium on new clubs opening until
regulations can be established.

Former District Attorney Terence Hallinan, who is representing the owners
of the Sunset Medical Resource Center and the Herbal Relief Center, called
the raids "a reaction to the Supreme Court decision."

"I'm just surprised they didn't wait longer," said Hallinan. "These are
legitimate medical marijuana clubs that have been operating for years
serving thousands of sick people in San Francisco."

Capt. Tim Hettrich, head of The City's narcotics division, said his
investigators were involved in gathering evidence at some of the private
residences and businesses, but did not partake in the raids on the cannabis
clubs and did not serve any warrants.

Police would not name those arrested Wednesday until federal indictments
are unsealed today. Hallinan said one of his clients, an owner of the
Sunset club, had been arrested at his home.

Van Nguyen, 27, the proprietor of the Herbal Relief Center and a City
College business student, was not arrested. He stood outside the center and
watched through the window as federal agents packed up files and bagged
marijuana.

He said he did not know about the raids until an employee showed up for
work at 11 a.m.

"He called me up and said, 'I don't think we should open up today.' I said,
'What's the problem?' He said, 'We are already open - the DEA is here.'"

Nguyen said he has run the business for more than five years and never made
a profit.

"If I was an international drug lord I wouldn't be standing here," he said.
"I'd be overseas."

Medical marijuana pioneer Wayne Justman, who worked on getting Prop. 215
passed, said he would not judge the merits of the raids until he had seen
the evidence the federal government has against the suspects.

"I hear talk of money laundering and gang activity, I don't hear Prop. 215
being challenged," he said.

If marijuana clubs are laundering money, he said he has no problem with
their prosecution.

"If we have a rotten fish in the barrel, let's get that out, too," he said.

E-mail: jdineen@examiner.com


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