The owner and two officials of what officials call a “scofflaw” San Jose marijuana dispensary were indicted by a criminal grand jury this month on felony charges including illegal sales of marijuana, tax fraud, insurance fraud, worker’s compensation fraud, and money laundering.
The company, San Jose Organics, failed to pay over $2 million in taxes to the state and city. This, despite the fact that investigators found a paper trail showing the dispensary made approximately $10 million dollars in profit between April 2013 and July 2015. Also recovered from the San Francisco home of the owner Ben Kit Lew was $800,000 in cash. Another $400,000 was uncovered from other locations associated to the investigation.
Lew, 44, faces up to 46 years in prison on 46 felonies and one misdemeanor, if found guilty. Brian Wong, the 43-year-old manager, faces up to 23 years on 15 felonies and one misdemeanor. Ernest Ma, 28, the Secretary of the Corporation, faces a maximum of about 10 years on six felonies.
The dispensary was raided in July and the defendants were arrested. Evidence showed that the dispensary was bringing in $25,000 a day in sales.
San Jose Organics was featured in a May 2015 NBC Bay Area expose that called the club “one of the busiest medical marijuana collectives” in in the city and reported that it claims to have between 5,500 and 6,000 members. The report said city officials accused San Jose Organics of “breaking the law every day it’s open for business” and had already served it with “multiple citations,” and alleged the dispensary sold weed to buyers under age 21 in violation of city law. The TV report said the owners declined an interview through a consultant.
“People like these defendants are profiteers exploiting the medical marijuana laws,” prosecutor Edward Liang said. “They do this, while at the same time ignoring laws that every other business in California is required to follow. We would not accept this conduct in any other industry. We will continue to hold medical marijuana dispensaries to the same standards.”