‘Operation Candy Crush’: TBI reports not ‘properly written,’ DA said
Operation Candy Crush, headed by the Rutherford County Sheriff’s Office earlier this month, indicted the owners of 23 local stores accused of selling illegal hemp products.
Additionally, 19 store owners were hit with felony charges related to the sale of Schedule VI drugs.
Clash with TBI
“TBI is no longer willing to testify that this is a Schedule VI substance. We have no choice but to dismiss,” District Attorney Jennings Jones said in an interview Wednesday.
Jones announced Wednesday morning that he had filed the motion to dismiss the case.
Marijuana is illegal nationwide.
Industrial hemp, which must be properly licensed, is legal in Tennessee.
Thousands of dollars worth of items and cash were seized in the sting. Products labelled to contain the hemp-derivative CBD were sent to the Tennessee Bureau of Investigation for testing.
The stores were padlocked for days before Judge Royce Taylor, who signed the initial warrants, dissolved the temporary injunction and allowed them to reopen last week.
“We were notified Friday that the DA is dropping the charges,” one store owner, Stacey Hamilton, said Monday. “I’m elated and angry, very angry. From the moment I found out what they were doing, I knew I had committed no crime.”
The TBI determined that the products contained CBD, but were unable to determine the source of the material, and therefore whether or not it was legally-derived.
The DA released a statement Wednesday about the case that alleges the TBI backed off from initial statements based on lab reports, undermining the entire case.
Reports dating back to May 2017 indicate that TBI labs tested “candy products” containing cannabidiol, known as CBD. They are labeled in those reports as Schedule VI controlled substances
“That conclusion by the TBI meant that the substance the TBI lab detected on the candy products was prohibited under Title 39 of the Tennessee Criminal Code, which only exempts cannabidiol when used for medical and research purposes as provided for by the state,” the release from the DA’s shop showed.
Based on those conclusions, Jones’ report stated, the details were presented to the Rutherford County Grand Jury and Judge Royce Taylor in the circuit criminal court. They were presented as part of the petition to close the stores for being public nuisances.
Basis of all charges
However, those reports from the TBI are no longer supported.
“Chemists from the TBI have now informed my office that they cannot determine whether the cannabidiol detected on these products came from a hemp plant or marijuana plant,” the release said.
The TBI was unable to determine whether the CBD found was from legal or illegal substances. They were also unable to detect the amount of the psychoactive element THC in the items.
Those reports, now termed inconclusive, were the “foundations of all indictments and nuisance actions” in the case, Jones said.
All criminal charges will be dismissed and wiped from the records of storeowners, Jones said. All property seized is expected to be returned shortly.
Damage is done
“This has caused an enormous cost to all the store owners,” Hamilton said. “I don’t think they’ll apologize in nearly as public a way as they condemned us as drug dealers.”
Cops Raid Medical Marijuana Business, Seize Over $100,000, Including Teenage Girls’ College Savings
As the morning dawned on January 28, 2016, 30 DEA agents and San Diego police officers stormed Med-West Distribution, a legal medical marijuana business that specialized in refining cannabis oil for vaporizer pen cartridges. Kitted out in tactical vests and helmets, heavily armed officers smashed open the doors with sledgehammers. Once inside, officers pointed guns at the two employees on site, handcuffed them, and scoured the premises for valuable inventory and equipment. Discovering a safe, law enforcement cracked it open and found roughly $325,000 in cash stored inside. The owner of Med-West, James Slatic, even said police high-fived each other when the raid ended.
(You can see footage from the raid in the video below.)
Following the raid, San Diego police executed seizure warrants for the business’s cash and two more targeting James’s family, seizing more than $100,000 from their personal savings and checking accounts. Those funds are completely unrelated to Med-West. James lost $55,000; his wife, who works as a V.A. hospital technician, lost $34,000. Even their two teenage daughters did not go unscathed: Police seized their entire college savings, a combined $11,260.
“I’ve done nothing wrong,” James said. “We operated the business legally and in compliance with all California and local laws.”
Neither James, his wife nor their two daughters have been charged with any crime. Nor have any of Med-West’s employees been indicted in connection to the raid (the employees who were arrested were ultimately released without any charges). Yet San Diego law enforcement has refused to return the cash it seized. Today, more than nine months after the raid, prosecutors still haven’t even brought a civil forfeiture case against the Slatics’ personal bank accounts.
Unable to access its own accounts, Med-West has gone under, throwing 35 people out of work. Meanwhile, the Slatic family worries about how they can pay their bills and put their two daughters through college. The loss of funds has also “devastated” James’ ability to support his 86-year-old mother.
The Slatic family (photo credit: Institute for Justice).
Now the Slatics have partnered with the Institute for Justice (IJ) and filed a motion last week to reclaim their personal accounts. A public interest law firm, IJ has long been at the forefront to end civil forfeiture. Through its litigation, IJ has directly saved more than $4.7 million worth of property for its pro bono clients.
IJ is currently defending a college student who had his entire life savings seized by the DEA, despite not being charged with a drug crime, and has thwarted an attempt by the federal government to forfeit a $1.5 million property in Anaheim, simply because the landlord rented space to a medical marijuana dispensary, which sold four grams of cannabis to an undercover officer.
The Slatic case “illustrates the abusive power of civil forfeiture at its worst,” said Wesley Hottot, an attorney at the Institute for Justice. Since voters approved a ballot initiative in 1996, medical marijuana has been legal in California. So to justify the seizure, San Diego Detective Mark Carlson claimed in his affidavit that Med-West was violating a California law that bans “chemical extraction” of concentrated cannabis. (Hilariously, Carlson also cited his familiarity with “controlled substance slang and jargon” as one of his qualifications.)
But as the California Attorney General once concluded, that statute was designed to target clandestine meth labs and other types of highly combustible drug production. In any case, that statute does not apply, since “no raw marijuana or extraction equipment was found at Med-West precisely because Med-West did not perform extraction,” IJ notes in its motion.
Slamming San Diego for trapping the Slatic family in “legal limbo,” IJ instead argues that law enforcement lacked probable cause when it seized the family’s personal accounts. (IJ is not challenging the money seized from Med-West’s business account.)
In California, courts have long ruled that probable cause is a robust standard, and not a blank check for baseless seizures. For instance, in one case, officers searched a home in San Mateo County and seized $47,000, because they also found about three ounces of marijuana and a minute amount of cocaine during the search. Nevertheless, a California appellate court ordered the money returned because the government did not provide “sufficient evidence…linking the cash to a narcotics transaction.” To demonstrate such a link, “the government must establish some nexus between the seized funds and a narcotics transaction.”
For the Slatics’ case, IJ argues that the government has completely failed to trace their money to any criminal wrongdoing. “A family does not lose the right to own money based on government’s suspicion that one family member committed a crime,” its motion claims.
Yet another, more lucrative motivation drives the attempt to take the Slatic family’s cash. Under California law, once a property has been forfeited, agencies can keep up to 66.25% of the proceeds for their own use. So if law enforcement can successfully forfeit the $324,000 from Med-West and the additional $100,000 from the Slatics’ personal accounts, they can reap a massive windfall. To put those figures into perspective, the Med-West and Slatic seizures are almost equal to all of the seizures made by San Diego law enforcement under state law in the past two years, combined.
“This case is not about crime fighting,” Hottot said. “This case is about policing for profit.”
James Slatic (photo credit: Institute for Justice).
Police and prosecutors can further profit by partnering with federal agencies in a forfeiture program called “equitable sharing.” An investigation into equitable sharing by The Washington Post found that “in 81 percent of cases no one was indicted.” The San Diego County District Attorney’s Office spent $604,000 on salaries and overtime—more than a quarter of all its federal forfeiture spending. Another $444,000 went to travel and training. San Diego prosecutors even used equitable-sharing funds to buy furniture and to lease office space. Forfeiture was even more lucrative for police, with the San Diego Police Department spending over $9.1 million in federal forfeiture money.
Nationwide, between 2002 and 2012, the federal government processed more than $1 billion in marijuana-related asset forfeitures. By far, California had the largest share of cannabis forfeitures, accounting for more than $180 million, The Wall Street Journal reported in 2014.
Thankfully, abusive seizures may soon be a thing of the past. In a major reform signed by Gov. Jerry Brown in late September, California will oblige agencies to first obtain a criminal conviction before they can receive funding from equitable sharing. The new reform also requires that an owner be convicted before the government can forfeit cash under $40,000; previously, the threshold was set at $25,000. And on Tuesday, voters will vote on Prop. 64, which would legalize recreational marijuana throughout California.
“This is a last-ditch effort to grab as much cash as possible,” said Allison Daniel, an attorney at the Institute for Justice, also on the Slatics’ case. “With civil-forfeiture reform and marijuana legalization, the San Diego District Attorney knows that time is running out on this type of policing for profit.”