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Operation “Chronic Problem" Results in Federal Charges against Nevada Marijuana Dispensary Operators

LAS VEGAS, NV – Federal charges have been filed against 15 individuals alleging they were distributing marijuana in violation of federal and state law through the operation of storefront medical marijuana businesses, announced Daniel G. Bogden, United States Attorney for the District of Nevada. Federal and local authorities arrested 12 of the individuals this morning.

The defendants are charged in four criminal complaints filed in federal court in Las Vegas on December 17, 2010, and unsealed today. Charges include conspiracy to distribute marijuana, distribution of marijuana, conspiracy to commit money laundering, distribution of marijuana near schools or colleges, possession of a firearm in relation to drug trafficking, and failing to disclose or concealing information concerning Social Security benefits. Businesses named in the criminal complaints include, The Happiness Consultant (THC), the Nevada Compassionate Center, Dr. Reefer, LV Fingerprinting, and Organic Releaf.

“I commend all the agencies assisting in this joint investigation for their outstanding efforts,” said U.S. Attorney Bogden. “The Department of Justice is committed to the enforcement of the Controlled Substances Act. Prosecution of individuals, who operate commercial enterprises that unlawfully market and sell marijuana in violation of both federal and state law, will continue to be a focus of our enforcement efforts. Nothing in the Nevada Medical Marijuana Act permits the establishment of such commercial enterprises in Nevada. Yet, drug intelligence information indicates there are currently 45 to 60 of these marijuana trafficking enterprises operating unlawfully in the Las Vegas Valley alone. Our joint law enforcement efforts to apprehend these drug traffickers are ongoing.”

"Today's arrests were the result of a joint law enforcement investigation developed to identify those individuals distributing harmful drugs illegally under both state and federal law,” said DEA Special Agent in Charge Timothy J. Landrum. “Marijuana remains a top revenue source for drug organizations, and young people are often misinformed about this drug whose potency has tripled in the past 20 years and sends more youth to treatment than any other drug. Accordingly, DEA will continue to work with our law enforcement partners to identify and investigate those responsible for propagating this dangerous drug."

The criminal complaints allege that the defendants are owners/operators and/or employees of “medical marijuana” dispensaries in Las Vegas. The complaints state that these dispensaries are being established throughout Nevada with increasing frequency, and that the dispensaries are actually just storefront businesses operating to sell marijuana for profit. Storefront marijuana dispensaries are not recognized under Nevada law, and it is illegal to sell medical marijuana in Nevada. If you are a medical marijuana patient or caregiver in Nevada, you must grow your own marijuana. The dispensaries frequently seek protection under Nevada law by claiming they are primary caregivers to medical marijuana patients; however, they do not “consistently assume responsibility for the housing, health, or safety” of their customers as a primary caregiver is required to do under state law. The dispensaries also typically acquire the marijuana they sell from third-party vendors, and there is no state law in Nevada that allows for the production and sale of marijuana from third-party vendors to dispensaries. The dispensaries often claim that they are requiring “donations” rather than compensation in return for marijuana, in an effort to conceal the unlawful nature of their business.

The following defendants are expected to make initial appearances before a federal magistrate judge in Las Vegas on Friday, January 7, 2011.

Case No. 2:10-mj-1023-GWF
John BIRMELE, 36, aka Mr. Happy, of Las Vegas, NV
Kelly BIRMELE, 36, of Las Vegas, NV
Laura RHOADES-YOKOI, 36, of Henderson, NV
John Allen YOUNGBLOOD, 40, of Los Angeles, CA
Timothy HOUGH, 31, of Henderson, NV
Michael ELLSWORTH, 57, of Henderson, NV

Case No.2:10-mj-1024-GWF
Reynalda BARNETT, aka Reyna Barnett, 59, of Las Vegas, NV
Clyde BARNETT, 21, of Las Vegas, NV
Pierre WERNER, 39, of Las Vegas, NV
Ron TESTON, 57, of Las Vegas, NV
Kristen KRUSYNA, 21, of Las Vegas, NV

Case No: 2:10-mj-1025-GWF
Michael MCAULIFFE, 53, of Las Vegas, NV
Katree Darriel SAUNDERS, 30, of Las Vegas, NV

Case No.2:10-mj-1026-GWF
Chad UHL, 26, of North Las Vegas, NV
Caroline DELLAVILLE, 49, of Henderson, NV

The investigation is being conducted as part of the Organized Crime Drug Enforcement Task Force (OCDETF) and the Nevada High Intensity Drug Trafficking Area (HIDTA) program. Specific agencies investigating the cases are the DEA, Las Vegas Metropolitan Police Department, IRS Criminal Investigation, the Office of the Inspector General for the Social Security Administration, Bureau of Indian Affairs, and North Las Vegas Police Department.

The public is reminded that a criminal complaint is a preliminary charging document and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Further information on each case can be obtained through the federal court’s PACER system, https://ecf.nvd.uscourts.gov/cgi-bin/login.pl.


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