FRESNO, CA -- The first day of trial for Luke Scarmazzo and Ricardo Montes was supposed to start with a bang. The jury was seated, the witness list was finalized, the pre-trial motions were decided and all the disputes over evidence seemed to have settled down. The attorneys’ opening statements were to have taken center stage bright and early, except for one thing: there was still the matter of selecting the alternate jurors.
It was a small task, which Judge Oliver Wanger expected to consume less than an hour. But, as it had with the selection of the acting jury, picking out the alternate jurors took much longer than expected. And, just like before, a string of testimonials about marijuana use drained the pool of candidates and stretched the process out over a period of two hours.
The group of possible alternates had been silent when asked if they had personal views regarding marijuana. An avalanche of opinions happened only after a question about interpersonal influence, in response to which a lone woman raised her hand and admitted that she was easily swayed by the viewpoints and feelings of others.
“You’re saying you tend to be swayed?” Judge Wanger asked.
“Yes, I tend to be swayed,” the confessed conformist admitted.
Following this acknowledgement, a shaggy male wearing a backwards baseball cap suddenly spoke up about marijuana. “As far as the marijuana smoking, I don’t really think they did anything wrong,” he said regarding the defendants.
Two females then volunteered that they agreed with that statement, and one of them added that she actually had a medical marijuana card. An older woman offered a story about losing a 20-year marriage to drugs, but this did nothing to stop the flow of pro-marijuana rhetoric.
The man who spoke up next was weathered and gaunt, but he talked passionately from under a long white beard. “I have 13 grandkids, and I’ve been smoking marijuana since the 1960s. I feel a lot of people have a misconception of it. I feel like…if you’re going to be criminalized for smoking marijuana, then there’s something wrong with society.”
The judge quickly excused him, along with the other outspoken individuals, but as the old man passed by the defense table on the way out, he turned to tell Scarmazzo and Montes, “Good luck to you guys.”
Of the remaining potential alternates, many had close ties to law enforcement and readily admitted that they gave an officer’s testimony more weight than a civilian’s word. Most of these people were eventually excused, as well as a pastor who acknowledged that he took offense to hearing expletives. It began to look like the group could dwindle down to zero, but everyone hushed up again and the numbers held steady.
As the morning continued to draw to a close, both sides settled on four women from within this small group. That number had been agreed upon by the attorneys and the judge, and was proportionate to the four-week estimate for the trial’s length. It had begun with a slow simmer rather than a bang, but the afternoon’s proceedings showed how easily that simmer could be brought to a boil.
Acting quickly but conscientiously, Judge Wanger assembled the entire group of sixteen into the jury box and administered an oath to them. Next, as a prelude to the opening statements from the attorneys, the judge gave a bare-bones outline of the charges involved in the case. It was a standard description of each of the criminal counts, but the judge nonetheless managed to give everyone in the courtroom quite a startle when he announced that the defendants were facing a charge for “conspiracy to manufacture, distribute, and possess with the intent to distribute methamphetamine.” Not catching his own mistake, the judge continued to read and to explain the next charge. He only realized the error once he had been interrupted and informed by Tony Capozzi, Scarmazzo’s attorney.
Once it got his attention, Judge Wanger appeared quite surprised by the error. “I was referring to writing that had the wrong word on it,” he explained.
It seemed the judge had been reading from his default referral text for conspiracy drug charges, and that this text specified methamphetamine suggested that it might be the most common substance in the drug cases the judge handled. Whatever the cause of his slip, he took pains to make sure it was clarified properly.
Judge Wanger looked intently at the jurors and reiterated that the word “methamphetamine” was used entirely by mistake. “Do not consider that word,” he instructed them. “Put it out of your mind. It has nothing to do with this case.”
Following the judge’s description of the charges, the government was given the floor for its opening statement. Assistant U.S. Attorney Elana Landau took this responsibility, and it was quickly revealed that she wasn’t one to beat around the bush. “The evidence in this case will show that Luke Scarmazzo and Ricardo Montes made their living selling drugs in violation of federal law,” she declared at the outset.
The prosecutor told the jurors that in October 2004, Ricardo Montes started paperwork for the CHC that listed the business as a provider of natural health care products. “But what was really happening was the distribution of marijuana and marijuana products!” she said, the drama in her voice implying the revelation of some sinister secret.
“Police officers, we will learn, were not welcome in the club,” Landau continued. She then insinuated that this policy was the reason why law enforcement officers had to go undercover to find out what was going on in the back room of the CHC. And what they found, Landau said, was that the sole activity in that room was the sale of medical marijuana.
The prosecutor used the term freely, without the addition of terms like “so-called” and without immediately reminding jurors that medical marijuana was an irrelevant concept to the case. More than her actual words, however, her tone conveyed the suggestion of contemptible wrongdoing on the defendants’ part. Landau had the same sound in her voice while announcing that the CHC had far more than the five employees required for the charge of continuing criminal enterprise. Also, she emphasized to the jurors, Scarmazzo and Montes had been the leaders in the company. They were responsible for the hiring and firing of employees, Landau said, and they obtained substantial income from the CHC’s operations. And even though sales had been slow for the business in the very beginning, the prosecutor noted that it was bringing in upwards of a million dollars per month by the time of the bust.
“In order to sell marijuana, you must have access to marijuana,” was the maxim offered by the prosecutor. It was also her segue into the discussion of various cultivation activities associated with the defendants.
One of these was discovered in January 2005, Landau said, when officers responded to a call about an apartment that had been broken into. “What they found inside was not a victim of burglary, but a substantial marijuana grow,” she proclaimed, even though the apartment had been burglarized. Landau told the jurors that those thieves had made off with all but twenty of the marijuana plants that had been growing inside the unit, and that during the search operations, Scarmazzo had walked up to the scene. Based on law enforcement reports, he told the officers that he had been cultivating marijuana there for himself and thirteen friends. “There was no mention of medical marijuana,” the prosecutor said regarding the admissions. “There was no mention of the California Healthcare Collective.”
In May 2005, Landau summarized, officers made a traffic stop on a car containing both defendants and called in a K-9 unit because they noticed a strong odor of marijuana from the vehicle. The prosecutor admitted that the only marijuana found was residue “scattered throughout the car,” but she focused more heavily on the allegation that large sums of loose money were discovered in the vehicle. “The California Healthcare Collective was a strictly cash venture, for obvious reasons,” she told the jury.
According to Landau, large sums of cash were also found when officers searched Scarmazzo’s hotel room in September 2005, and again during an October 2005 traffic stop that officers made on Montes. In both instances, the prosecutor reported, the defendants claimed that the cash came from the CHC’s operations and that it was intended for bank deposits.
The prosecutor didn’t point out that some proceeds of the CHC came from law enforcement agencies themselves, but she did move on to address the undercover buys. “Each time the officers went in, they were sold marijuana,” Landau claimed. “That just goes to show the continuing criminal enterprise over the time period we described.”
In order to gain further evidence, officers set up surveillance on the defendants and their associates, including brothers Antonio and Jose Malagon. The results of this surveillance, as Landau portrayed them, showed the Malagons going into a triangle of properties under watch, emerging with large bags that subsequent traffic stops and searches revealed to contain pounds of marijuana. The prosecutor said that the brothers claimed this marijuana was destined for the CHC, where they worked as security guards and suppliers of marijuana clones. Landau then described the process of cloning to the jury, ending with the comment, “Apparently there’s an art form to it, and Antonio Malagon was particularly good at it.”
The surveillance also netted Montes in a similar fashion, according to the prosecutor, and officers ended up securing a warrant for the search of his home. “Where there is Mr. Montes, there is cash,” Landau said, “and, in this case, cash and marijuana.” Allegedly, officers found $90,000 in the home, as well as documents linking Scarmazzo to the location and two handguns. “One was registered to Mr. Montes,” the prosecutor said of the guns. “The other turned out to be a stolen gun.”
From the simultaneous search of the CHC, Landau reported the seizure of 94 pounds of marijuana and a “Desert Eagle” firearm, as well as a clue that became the key for another bust. In the CHC, she said, officers found a disproportionately high PG&E bill for an address attributed to an associate of the defendants named Lucky Boissiere. Officers then got a search warrant for the house, citing the high levels of electricity use as probable cause that marijuana was being grown inside. “They found a house that had been turned into an indoor marijuana grow,” the prosecutor asserted. She told the jury that the search yielded “a hundred grown adult plants and over a thousand, I guess, baby plants, for lack of a better word.”
Landau wrapped up her monologue with some guesswork about the position the defense might take. One likely argument, she speculated, would be that the CHC was a legitimate business with transparency in its financial records. But the prosecutor saw it another way. She claimed that the daily income of the CHC, as determined from Scarmazzo’s seized receipt book, was at odds with tax filings and bank deposits. “It doesn’t add up,” she said simply. As for where the extra money might be going, Landau described the discovery of Wells Fargo safety deposit boxes associated with the CHC – when they were opened, she said, investigators found over $100,000 in “cold, hard cash.”
In the end, of course, claims of legitimacy were irrelevant to the government…and the prosecutor eventually came to this point. “They will suggest that this was a legitimate business,” she predicted about the defense’s strategy. “But under federal law, there can be no legitimate marijuana business.” Therefore, she concluded, she would be asking the jury to return verdicts of guilty on each and every count.
Montes’s attorney, Robert Forkner, rose to address the jurors. He smiled charmingly at them, explaining that an opening statement is an attorney’s opportunity to make assertions about what the trial evidence will show. “We didn’t interrupt or object when the government made theirs,” he said. “I hope they give us the same opportunity.”
It was the kind of comment that one might see as a forewarning, but for the next several minutes, the defense attorney uttered nothing even remotely objectionable.
He gave a brief biography of his client, describing Montes growing up into early adulthood in Modesto. In particular, Forkner related an event that changed the course of the young man’s life – in 2003, Montes was in a car accident that injured him severely and left him with scars that are still readily visible. According to the defense attorney, Montes had experienced negative effects from the Vicodin he was prescribed after the accident, so he got a doctor’s recommendation to use marijuana. But because there were no medical marijuana dispensaries in his county, Montes had to travel long distances in order to get access to marijuana…that is, until he got a $50,000 settlement from his accident and had an idea about what to do with the money. “He said ‘You know what? Stanislaus County needs a medical marijuana dispensary,’” Forkner said of his client, then put the CHC’s articles of incorporation on the courtroom’s video screens for display.
Assistant U.S. Attorney Kathleen Servatius cut in with an objection, saying this was not an appropriate presentation of evidence. As soon as the jurors had been sent to a break, the prosecutor elaborated. “I have an objection to the way the defense is doing its opening,” she told the judge. “I don’t show evidence to the jury during opening statements. To do so is premature.”
When the judge decided that the articles of incorporation were admissible, Servatius seemed appalled. “The court is admitting evidence while not in the presence of a witness!”
“I am admitting them by the rules of evidence, Ms. Servatius,” Judge Wanger clarified. Still, the prosecutor maintained a standing objection to the presentation of the evidence. “I will not take up another minute of the jury’s time,” the judge pledged, unwilling to sustain the objection.
As Servatius thumbed through a file of documents the defense planned to use during its opening statement, Forkner began to bat around the possibility of withdrawing some of the documents. Scarmazzo, half-standing, leaned across the defense table, imploring the attorney in a hushed voice to keep the documents in. At the same time, Judge Wanger asked if there was anything else in the defense’s folder that the government opposed. “Well, she threw the file back on my desk, so I’m assuming not,” Forkner said of Servatius.
Whether intentionally or by accident, Forkner had succeeded in antagonizing the prosecutor. Servatius, irate, complained about the defense’s opening remark to the jury. “He states that he expects me to object, which suggests that my objections are not being taken seriously,” she griped.
Judge Wanger listened to the prosecutor’s grievances, but when she said she opposed the articles of corporation being used at all, the judge overruled her objection immediately. He similarly overruled her objection to the presentation of a tax payment document that Forkner wanted to use.
“But now we are getting into them arguing, ‘This is a legal business because we paid our taxes,’” Servatius said of the defense.
“No,” the judge disagreed. “They can show they can and did operate as a business.” If tax documents and articles of incorporation weren’t admissible, he argued, how could a charge of continuing criminal enterprise be proven?
Once again, Servatius was up against the odds. Having chosen to pursue the continuing criminal enterprise charge, she was breaking new ground with medical marijuana prosecutions, as well as pursuing the desired twenty-year mandatory minimum sentence. But it was that same charge that was allowing the defense to bring in otherwise-inadmissible business documents that conveyed the nature of the dispensary’s operations. Perhaps another judge would have gone along with Servatius, but in front of Judge Wanger, the prosecutor’s ambitions had suddenly backfired on her.
And when the jury returned to the box, Forkner continued presenting business documents. After all, the government had suggested that the CHC’s finances didn’t add up, but there were no IRS charges and there was certainly no tax evasion. To go to this last point, Forkner showed the Board of Equalization records of sales tax that had been paid by the CHC. “There are stacks and stacks of these – you’ll have a chance to take it back to the jury room with you and look at it,” the defense attorney promised.
There were also stacks of declaratory forms to the IRS, which must be filled out whenever there’s a bank deposit of $10,000 or more, as well as a record of CHC transactions that had been kept in a book. And, Forkner assured the jurors, there would be plenty of caregiver letters for them to look at during their deliberations.
The reason for so many records was a thriving business, or so the defense argued. “You will hear evidence that these gentlemen paid themselves well,” Forkner acknowledged. “$13,000 a month. They received pretty handsome salaries.”
As for why his client had so much cash around, Forkner simply said that Montes didn’t like to have to go to the bank everyday, so he would make less frequent trips to deposit proceeds. The various figures ended up on police records because of things like traffic stops, one of which involved mistaken identity. In the cases of the traffic stops by local police, Forkner claimed, the money was seized but later returned to his client. As for the firearm in the car, the argument was that Montes mistakenly thought he was allowed to have it in the car, when it actually must be kept in the trunk. According to Forkner, Montes told the officers about the guns and the cash right away whenever he was stopped. It was a legally-purchased firearm, the defense attorney claimed, and even presented the receipt and the background check on his client. The way Forkner painted him, Montes was not the thug the government had alleged him to be.
Forkner was nonetheless the first to acknowledge that Scarmazzo could come off seeming thuggish in the music video that would be shown, in which he verbally and non-verbally gives a “fuck you” to the U.S. government. And, according to the defense attorney, the government has said “fuck you” right back to Scarmazzo by making him their target. Forkner said the undercover agents tried hard to arrange for the CHC to make a backdoor deal, but it wouldn’t. The defense attorney claimed that the CHC upset some people because it wouldn’t accept new patients without being able to contact their doctor to verify the recommendation, and because it was strict on the allowable daily limit of marijuana that can be purchased. There was nothing shady here, Forkner asserted – contrary to the government’s insinuation, police officers were indeed allowed into the CHC, so long as they had a medical marijuana recommendation from a physician.
Landau objected, calling the defense’s statements argumentative. The judge sustained the objection, and Forkner backed up only slightly. There was nothing shady about the CHC, he maintained. They even had security guards and a verification system in place to make sure that marijuana was only sold to people with the proper documentation. It had taken a lot of forgery, Forkner observed, to get around the safeguards the CHC had in place. “This is the government making the false ID, so it’s done pretty well.” And it was also the government on the other end of the line during the verification call, pretending to be a physician checking records for this fake patient. Forkner saw this as a lot of artifice, especially when done for several separate buys, for a business that was operating openly.
“There’s no mystery of what we’re talking about here,” the defense attorney stated.
“It was their business that they started,” Forkner said of the defendants, “and their business was selling medical cannabis.”
He concluded by saying that, after everything had been seen and shown, he hoped the jury would return from deliberation with not guilty verdicts all around.
Once Forkner had taken his seat, Capozzi declared he would delay his opening statement until after the government had presented its case. That would be a long time off, it seemed. The witness list was unusually extensive, containing several dozen names, and cross-examination was sure to be a long, fierce battle with many of those who were testifying. The government’s witnesses would be the first called to the stand, and the entire courtroom waited with anticipation for the testimony to begin.
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