Feds raid SF pot clubs

SFPD helps DEA seize more than 9,000 marijuana plants and shutter three dispensaries

By Ann Harrison

As federal agents from the Drug Enforcement Administration and the Internal Revenue Service swarmed into the Herbal Relief Center medical cannabis dispensary on June 22, Phung Van Nguyen, who owns the business, watched quietly from the sidewalk.

Nguyen didn't know that afternoon that he was one of 20 people, mostly Asian men, indicted for allegedly participating in what federal prosecutors claim was a large-scale marijuana cultivation and distribution operation that used dispensaries as a front for non-medical marijuana sales and money laundering.

"I have nothing to do with any of that," said Nguyen at an emergency meeting of patients and caregivers held at another San Francisco dispensary later that day. "I take care of patients and now I can't get those people their medicine."

The two-year investigation, known as Operation Urban Harvest, searched 26 homes and business around the Bay Area. According to the US Attorney's Office, the raids located 10 indoor grow sites leading to the seizure of over 9,000 cannabis plants with an estimated value of over $5 million dollars.

Three medical cannabis dispensaries were raided in the sweep: Alternative Relief Co-Op at 1944 Ocean Avenue, the Sunset Medicinal Resource Center at 445 Judah Avenue, and the Herbal Relief Center at 1545 Ocean Avenue. Another dispensary location at 1939 Ocean Avenue was also searched.

Twenty people, including Nguyen, were indicted for conspiring to cultivate and distribute more than 1,000 marijuana plants. Three were also indicted for conspiracy to possess with intent to distribute ecstasy, based on one alleged sale of 1,000 ecstasy tablets. Fifty more doses were seized during the raids. Two defendants were charged with conspiracy to launder money because they employed checking accounts to make lease payments on property where cannabis was grown using the proceeds of marijuana sales.

The US Attorney's office said that prior to last week's raid, local law enforcement, including the SFPD and Oakland Police Department, assisted the investigation by serving 16 search warrants and seizing over 17,000 marijuana plants. According to an affidavit, 11 of the 20 people indicted by federal authorities last week were first arrested by the SFPD in six raids of growing operations in San Francisco and Oakland from November 2003 to December 2004.

District Attorney Kamala Harris, who pledged in a June 22 Bay Guardian opinion piece that she would not cooperate with federal prosecution of patients and caregivers, did not reply to a request for comment. "The district attorney must come out and affirm protection of medical marijuana patients in San Francisco; nothing short of that will be satisfactory to establishing some amount of confidence to medical marijuana patients that the city has their back," said Kris Hermes legal director of the Americans for Safe Access patients group.

Activists say they are outraged by the participation of the SFPD, despite the 2001 sanctuary resolution passed by the Board of Supervisors urging the police not to assist in the harassment, arrest, or prosecution of physicians, dispensaries, patients, or caregivers. The SFPD confirmed they were involved in the larger investigation, but insisted they were not raiding dispensaries.

"We are not involved in any enforcement action against any medical marijuana clubs," said SFPD spokesman Neville Gittens.

Despite this assertion, the Bay Guardian identified SFPD narcotics officer Sgt. Marty Halloran at the scene of the raid against the Alternative Relief Co-Op. Nguyen said he saw three uniformed SFPD officers raiding his club. "The San Francisco police are under no obligation to assist the DEA. what is going on here?" asked Hermes, after he watched Halloran string police tape in front of the Alternative Relief Co-Op.

"What's really frightening is how separate the city's left hand is from the city's right hand," said ASA director Steph Sherer, who added that the city attorney and Planning Department were also in the dark. "The Chief of Police did not know what was going on and was very surprised to find out that the San Francisco Police Department was there, as were the staff of most of the Board of Supervisors. What we need to shake down is who's controlling the San Francisco Police Department, who is controlling the narcotics unit."

Coincidentally, on the day after the raids City Attorney Dennis Herrera released his office's investigation of 13 cannabis dispensaries – most of which were found to be in compliance with the city's moratorium on new clubs. The Green Cross dispensary at 3412 22nd Street is appealing the suspension of its permits for unrelated causes. "The patients and caregivers of San Francisco deserve responsible dispensaries that respect our city ordinance – and by and large that's exactly what our investigation has found," said Herrera in a statement.

Hermes says the federal accusations against an allegedly organized group of Asian men is intended to undermine support for medical cannabis by playing on fears of Asian mafia involvement. "It's a clear divide and conquer strategy," said Hermes.

While the DEA suggested they were targeting "illegitimate" dispensaries, Hermes notes that the federal government considers all medical cannabis dispensaries to be drug traffickers and will block them from using medical cannabis as a defense in court.

Javier Pena, special agent in charge of the DEA in San Francisco, said federal authorities would continue to investigate dispensaries that he referred to as "large marijuana trafficking organizations." Pena said he was particularly intent on investigating manufacturers of cannabis-infused baked goods seized in the raid because they could be consumed by children. "We are cooperating in an investigation with the FDA to look into these products," said Pena.

Asked for proof that the raided dispensaries were violating state medical cannabis laws by distributing cannabis to non-patients, US Attorney Kevin Ryan cited a conversation between defendant Enrique Chan and an undercover agent during which Chan allegedly sold the agent 1,000 doses of ecstasy. According to the affidavit, Chan never mentions a dispensary by name. But federal authorities deduced from Chan's comments that he operated the Sunset Medical Resource Center and the Herbal Relief Center, grew cannabis in the back rooms, sold the cannabis for a higher price on the street, and planned to have patients testify on his behalf if he was arrested.

Nguyen was indicted after Chan told the undercover agents that Nguyen was an employee, not an owner. The SFPD also found three pounds of cannabis in Nguyen's car after he met with someone who looked like Chan. Federal authorities concluded that Chan operated the Herbal Relief Center through Nguyen "in an effort to shield himself from criminal liability."

"I am not a profiteer, I don't know what money laundering is," Nguyen told the Bay Guardian last week after the DEA had issued a warrant for his arrest. "I have nothing they can seize from me. I'm taking a loss to help these patients."

Unlike the other defendants, Nguyen is a well-known medical cannabis caregiver in San Francisco and the city's first Asian American dispensary owner. Patients say that Nguyen, known as Van, gave away three pounds of cannabis each week to those who could not afford the $40 average cost for an eighth of an ounce of cannabis in the city's dispensaries.

"Van took care of a lot of patients who were extremely ill and from what I've seen has a lot of compassion for the community," said Shona Gochenaur, a patient, harm reduction counselor, and San Francisco ASA volunteer. "I think it is a racial issue because they have only brought in Asian people."

Was Nguyen a cannabis Robin Hood who took from those who had plenty and gave to those in need? Did he allow others to operate through him as the government alleges, or was he used?

Nguyen says the cannabis seized by the SFPD was his weekly donation intended for patients and noted that the police later dropped all drug charges. After owning the business for five years, Nguyen said he turned the operation of the dispensary over to others because he needed a break from managing it.

"I'm the owner, but if other people are doing something wrong I don't know about that. I tried to keep them in line as much as I could, but I needed help," said Nguyen. "I met with local community and business groups, and the local police, and anyone I could to let them know I was legitimate and didn't have anything to hide."

"I know Van Nguyen. He is an honorable man doing his best to help patients," said Mike Aldrich, former director of CHAMP, one of the first cannabis clubs in the city. "He was a member of the San Francisco city [medical cannabis] task force and he tried to work for many years with city officials to operate legally under state and local laws."

Nguyen told the Bay Guardian he was looking for an attorney to represent him before he turned himself in to the DEA, but he's in debt and doesn't have the money to hire a lawyer. Friends say he spent last weekend trying to find an attorney, but the lawyers experienced in drug cases had already been hired by the other defendants.

Nguyen, 27, is facing a mandatory minimum sentence of 10 years in federal prison. He says he will fight the charges against him. "I would not have been standing in front of my store if I was doing all those things they said I did," said Ngyuen. "This is what I believe in, and I am not running away."

For more information or to read documents and transcripts associated with the raids, read Ann Harrison's blog at www.ontherecord.org.