Pubdate: Fri, 25 Jan 2013
Source: San Diego Union Tribune (CA)
Copyright: 2013 Union-Tribune Publishing Co.
Contact:  http://www.utsandiego.com/
Details: http://www.mapinc.org/media/386
Note: Seldom prints LTEs from outside it's circulation area.
Author: Greg Moran
Page: B1

POT DEALER TO DO EIGHT YEARS IN PRISON

Man Was Secret Owner of Two Dispensaries That Pulled in Estimated 
$3.5m in 11/2 Years

SAN DIEGO - A federal judge Thursday sentenced a man who was 
operating a multimillion-dollar drug dealing business out of two San 
Diego medical marijuana dispensaries to more than eight years in prison.

Joshua Hester, 32, pleaded guilty to conspiracy to distribute more 
than a ton of marijuana, maintaining a drug-related business, money 
laundering and other charges. Hester also admitted he was the secret 
owner of now-defunct medical marijuana dispensaries in downtown San 
Diego and Mission Beach.

The case capped a large-scale investigation begun in 2008 that used 
wiretaps to reveal Hester's role and ownership of the dispensaries, 
and led to the indictment by the U.S. Attorney's Office in San Diego 
of a dozen people connected to Hester in 2010.

U.S. District Judge Irma Gonzalez said Hester was being punished not 
for being in the medical marijuana business, but in part for using 
the state law that allows medicinal use of marijuana to enrich himself.

"You used state laws that allow people to benefit from these 
cooperatives for your own benefit," Gonzalez said.

U.S. Attorney Laura Duffy said that Hester exemplified the type of 
person involved in medical marijuana that federal law enforcement in 
San Diego has targeted: a drug dealer who used the state law as a 
shield for illegal drug dealing.

Since 2011, Duffy's office has embarked on a crackdown on medical 
marijuana outlets in San Diego, effectively shutting down 95 percent 
of the operations. State law allows marijuana for medical uses, but 
federal law still categorizes any use of the drug as a crime.

She said after the hearing that Hester's case is egregious in the 
scope of his operations but not unusual.

"This investigation and other criminal investigations we have been 
involved in have shown us many of the marijuana dispensaries are 
operated by people with criminal backgrounds," Duffy said. "They are 
operated for profit. They are not these small cooperatives and 
collectives that are serving seriously ill people. I'm not saying all 
of them, but many are serving recreational drug users who are not 
legitimately sick."

That drew a sharp response from medical marijuana advocates who have 
criticized the federal crackdown in San Diego and other parts of the state.

"To say the entire medical marijuana industry is an extension of this 
type of activity is absurd and extremely damaging," said Kris Hermes, 
a spokesman for Americans for Safe Access.

Hermes said it shows that federal prosecutors are focused on 
"shutting down every dispensary in the state before they will admit 
these facilities are in any way in compliance with state law."

During Hester's sentencing, the judge said not all dispensaries are 
wrong and that they can serve a lot of good in communities. But 
Gonzalez forcefully said that Hester had abused the system.

William Sherman, head of the U.S. Drug Enforcement Administration 
office in San Diego, said he disagreed with the judge's view of the 
dispensaries. The DEA has investigated hundreds of dispensaries, he said.

"None of them have been true collectives or true cooperatives that 
are in the business of compassionate care," Sherman said after the 
court hearing. "They are all in the business of making a profit. This 
is a big business."

San Diego Mayor Bob Filner has said he wants to write an ordinance 
that would allow dispensaries to reopen, setting up another potential 
round of conflicts with federal law enforcement.

Duffy said her office will not change course on enforcing federal law 
if new dispensaries open.

The dispensaries Hester controlled pulled in an estimated $3.5 
million in less than 18 months. He set up a sham board of directors 
and executed paperwork that hid his involvement, said Assistant U.S. 
Attorney Sherri Walker Hobson.

In addition to fancy cars and jewelry, Hester bought a Rancho Santa 
Fe mansion and a 37-acre spread on Palomar Mountain to grow the drug 
and as a way to launder marijuana profits.

He is among the last defendants in the case to be sentenced and has 
received the longest prison term. He was also ordered to forfeit 
$575,000 in assets.

Earlier this month, Marco Luis, a Realtor who set up the two land 
purchases to hide Hester's involvement and is serving a four-year 
person term, was ordered to pay $945,702 to two banks, representing 
the losses they had on the fraudulent loans.
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MAP posted-by: Jay Bergstrom