MEDILEAF ATTORNEY: INVESTIGATION JUST AN EFFORT TO COLLECT SEIZURE MONEY

The raid of MediLeaf pot collectives in Morgan Hill, Gilroy and San
Jose Thursday has left local medicinal marijuana supporters and
MediLeaf's attorney questioning the motives of Santa Clara County law
enforcement in their effort to pursue alleged money laundering and
illegal sales of marijuana by MediLeaf.

The attorney representing MediLeaf and its founder Goyoko "Batzi"
Kuburovich, Jim Roberts, said none of the seven people implicated in
Thursday's raid have been charged with any crimes. In fact, Roberts
said, Kuburovich wasn't even questioned Thursday despite Roberts
calling to arrange a meeting with the County Special Enforcement Team.

Danielle Ayers, the commander of C-Set - the drug task force that
receives help from other agencies like the Gilroy Police Department
and California Highway Patrol - has not returned phone calls from the
Times. Roberts said there is no probable cause to arrest Kuburovich.

The eight-month investigation broke Thursday when more than 50 law
enforcement officers raided MediLeaf stores in San Jose, Morgan Hill
and Gilroy, and the homes of several people linked to MediLeaf were
searched and carloads of items were taken for investigation.

Roberts has been representing MediLeaf for about a year since its
directors were involved in litigation with the city of Gilroy after
their shop at 1321 First St. was forced to close Aug. 9 when Superior
Court Judge Kevin McKenney upheld the city's claim that MediLeaf was
operating illegally because it did not have a business license.

The District Attorney's Office has not filed a case against MediLeaf
related to Thursday's operation and spokeswoman Amy Cornell said
because no charges have been filed, there is no case for the DA's
Office to review.

During the raid, law enforcement officers were searching for
marijuana, scales, growing equipment, drug transactions ledgers,
firearms, cell phones, computers, financial records, money and items
associated with the illegal sale of marijuana. According to seizure
laws and the process of "assets forfeiture" as regulated by the U.S.
government, in California 70 percent of seized assets during criminal
seizures are returned to the county law enforcement agency.

"It's a tainted process ... they're attempting to make a profit to
the extent it contaminates the process," Roberts said. "It's a sad
statement that one small organization is seeking to make a profit on
seizures and it's contributing to the black market in turn. No other
counties are doing this, it's an aberrational group in California," he said.

On Thursday, two MediLeaf collectives in San Jose were shut down by
the raid and two people were arrested, though it's unclear if they
were charged with any crimes.

According to KTVU, Kuburovich told pot club owners that he was going
to turn himself in though he maintained his innocence in being
involved in illegal activity related to the selling of pot to people
without medical marijuana prescriptions.

Kris Hermes, a spokesman for the grass-roots organization Americans
for Safe Access based out of Oakland, said ASA is not formally
representing MediLeaf but is behind their efforts.

"Of course we're supporting them in a political way. We support the
dispensaries operating in the San Jose area to continue to operate
without law enforcement interfering," Hermes said.

Hermes said raids happen routinely across California, though they've
decreased recently since the Obama administration issued a memorandum
in October that it will not seek to arrest medical marijuana users
and suppliers "as long as they conform to state laws"; the Justice
Department "deprioritized" federal enforcement, saying it wasn't a
good use of prosecutor's time.

"That has taken the wind out of their sails to disrupt the legal,
local distribution of medicinal marijuana," Hermes said.

Police executed search warrants starting Thursday morning, including
a search of the three-bedroom home of MediLeaf's co-director Neil
Forrest at 2135 Darnis Circle in Morgan Hill about 2 p.m. Seven other
residences and the MediLeaf offices in San Jose, Morgan Hill and
Gilroy were searched Thursday for marijuana, scales, growing
equipment, drug transactions ledgers, firearms, cell phones,
computers, financial records, money and items associated with the
illegal sale of marijuana. The search warrant was signed by Superior
Court Judge Philip PennyPacker at 1:29 a.m. Dec. 1.

Along with searching Forrest's home, law enforcement issued search
warrants at the home of Bruce Ziegelman, 53, on the 1500 block of
Majorca Drive in Morgan Hill, 7170 Eagle Ridge Court in Gilroy, and
three MediLeaf stores: two in San Jose on Meridian Avenue and South
10th Street, and the now-defunct Gilroy store a 1321 First St.

The temporary South County headquarters for MediLeaf was searched
since it moved to Morgan Hill into UR Health and Wellness Center, at
16430 Monterey Road.

Thursday afternoon five camouflaged police, including undercover
officers, swarmed outside of 7170 Eagle Ridge Court in Gilroy. A man
dressed in civilian clothing and another dressed in camouflage
brought about 10 white cardboard boxes outside through the front of
the house around 3:40 p.m., shortly followed by another carrying two
shotguns out of the home.

GPD Investigator Geoff Guerin was present and said investigators had
been at the residence since noon.

Several neighbors came out of their homes to see what was going on.

"I've never seen anything unusual. I've heard things, though. I've
heard from the neighbors they could smell marijuana, that the people
living there were smoking it late at night," said a woman named Mary
who lives in the neighborhood.

The search warrant was obtained by the Times Thursday. Law
enforcement has refused to release the names of the six people who
were being sought: Medileaf co-director Goyoko "Batzi" Kuburovich,
50, Patricia Kuburovich, 46, Kristel Kuburovich, 21, Neil Forrest,
58, Ziegelman and Kevin Keifer, 54. According to Gilroy Police
Department Sgt. Chad Gallicinao, as of Thursday at 4 p.m. no one has
been booked into county jail. Gallicinao said the investigation is
active and ongoing.

The money laundering investigation is directed at friends and family
who were selling marijuana to customers who had no medical ailments
and laundered payment for their personal benefit.

At Darnis Circle, two MHPD police cars and a California Highway
Patrol vehicle were parked outside Forrest's home that he shares with
two other housemates. One housemate, who declined to give his name,
said Forrest, 58, has lived there for more than 15 years and that he
never saw or smelled marijuana in the house. Outside Forrest's home
sat his gray Datsun pick-up truck with dozens of MediLeaf business
cards strewn on the passenger seat and white campaign buttons that
read "I (heart) MediLeaf."

When asked if marijuana was growing anywhere in the house, his
housemate said, "Let me be clear about this, hell no," he said.

Forrest is co-director of the pot club MediLeaf with Batzi
Kuburovich, who answered a call by the Times to his cell phone
Thursday about 2 p.m.

"I can't talk to you. I wish you luck," said Kuburovich, who was
detained by law enforcement as part of their investigation. He said
he had not talked to Forrest Thursday.

According to a press release from the Gilroy Police Department, the
investigation revealed probable cause to "believe the MediLeaf stores
to include their owners and limited family members were involved in
the illegal sales of marijuana and (illegally) laundered the proceeds
through financial institutions."

MediLeaf opened Nov. 9 2009 in Gilroy without a business license at
1321 First St. It was forced to close Aug. 9 after Superior Court
Judge Kevin McKenney issued an eight-page July 20 order upholding the
city's claim that MediLeaf was operating illegally following a Gilroy
lawsuit. Forrest and Kuburovich claim 4,000 members and MediLeaf
offers 20 varieties of marijuana.

At least one business owner refuses to believe Forrest and Kuburovich
were involved in any illegal activity with MediLeaf.

"They're really good people. I've talked with them many times and
they're good people," said Hank Provost, the owner of Simply Romance,
an adult store at 1329 1st St., a few doors down from the former
MediLeaf store in Gilroy.

When Provost heard that Forrest and Kuburovich might be implicated in
a crimes of money laundering and illegally selling marijuana, he
said, "I seriously doubt that. Batzi is just a really good guy. From
what I understand his father was ill and medical marijuana was
helping him. He passed away and (Kuburovich) wanted to make it
available to others," Provost said.

The foot traffic MediLeaf was bringing to the area was good for
Provost and other business owners, too.

"We've all talked about here, and we consider MediLeaf a positive
thing not a negative thing. Business has clearly dropped off since
they're not open anymore," he said. "Since California legalized
medicinal marijuana, I don't see the problem, it's a matter of an
individual city ... letting things be."

The law enforcement agent who answered the front door at Forrest's
home about 2 p.m. Thursday said he was working undercover and that
the search was part of a larger investigation.

GPD say the involved parties attempted to hide illegal activities
"under the umbrella of California's legitimate marijuana laws, which
protect those who use marijuana for medicinal purposes."

At about 1:35 p.m. Thursday, three law enforcement cruisers were
reported to be pulling away at MediLeaf's closed Gilroy location.

A public relations firm in Campbell, Three Girls Media and Marketing,
sent an e-mail to South Valley Newspapers stating MediLeaf's two
location in San Jose - at 2129 10th St. and 1340 Meridian Ave. - were
also being raided by law enforcement.

Attorneys for MediLeaf filed a notice to appeal the prohibitory
injunction the day after McKenney's Santa Clara County court decision
and requested the dispensary be allowed to operate during the appeals
process. McKenney denied MediLeaf's request.

MediLeaf then continued its fight with Gilroy on whether the medical
dispensary can operate in the city by filing a Nov. 10 appeal.

MediLeaf attorneys filed an opening brief to begin the appeals
process - on a prohibitory injunction resulting from a lawsuit
brought against it by the Gilroy - with the Santa Clara County
district court of appeals.

As of September 2010, Berliner Cohen billed the city a total of
$175,529 for MediLeaf litigation, said Gilroy Finance Director
Christina Turner.

Anyone who has information regarding these illegal activities can
contact officer Geoff Guerin at 408-846-0350. Parties wishing to
remain anonymous may call WeTip at 1-800-782-7463.