Pot club owner indicted on fraud charges
A criminal grand jury has indicted the owner and two employees of a San Jose marijuana dispensary for allegedly failing to pay more than $2 million to the city and state, according to the Santa Clara County District Attorney’s Office.
Ben Kit Lew, 44, Brian Wong, 43, and Ernest Ma, 28, are scheduled to be arraigned Thursday on felony charges including illegal marijuana sales, tax fraud, insurance fraud, workers’ compensation fraud and money laundering, prosecutors said.
Lew is the owner of San Jose Organics, a marijuana dispensary near the Santa Clara County Fairgrounds that made about $10 million since the business started in April 2013 through July, according to prosecutors said.
Law enforcement officials raided the dispensary on Tully Road in July, prosecutors said.
The dispensary was allegedly earning about $25,000 daily in sales, prosecutors said.
The business allegedly owed more than $2 million back to San Jose and the state, prosecutors said.
In July, Lew was arrested at his San Francisco home, where authorities recovered $800,000 in cash, according to prosecutors.
Investigators found $400,000 at other places linked with the case, prosecutors said.
Lew, who was charged with 46 felonies and a misdemeanor, faces up to 46 years in prison if convicted, according to prosecutors.
Wong, a dispensary manager from San Francisco, is facing 15 felonies and one misdemeanor. He faces a maximum sentence of 23 years in prison, prosecutors said.
Ma, a secretary at the dispensary, was charged with six felonies and if convicted faces a 10-year sentence, according to prosecutors.
Santa Clara County Deputy District Attorney Edward Liang said in a statement:
“People like these defendants are profiteers exploiting the medical marijuana laws. … They do this, while at the same time ignoring laws that every other business in California is required to follow. We would not accept this conduct in any other industry. We will continue to hold medical marijuana dispensaries to the same standards.”
The defendants are set for arraignment at 1:30 p.m. Thursday at the Hall of Justice in San Jose.