The DEA Wants to Use a $37 Pot Sale to Seize a $1.5 Million Anaheim Building

Will law-abiding citizens lose their investment property in the city that hosts the Kush Expo?

The DEA Wants to Use a $37 Pot Sale to Seize a $1.5 Million Anaheim Building

On July 13 and 14, stoners across Southern California will flock to the Anaheim Convention Center for the Kush Expo, a $20-per-ticket pot-stravaganza of all things cannabis. Vendors will display their wares—everything from bongs and hookahs to hydroponic growing equipment and nutrients—and doctors will be on hand to write medical-marijuana recommendations for folks in the mood to smoke weed in the tented "medication area." There will even be a "hot girl" contest for patients with presumably sore eyes.

But don't let this event let you think Anaheim is pot-friendly. Despite allowing the Kush Expo to operate annually since 2010, the city banned medical-marijuana dispensaries in 2007 and has extended the prohibition every year since. Last year, the city also called in the U.S. Drug Enforcement Administration (DEA) to help crack down on pot clubs. In August, the DEA sent threatening letters to dozens of landlords and filed three asset-forfeiture lawsuits, including one against the owner of a $1.5 million building on Ball Road.

As it happens, the building owners are the kind of clients whom defense attorneys love to represent: law-abiding citizens. Specifically, they are married, in their late middle age and from Irvine. The wife is a dentist; the husband a computer engineer who holds a government security clearance, which is why the latter asked to remain anonymous. Although he feels he has done nothing wrong, he explains, even being accused of allowing his property to be used to break the law is embarrassing to him.

Bob Aul

According to the engineer, he and his wife purchased the Anaheim building, which has suites for up to 12 offices, in 2003 and that her dental practice was located there. (She has since relocated her office to Lake Forest.) Over the years, they've rented to a variety of tenants, from insurance companies to an immigration service. In 2009, Deputy Attorney General David Ogden, presumably speaking on behalf of the newly inaugurated Barack Obama, issued the so-called Ogden memo, instructing federal prosecutors to not target medical-marijuana patients. California saw an immediate explosion of cannabis dispensaries. Anaheim was no exception, and the engineer quickly found himself fielding offers from marijuana collectives.

Because of the Ogden memo, because medical marijuana was legal under state law, and because his tenants held business permits from the city, he figured he wasn't doing anything illegal. "I am a law-abiding citizen," he says. "I didn't think I was doing anything wrong."

In its effort to seize his building, however, the DEA alleges otherwise, although it is clear from reading the agency's complaint it conducted absolutely no investigation itself, but rather relied on information provided by the Anaheim Police Department, which had conducted an undercover operation targeting the building. The investigation began—where else? —on Weedmaps, on which, according to the complaint, a pot club call Remedy Tree was located at the building and began advertising in December 2010.

"Happy New Year my fellow potheads!!!" Weedmaps reviewer Filiblunt420 wrote on the website on Jan. 1, 2011. "Man, Remedy Tree gots it goin on [sic]. . . . I picked up some Platinum Kush, some Blackberry and they hooked me up with some Plain Wreck!! I just toked on a gram of each and every hit was an adventure!! I am SO LIFTED right now . . . even as I am typing this review."

The landlord later evicted the club, but on June 11, 2011, he began renting to a club called ReLeaf Health & Wellness. Once again, the Anaheim police "investigated" the "criminal activity" allegedly taking place there simply by reading stoner reviews on Weedmaps, taking particular notice of the fact the club offered a pot strain called "Snoop OG." On Dec. 2, 2011, an undercover officer posing as a patient with a legitimate doctor's recommendation for cannabis—something required of all entrants to the collective—"purchased 4.2 net grams of marijuana for $37."

The investigation ended there, but the single sale—and a sale it was, since most pot goes for $50 or $60 per eighth of an ounce—was enough evidence for the DEA to argue that the otherwise-harmless computer engineer and dentist should lose their retirement-investment property. On Aug. 20, 2012, the agency filed its lawsuit. According to the landlord, he immediately ordered ReLeaf to leave the building, serving it with a three-day eviction notice; the club complied and left posthaste.

The landlord then sent certified letters to both the feds and the city of Anaheim, notifying them of his actions and requesting the government not seize his property. "I had no idea the tenant may allegedly be engaged in illegal activities at this location," he wrote. "I hope we do not have to go through legal procedures to . . . lift the lis pendens [pending lawsuits] filed against my property. My intent is to save the judge's valuable time, court time and taxpayers' money being used unjustly."

But the DEA refused to save time or money and drop the case, a fact that seemed to surprise the federal judge handling the case, U.S. District Court Judge Andrew J. Guilford. In a Dec. 3, 2012, hearing, Guilford repeatedly referred to inconsistencies in the federal government's policy on marijuana—first signaling (via the Ogden memo) that it wasn't going after medical-marijuana clubs, then cracking down and sending threatening letters to landlords. He even wondered aloud if President Obama would change his mind about marijuana again, after the DEA had already seized the building at issue in the case.

"Do you intend to carry this all the way through forfeiture?" Guilford asked U.S. Attorney Greg Parham.

"Yes, absolutely, your honor," Parham responded.

Guilford then asked Parham whether, assuming the DEA felt it necessary to threaten landlords, he was certain he'd chosen the right landlord to threaten.

"Don't you think in this world of change and whatever, progress or regress, depending on your point of view, this is the exact case that you don't want presented as a test case on the interaction of federal and state [law] and medical and dispensaries and forfeiture?" Guilford asked. "[Y]ou know, a poor dentist has to turn over a whole bunch of money just because they maybe were relying on what they had heard federal agents say?"

The lawyer for the engineer and dentist who may be in the process of losing their nest egg is Matthew Pappas. He also represents several former patients of ReLeaf Health & Wellness, including Marla James, a wheelchair-bound amputee who smokes marijuana to relieve chronic pain, in a lawsuit against Anaheim for violating California's Disabled Persons Act by calling in the feds to crack down on cannabis clubs. "The only evidence in this case is a $37 purchase of medical marijuana and an anonymous comment on a website that anybody could have written," Pappas says. "For this, they want to take a $1.5 million building."

Although it's not the city threatening to take away the engineer's building, the city did provide the DEA with the "evidence" against him, and then invited the feds to threaten him. "The question I have is if the city of Anaheim authorizes the Anaheim Convention Center to promote medical-marijuana dispensaries in the happiest place on earth, how is that not a double standard?" Pappas' client asks. "And if it's so bad, why doesn't the federal government raid the Anaheim Convention Center? They have no right to come in and tell me I can't do this if they are promoting it themselves."

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