Pubdate: Mon, 01 Jan 2007
Source: Los Angeles Times (CA)
Copyright: 2007 Los Angeles Times
Contact:  http://www.latimes.com/news/printedition/front/
Details: http://www.mapinc.org/media/248
Author: Rone Tempest, Times Staff Writer
Cited: Americans for Safe Access http://www.safeaccessnow.org
Bookmark: http://www.mapinc.org/mmj.htm (Marijuana - Medicinal)
Bookmark: http://www.mapinc.org/decrim.htm (Decrim/Legalization)
Bookmark: http://www.mapinc.org/topics/Americans+for+Safe+Access

DEA TARGETS LARGER MARIJUANA PROVIDERS

The Federal Agency Sees Big Profits for Medical Dispensaries As a 
Sign of Illegal High-Stakes Drug Dealing. Advocates Say the Raids Are Unfair.

HAYWARD, CALIF. -- Until federal drug agents arrested him last month, 
Shon Squier was one of Hayward's most successful and generous young 
businessmen.

Customers lined up outside his downtown storefront, particularly on 
Mondays, when he offered free samples to the first 50 visitors. 
Business was so good that Squier, a former construction worker, was 
able to donate more than $100,000 to local charities.

But Squier's success as a dynamic medical marijuana entrepreneur was 
also his downfall. Federal drug agents raided his home and business, 
arresting Squier and his store manager, freezing bank accounts 
containing $1.5 million and confiscating several expensive cars, 
motorcycles and $200,000 in cash.

Medical marijuana advocates claim the raid constitutes unfair, 
selective enforcement by the Drug Enforcement Administration of the 
estimated 170 medical marijuana dispensaries in the state, including 
85 in the San Francisco Bay Area.

Just down the street, another medical marijuana dispensary, not as 
big or as flashy as Squier's, was left untouched by the DEA agents in 
the Dec. 11 raid.

The federal drug agency, which does not recognize California laws 
legalizing the sale of marijuana to patients with doctor's 
prescriptions, contends the amount of money involved proves that the 
medical marijuana trade is nothing more than high-stakes drug 
dealing, complete with the same high-rolling lifestyles.

"These people will tell you they are just interested in the 
terminally ill," said Gordon Taylor, DEA special agent in charge of 
the California eastern federal district, "but what they are really 
interested in is lining their pockets with illegal drug money. When 
you pull the mask off, you see that they are nothing more than common 
dope dealers."

California's two medical marijuana laws, Proposition 215, approved by 
voters in 1996, and Senate Bill 420, passed in 2003, are not clear 
about how much money proprietors can take out of their businesses. 
One section of SB 420 states that medical marijuana caregivers should 
be allowed "reasonable compensation" for their services. Another 
section states that distribution should be done on a nonprofit basis.

"The legislation is about as clear as mud the way that they wrote 
it," said Joe Elford, lawyer for Americans for Safe Access, a 
pro-medical marijuana group. "The dispensaries are legal under state 
law because they are cooperatives and collectives. It is my best 
guess in terms of what the Legislature intended is that they 
shouldn't be operating to make a profit."

With the proliferation of medical marijuana dispensaries of all sizes 
across the state, the DEA and Internal Revenue Service have recently 
concentrated their investigations on young, high-profile operators 
like Squier, 34, and Luke Scarmazzo, 26, co-owner of a Modesto dispensary.

Scarmazzo got the attention of the DEA earlier in the year, when he 
produced a rap video that showed him counting stacks of hundred 
dollar bills, blowing billows of smoke at the camera and flipping off 
federal agents.

The Scarmazzo video, featuring the background sound of a pump shotgun 
racking a round, includes actors posing as members of the Modesto 
City Council. Online at http://www.krazmusic.com , it includes the refrain:

I'm in business, man.

I mean business, man.

Let me handle my business, damn.

Federal prosecutors showed it at Scarmazzo's bond hearing to 
demonstrate his criminal intent in order to deny him bail.

But Fresno lawyer Anthony P. Capozzi, who represents Scarmazzo, said 
the effort backfired.

"Let me tell you, the whole courtroom was swaying to the music," 
Capozzi said. Scarmazzo was released on a $400,000 bond and his 2007 
Mercedes-Benz, confiscated by federal agents, was returned to him.

Taylor, the DEA agent, said that between January and June of this 
year, Scarmazzo, who has a previous felony conviction, and his 
associates recorded $3.4 million in sales of marijuana products with 
brand names that included "911," "AK47" and "Train Wreck." Scarmazzo 
and his California Healthcare Collective co-owner, Ricardo Ruiz 
Montes, also 26, are charged in federal court with money laundering 
and "operating a continuing criminal enterprise." The last charge, 
one of the most severe under federal drug laws, carries a sentence of 
20 years to life in prison.

Here in Hayward, Squier and his business manager, Valerie Lynn 
Herschel, 23, are charged with the illegal manufacture and 
distribution of marijuana, a federal "controlled substance." Federal 
agents confiscated hundreds of plants, brownies, cookies and other 
products containing marijuana from Squier's business, Local Patients 
Cooperative.

"I only gave the people what they wanted -- easy, safe access to 
medical marijuana," said the slightly built Squier, cuddling his pet 
Chihuahua in his former office, which was stripped bare by federal agents.

He described his business as a responsible enterprise that paid 
federal and state payroll taxes for 60 employees, contributed to the 
Hayward High School football team and gave discounts to Hayward 
residents, veterans and customers in wheelchairs.

Squier said that he served about 75 customers a day and had 70,000 
individual patients in his books. The success of his business allowed 
him to buy a $1.5-million home in the Hayward Hills overlooking San 
Francisco Bay, a Hummer and a late-model Mercedes.

Half a block down Foothill Boulevard, Tom Lemos, 45, continues to 
operate his much lower-volume Hayward Patients Resource Center.

Whereas Squier and Scarmazzo flaunted their wealth, Lemos, who claims 
to have 3,000 to 4,000 regular customers, emphasizes his modest lifestyle.

"I live in a rental apartment and I drive an '86 Isuzu with 245,000 
miles on it," Lemos said.

Appearing before the Hayward City Council on Dec. 19 to ask for a 
renewal of his agreement to operate in the city, Lemos opened his 
remarks by stating: "I don't live in a large house."

Compared to his "small, homey" medical cannabis operation, Lemos 
said, Squier's high-volume Local Patients Cooperative down the street 
was a "Wal-Pot."

After hearing Lemos' presentation and testimony from several of his 
patients, the City Council agreed to extend his agreement for 90 
days, suggesting that he would be granted a longer-term permit if he 
moved from the downtown area to a more remote location, away from 
schools and the general public.

Even before the federal bust, the city had informed Squier that its 
agreement with him would be terminated.

Similarly, after Scarmazzo began operating in Modesto, the City 
Council passed an ordinance banning additional cannabis cooperatives, 
and the city had on several occasions attempted to halt Scarmazzo's operation.

The raids on both the Hayward and Modesto operations support what 
medical marijuana advocates contend is an unwritten practice by the 
DEA of being more likely to crack down on an operation that has lost 
local government support.

After the U.S. Supreme Court ruled last year that federal laws 
banning marijuana sales take precedence over those in California and 
other states permitting the sales, the DEA was empowered to arrest 
patients and operators at any one of the dispensaries that started up 
after passage of Proposition 215.

Instead of going after everyone, however, the federal agency appears 
to concentrate on the larger and higher-profile operations.

Medical marijuana advocates contend it is unfair of the DEA to cite 
examples like Squier and Scarmazzo to represent the typical 
dispensary operators.

"Most operators are not wealthy individuals," said Elford, the 
Americans for Safe Access lawyer. "As far as we can tell, the 
majority of dispensary operators are simply people who are interested 
in providing safe, affordable and reliable medicine to the people who 
need it and are not in it for the profit."

The "big fish" strategy enrages Oakland lawyer James Anthony, who 
represents Scarmazzo in civil matters.

"Why does the DEA suddenly concern themselves with how successful a 
medical cannabis collective is?" he asked. "Are they saying that if 
these guys had led monkish lives, then they would have left them 
alone? Are they judging Donald Trump on his lifestyle?" 
- ---
MAP posted-by: Richard Lake