Friday, February 1, 2008

Ex-medical marijuana clinic owner pleads in federal drug-distribution and

money laundering case


By Jason Kandel, Staff Writer

Article Last Updated: 02/01/2008 09:43:03 AM PST


The former owner and operator of Compassionate Caregivers medical marijuana

clinics has pleaded guilty to federal narcotics and money laundering

charges, admitting that he was responsible for the distribution of more than

15,000 pounds of marijuana.


Larry Roger Kristich, 65, who returned from Costa Rica last summer after

being indicted, pleaded guilty Thursday afternoon to one count of

maintaining drug-involved premises and one count of promotional money

laundering. Each count carries a maximum sentence of 20 years in federal

prison. Kristich also agreed to forfeit more than $1.2 million cash

generated by sales at his stores.


Kristich pleaded guilty before United States District Judge Manuel Real, who

scheduled a sentencing hearing for April 21.


From 2002 through 2005, Kristich owned and operated Compassionate

Caregivers, which had marijuana stores in Oakland, San Francisco, San

Leandro, West Hollywood (which operated under the name The Yellow House),

San Diego, Bakersfield and Ukiah. These stores sold marijuana, marijuana

plants, THC-laced edible products (including candy bars, cookies and soda

pop), and THC tinctures. Kristich was president of the company, which

employed more than 200 people as growers, clone cultivators, drivers,

directors, store managers, retail sellers (referred to as "budtenders") and

security guards.


Kristich admitted that sales of marijuana and THC products at Compassionate

Caregivers' stores totaled over $95 million. Kristich also admitted that he

laundered more than $50 million of such drug proceeds.


"These guilty pleas show that drug dealers who attempt to hide under the

umbrella of 'medical marijuana' cannot hide from federal law," said United

States Attorney Thomas P. O'Brien. "Kristich's operation was nothing more

than a lucrative drug-trafficking operation."


Debra D. King, Special Agent in Charge of IRS - Criminal Investigation in

Los Angeles, stated: "IRS - Criminal Investigation plays a unique role in

federal law enforcement's counter-drug effort. IRS - CI targets the profit

and financial gains of narcotics traffickers, following the money in illegal

narcotic operations, enabling increased criminal prosecutions and asset



Two other defendants in this case - James Carberry and James L. Ealy, 41, of

Tujunga - are scheduled to go on trial next week before Judge Real.


For more news and observations about crime in Los Angeles and the San

Fernando Valley, check out the Daily News' crime blog.


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