Pubdate: Sun, 27 Apr 2008
Source: Modesto Bee, The (CA)
Copyright: 2008 The Modesto Bee
Author: Susan Herendeen
Bookmark: (Marijuana - Medicinal)


Feds Say That Belief Is Irrelevant As Trial Gets Under Way Monday

Two Modesto men who ran a medical marijuana clinic on McHenry Avenue, 
raking in $6 million in less than two years, might have a difficult 
time mounting a defense against federal drug charges when they go to 
trial Monday.

Luke Scarmazzo and Ricardo Ruiz Montes claim they were abiding by the 
terms of Proposition 215 when they ran a cannabis dispensary that 
paid state and federal taxes, opened its books to the city and had a 
business license.

But they won't be able to talk about the political debate surrounding 
California's decision to legalize the medical use of marijuana in 
1996, because possession or use of the drug is illegal under federal law.

And a judge said prosecutors from the U.S. attorney's office might 
back their claim that the California Healthcare Collective was 
nothing more than a continuing criminal enterprise by showing the 
jury a rap-style music video Scarmazzo released a few months before his arrest.

In that video, Scarmazzo, who pulled in $13,000 a month as treasurer 
and secretary of the collective, flashes wads of cash and shakes his 
fist at a mock-up of the City Council, which voted to ban businesses 
such as his.

He and his partner now hope they can offer explanations to 12 jurors 
who will decide their fate at the close of a three-to four-week trial 
in U.S. District Court in Fresno.

"We think there's a good-faith argument here," said attorney Anthony 
Capozzi of Fresno, who represents Scarmazzo. "They, in good faith, 
thought they could be doing this. They didn't have any intent to 
violate the law."

Such cases were off-limits, even though state and federal law 
contradicted each other, until a 2005 ruling by the U.S. Supreme 
Court said medical marijuana laws in California and 12 other states 
do not shield people from federal prosecution.

Since then, 90 dispensaries across the state have been raided, with 
criminal charges filed in about half of those cases, according to 
Americans for Safe Access, an Oakland-based medical marijuana advocacy group.

Three cases against marijuana growers have gone to trial in 
California's federal courts, with prosecutors prevailing each time. 
Scarmazzo and Montes are the first dispensary owners to head to 
trial. They face mandatory sentences of 20 years to life in prison if 
convicted of the charges of engaging in a continuing criminal enterprise.

In legal papers, U.S. Attorney Kathleen Servatius argues that the 
defendants' belief that their conduct was lawful is irrelevant. She 
could not be reached for comment.

Judge Oliver W. Wanger, who issued a series of pretrial rulings last 
week, has yet to decide whether the defendants may argue that they 
believed their conduct was legal. A ruling on that crucial point of 
law is expected before jury selection begins.

Defense attorneys noted that the collective followed state law and 
verified doctors' notes before making any sales. They said the 
government will have a hard time explaining how the business amounted 
to a continuing criminal enterprise without explaining its operations.

"The facts are the facts. The truth is the truth," said attorney 
Robert Forkner of Modesto, who represents Montes. "The truth will 
come out at trial."

Montes and Scarmazzo, both 27, and seven others were arrested in 
September 2006, after a 15-month investigation by the Modesto police 
and the U.S. Drug Enforcement Administration.

Shop Raked in $6 Million

In legal papers, the authorities contend that the collective raked in 
$4.5 million from December 2004 to June 2006. Forkner said those 
numbers come from business records the collective shared with city 
officials, adding that the collective earned $6 million before it was 

Investigators found more than 1,100 marijuana plants, 13 guns, 60 
pounds of processed marijuana and $140,000 in cash in homes 
associated with the defendants, court records said.

The collective sold marijuana with names such as "purple skunk," 
"train wreck" and "God's gift" for prices that ranged from $40 to 
$300 for one-eighth of an ounce. An undercover officer purchased 
marijuana with a fraudulent doctor's recommendation nine times in 
November 2005.

The collective was a hot topic at City Council meetings in 2005 and 
2006, with officials passing two zoning ordinances aimed at banning 
such dispensaries. The federal raid came five days after city 
officials conceded that they could not outlaw the nonprofit collective.

Most likely, Scarmazzo and Montes will be the only defendants when 
the high-profile trial begins. The government dropped its case 
against one defendant, made deals with two others and likely will 
make deals with four more as the trial gets under way.

A prosecutor dropped charges against Stephen J. Demattos, 25, who 
worked at the collective, in September.

Two marijuana suppliers who were arrested during the raid took plea 
deals in October and January. Bradley J. Wickliffe, 29, and Brad 
Heinmiller, 33, were sentenced to 100 hours of community service and 
24 months or probation after they pleaded guilty to possession with 
the intent to distribute marijuana.

4 Expected to Take Deals

Capozzi said four other defendants are expected to take plea deals 
Monday. They are brothers Antonio Malagon, 30, and Jose Malagon, 34, 
who were managers at the collective; Lucky Jamal Boissiere, 27, who 
had 1,100 marijuana plants in his home; and Monica Valencia, 26, who 
made bank deposits for the collective.

Scarmazzo, who is free on $400,000 bail, and Montes, who is free on 
$250,000 bail, are expected to testify.

In a recent interview, Montes said he started the collective with 
nearly $50,000 he got from a settlement from an injury accident.

He said he had to travel to Livermore to purchase medical marijuana, 
which he used temporarily to ease the pain in a hand that had been 
crushed. He thought a dispensary would be a good business opportunity 
because there were none in the region, and consulted with lawyers who 
helped set up the venture.

Montes, who now works in construction, said he would have closed the 
shop if he had realized he could face federal drug trafficking 
charges. He said his partner's controversial video, with its wads of 
cash and thumping refrain, had nothing to do with the collective.

"That money wasn't even real," Montes said.

Scarmazzo said he will tell the jury that his video -- titled 
"Business Man" -- was the brainchild of a music producer who thought 
the confrontational style would be a hit with 20-somethings.

He was on probation when he joined Montes at the collective, because 
he was convicted of assault in May 2004, after spending 18 months in 
jail awaiting trial on a murder charge stemming from a fatal stabbing 
of a teenager after an egg-throwing incident on McHenry Avenue. Two 
others were convicted of manslaughter and sent to prison.

But he did not view his association with the controversial dispensary 
as a risky move. "This was something that was legal in our state," 
Scarmazzo said.
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