A portion of assets seized from an illegal medical marijuana dispensary in Modesto was awarded to the Stanislaus County Drug Enforcement Agency on Tuesday.
The California Healthcare Collective, which was on McHenry Avenue, was raided by federal DEA agents and local law enforcement in September 2006 along with seven homes associated with the dispensary's two directors.
The raid culminated a 15-month investigation in which undercover officers purchased marijuana nine times from the dispensary with fraudulent doctor's recommendations.
Agents seized 10 firearms, more than $200,000 in cash, 100 pounds of processed marijuana, 1,000 marijuana plants and 34 pounds of baked goods laced with the drug.
Between the cash found the day of the raid, proceeds from the business and property that belonged to the owners, including a Mercedes-Benz, $322,313 in assets was seized.
Tuesday, U.S. Attorney Benjamin Wagner awarded the county drug enforcement agency $154,875 to be used for equipment, training and other things related to its operations.
"Forfeiting the proceeds of criminal activity, including the commercial sale of marijuana, is an effective way to disrupt and deter such activity," Wagner said during a news conference at the Modesto Police Department.
Anthony D. Williams, special agent in charge, said, "The DEA looks forward to continuing strong partnerships with our counterparts in Stanislaus County."
The Stanislaus County DEA is a task force with agents from the Sheriff's Department and police departments in Modesto, Turlock, Ceres, Oakdale, Waterford, Newman and Hughson.
Modesto Police Chief Mike Harden said the California Healthcare Collective was "nothing more than a criminal enterprise distributing large amounts of marijuana under the guise of medicinal use."
"The arrest, prosecution and asset forfeiture of proceeds from the (collective) should send a strong and unified message that law enforcement in Modesto and Stanislaus County will not allow such operations to continue," he said.
Slightly more than $250,000 was seized, but evidence presented at trial established that the dispensary, which had been in business for two years and operated as a nonprofit, generated $9 million in sales.
The California Healthcare Collective's two directors are serving lengthy sentences for a 2008 conviction for operating a continuing criminal enterprise.
Luke Scarmazzo and Ricardo Montes were sentenced to 21 years and 20 years in prison, respectively. The men appealed the convictions, but the U.S. Court of Appeals for the 9th Circuit in San Francisco upheld the decision in January 2011.
A month after the raid, the Modesto City Council voted to close a loophole in a law that allowed not-for-profit dispensaries.
While medical marijuana dispensaries and landlords of dispensaries throughout the state have been targeted in recent months, Wagner said the U.S. attorney's office is focusing efforts on large-scale outdoor marijuana operations on agricultural land in the Central Valley.
Bee staff writer Erin Tracy can be reached at firstname.lastname@example.org or (209) 578-2366.