Tuesday, November 18, 2008

Feds say that belief is irrelevant as trial gets under way Monday

By SUSAN HERENDEEN
sherendeen@modbee.com

last updated: April 27, 2008 03:38:30 AM

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 shuttered.

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