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
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.
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