U.S. ATTORNEY PRAISES VERDICT IN MODESTO MARIJUANA STORE CASE

Two Men Described As Merely 'Drug Dealers'

U.S. Attorney McGregor Scott on Friday called two Modesto medical
marijuana providers the "poster children" for problems with
California's Compassionate Use law.

He praised a Fresno jury for convicting Ricardo Montes and Luke
Scarmazzo on Thursday on federal drug trafficking charges, one of
which carries a minimum sentence of 20 years.

"These were drug dealers selling marijuana. This case is that
simple," Scott said.

The attorney took aim at Montes' and Scarmazzo's defense during their
trial, in which their lawyers argued that their business was
"aboveboard" and in compliance with state law.

Scott argued that Montes' and Scarmazzo's California Healthcare
Collective flouted state law, too, because it turned a $9 million
profit from 2004 to 2006. State law requires that medical marijuana
dispensaries operate as nonprofit establishments.

"It is absolutely farcical for guys like this ... to say that they
were operating in full compliance of state law," Scott said.

Robert Forkner, Montes' attorney, disputed Scott's characterization
of the business. Forkner said he plans to appeal the verdict and ask
for a new trial.

"California Healthcare Collective was incorporated in the state of
California," Forkner said. "They were issued a business license in
the city of Modesto. They paid the IRS over $1 million in taxes. Not
one time did the state of California or the city of Modesto tell them
they were in violation of state law."

Government and law enforcement leaders from Stanislaus County flanked
Scott during a news conference at the Modesto Police Department. They
thanked federal agents for conducting an undercover operation to
gather evidence against the collective and trumpeted the verdict.

"We will support the efforts of law enforcement to make sure
organizations like this are not about to victimize our community,"
said Modesto Mayor Jim Ridenour, who voted to ban medical marijuana
clinics from doing business in the city two years ago.

County District Attorney Birgit Fladager said her office could have
prosecuted the case in state court, but agreed that the federal route
was preferable because it offered stiffer sentences and it opened the
door for the Department of Justice to conduct the investigation.

Montes and Scarmazzo, both 27, drew the attention of local
authorities when they opened their dispensary on McHenry Avenue in
2004, obtaining a business license as a health store. Police closely
watched the business, documenting various run-ins with officers and
complaints from neighbors.

Modesto Police Chief Roy Wasden called the Drug Enforcement
Administration for help in investigating the business, officers said Friday.