Details emerge day after marijuana grow arrests at building owned by Denham, others

Pictured is the building at 680 D St. in Turlock where an indoor grow of nearly 4,000 marijuana plants and other drugs were found.
Pictured is the building at 680 D St. in Turlock where an indoor grow of nearly 4,000 marijuana plants and other drugs were found. pguerra@modbee.com

Turlock police conducted a raid Wednesday and reported uncovering an illegal marijuana grow of nearly 4,000 plants and other drugs in an industrial building whose owners include former U.S. Rep. Jeff. Denham.

Denham is a member of the limited liability company that owns the D Street building where police executed the search warrant, according to paperwork filed with the California Secretary of State.

Turlock attorney Michael Warda, speaking on Denham’s behalf, confirmed the former congressman’s ownership stake in the building. “Denham is a member of the LLC that owns the building that was raided,” Warda said in a Wednesday phone interview.

Wednesday’s police raid came the same day Denham appeared in a panel discussion in Santa Barbara County regarding the potential of wine and cannabis tourism, according to local media accounts there.

The Santa Barbara Independent reported that Denham “suggested that all signs point to cannabis being federally legal in the next few years, a move he now supports.”

While marijuana remains illegal at the federal level, California voters approved recreational use in 2016. But businesses that grow and sell cannabis and engage in other aspects of the industry need approval from the state and their local government to operate legally.

The Turlock City Council approved a pilot program just a few months ago to allow cannabis businesses.

Turlock police reported in Wednesday’s news release that they arrested five people.

The building police searched is next to Denham Plastics, and Warda said the two buildings are about 75 feet apart and share a common gate and easement to use the gate. But he said Denham Plastics workers had no indication of any alleged illegal activity. Warda added that the raided building is huge, roughly 50,000 square feet, making concealment easy.

Turlock police did not release the location of the raid, only that it took place in an industrial building in the 600 block of D Street. But The Bee confirmed the raid took place at 680 D St. The limited liability company is called 680 D Street.

Warda said the 680 D Street LLC was in the process of selling the building to a company that had applied to the city for a permit to grow marijuana. The sale was contingent upon the city approving the permit.

“The contract is terminated,” Warda said Wednesday after speaking with Denham. “They are losing their deposit. (Denham) was surprised they undertook this action when they had a substantial investment in the building and were virtually guaranteed a permit to operate legally.”

Warda did not respond to requests for comment Thursday.

Sacramento-based Kings Happy Farm entered into a lease agreement with the option to purchase with the 680 D Street limited liability company in August 2017, with the expectation that the lease would become effective in November 2017. The city of Turlock provided The Bee with a copy of the lease and the proposal Kings Happy Farm submitted to the city for its cannabis growing business.

It’s not clear how long the company had been occupying the D Street building. Kings Happy Farm CEO Tommy Tran did not return phone calls seeking comment, and the attorney listed as the project’s legal counsel — Sacramento-based Michael Abrate — did not respond to a request for comment.

Denham did not respond to several requests seeking comment Wednesday and Thursday.

Denham served in the House of Representatives as a Republican for eight years before losing in a close race to Democrat Josh Harder in November to represent Stanislaus County and southern San Joaquin County. Denham then joined the global law firm K&L Gates as a government affairs counselor in Washington, D.C.

The statement of information filed Aug. 1 with the California Secretary of State for the 680 D Street limited liability company lists Denham Plastics’ main office in Salinas as where to send legal documents for the 680 D Street LLC.

The statement of information lists Michael Hutchings as the limited liability company’s chief executive officer and Denham as an additional manager or member of the company. Denham reported on his financial disclosure report for 2017 while in Congress that he had a 50 percent interest in the 680 D Street LLC. That was his most recent disclosure.

Denham Plastics provides containers for shipping and harvesting produce. Its website states that Denham partnered with Hutchings in 2000 to form the company. Hutchings did not respond to requests for comment Thursday.

The Turlock Police Department news release states that detectives also found more than “100 pounds of processed marijuana, several ounces of butane hash oil, three firearms, a small amount of heroin, cocaine (and) methamphetamine” during the raid.

Police arrested Gino Nardozzo, 54, of Turlock and Sang Nguyen, 34, Chris Pham, 43, Andy Tran, 36, and Xiaofeng Wang, 30, all of Sacramento, according to the news release. A Chris Pham is listed as the Kings Happy Farm manager on the paperwork the company submitted to Turlock. He did not respond to a phone message and email seeking comment Thursday.

They were booked at the Stanislaus County Jail on suspicion of manufacturing a controlled substance, cultivation of marijuana and marijuana sales. They remained in custody as of late Thursday afternoon, according to the jail’s website.

The Ceres police SWAT team and the Stanislaus County Sheriff’s Department assisted Turlock police, which also used its SWAT team, in carrying out the search warrant. Turlock detectives obtained the warrant for the building based on evidence that it housed an illegal marijuana grow.

Police Chief Nino Amirfar said in the release that while Turlock is developing a pilot program to allow cannabis businesses, the city will not tolerate illegal activity.

“This particular marijuana grow was a very sophisticated operation,” Amirfar said. “It is clear that it had substantial financial backing. Our investigation will continue and all who are affiliated with this illegal operation may face prosecution.”

Amirfar said in a Thursday interview that there was about $500,000 worth of growing equipment at the building that was not yet in use. He would not say how or when police became aware of the marijuana grow or how long it had been in operation.

He also would not say whether Denham was interviewed as part of the investigation.

City Attorney Doug White said Turlock was in the very early stages of processing Kings Happy Farm’s application and had not yet conducted background checks. White said someone from the city eventually would have toured the building as part of processing the application.

“I don’t know how you hide 4,000 plants,” he said.

Bee reporters Erin Tracy and Rosalio Ahumada and research and information specialist Maria Luisa Figueroa contributed to this story.

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Kevin Valine covers local government, homelessness and general assignment for The Modesto Bee. He is a graduate of San Jose State University and grew up in San Jose.