By DEAN E. MURPHY Published: June 24, 2005
SAN FRANCISCO, June 23 – Federal authorities said Thursday that they had cracked the biggest case ever involving the use of medical marijuana dispensaries in California as a cover for international drug dealing and money laundering, which they said extended to Canada and countries in Asia.
“This organization had been operating for over four years,” Javier F. Peña, the special agent in charge of the Drug Enforcement Administration in San Francisco, said at a news conference. “It is now dismantled.”
In court documents unsealed here, the federal authorities accused a 33-year-old San Francisco man, Vince Ming Wan, of leading a multi-million-dollar operation in the trafficking of marijuana and Ecstasy that used three medical marijuana clubs in the city as a front.
United States Attorney Kevin V. Ryan said that an arrest warrant had been issued for Mr. Wan on charges of conspiracy to distribute more than 1,000 marijuana plants, but that he remained at large. Twenty other people, all from San Francisco and its suburbs, were charged with a variety of crimes, including conspiracy to grow and traffic in marijuana plants, conspiracy to distribute Ecstasy and conspiracy to engage in money laundering.
Mr. Ryan said the two-year investigation was continuing and could result in more arrests and charges. In addition to Mr. Wan, seven other suspects remained at large on Thursday.
“We’re not talking about ill people who may be using marijuana,” Mr. Ryan said. “We’re talking about a criminal enterprise engaged in the widespread distribution of large amounts – millions of dollars, if you base it on historical evidence – of marijuana and other drugs, and money laundering their proceeds from these activities.”
Agents from the D.E.A., the Internal Revenue Service and other federal agencies executed search warrants on Wednesday at the three medical marijuana clubs. Twenty-three residences, businesses and other growing locations in San Francisco were also searched.
Agents hauled away more than 9,000 marijuana plants. In all, a drug agency official said, the investigation yielded 18,000 marijuana plants over the two years with a wholesale value of $17 million. The official, Special Agent Jose Martinez, said it was the largest drug investigation ever by federal authorities that involved medical marijuana dispensaries. In addition, the court documents said, some of the marijuana was grown in Canada.
Kenneth J. Hines, assistant special agent in charge of the I.R.S. in Oakland, said the authorities were still tracking financial transactions in Asia that Mr. Hines said had been funneled through 40 bank accounts at 12 financial institutions by two of the suspects, Phat Van Vuong, 30, and Richard Wong, 28, both of San Francisco.
Mr. Hines, who declined to name the country or countries that were involved, said the suspects had also bought automobiles, real estate and “other high-end items” with the money in an attempt “to disguise illegal proceeds derived from their activities.”
California has allowed the distribution of medical marijuana since voters approved a statewide ballot measure in 1996, but the state law is in conflict with federal narcotics laws. Mr. Ryan said the timing of the investigation, called Operation Urban Harvest, had nothing to do with a ruling by the United States Supreme Court two weeks ago that upheld the authority of federal officials over marijuana, even in the states where it is permitted for medical purposes.
An affidavit unsealed Thursday said that one of the suspects, Enrique Chan, 26, described in detail how the clubs were used as “a backbone” for illegal sales. The affidavit said Mr. Chan estimated that only half of the people who bought medical marijuana were really sick.
“You’ll get busted, but you remember, you got to beat the prosecution in court,” Mr. Chan told an undercover agent, according to the affidavit. “So if it comes down to a battle in court, what are you gonna do? You’re going to bring patients in court, like really sick patients with cancer, have them sit on the stand for you. And no jury is gonna try, is gonna convict you.”