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    United States Attorney's Office
    Central District of California

    Thom Mrozek
    Public Affairs Officer

    (213) 894-6947

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    Release No. 07-093

    July 17, 2007


    The owners and operators of four marijuana dispensaries – in Morro Bay, Corona, and two in West Hollywood – have been indicted on federal criminal charges alleging that they conspired to distribute and then distributed large quantities of marijuana, including to minors, for significant profits. Also indicted was a medical doctor who wrote marijuana recommendations for payment, including recommendations for minors, with no medical examinations.

    In 1996, voters in California adopted Proposition 215, which authorizes the distribution of “medical marijuana” in certain circumstances. Under federal law, however, distribution of marijuana for any purpose is illegal.

    In Morro Bay, Charles C. Lynch, 45, of Arroyo Grande, was the owner and operator of the “Central Coast Compassionate Caregivers” marijuana store. The indictment against Lynch alleges that he and his employees sold more than $2.1 million in marijuana at the store in just one year. The indictment further charges that, during the same one-year time period, Lynch and his employees sold marijuana to 281 minors. Also charged in the indictment is Dr. Armand T. Tollette Jr., 45, of Culver City, who is accused of writing marijuana recommendations for patrons of the Morro Bay marijuana store. The indictment alleges that Tollette wrote recommendations for minors, failed to conduct physical examinations before writing recommendations, and paid “finder’s fees” in marijuana for client referrals.

    In a separate indictment, Larry R. Kristich, 64, who is believed to be in Costa Rica, and James Carberry, 51, who is believed to be in Arizona, were charged with operating a chain of marijuana stores in seven different cities in California. The stores, which operated under the name “Compassionate Caregivers,” were located in Oakland, San Francisco, San Leandro, Ukiah, Bakersfield, San Diego and West Hollywood. The indictment alleges that sales of marijuana and THC-laced products at the stores totaled more than $95 million over a four-year period, and that Kristich used profits from marijuana sales to purchase expensive automobiles and real estate in Costa Rica. The indictment charges that Kristich, with a business associate, James L. Ealy, 40, of Tujunga, set up non-drug-related businesses to launder the profits of the marijuana stores.

    Carberry was an employee of Kristich and the manager of a marijuana store in West Hollywood known as “Yellow House.” The indictment alleges that Yellow House had an ATM machine and credit card readers in the store to facilitate purchases. In a single month at Yellow House, customers allegedly spent more than $1.7 million on marijuana and THC-laced products.

    In a separate indictment, John C. Moreaux, 50, of Valencia, a former “Compassionate Caregivers” employee, was indicted for operating a second marijuana store in West Hollywood. In the indictment, Moreaux is alleged to have possessed a shotgun inside the West Hollywood marijuana store. The indictment further alleges that Moreaux has a prior felony conviction, and therefore cannot lawfully possess any firearms.

    A fourth indictment charges Ronald B. Naulls, 28, of Corona, who operated the “Healing Nations Collective” marijuana store in a shopping center in Corona since June 2006. During a nine-month period, the store allegedly conducted sales of more than $1.2 million.

    Under federal law, conspiracy to distribute marijuana carries a sentence of up to 40 years in prison, while a violation of the money-laundering statute carries a sentence of up to 20 years in prison.

    An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.

    These cases were investigated by the Drug Enforcement Administration, the Los Angeles Police Department, the City of Corona Police Department and the San Luis Obispo County Sheriff.


    Release No. 07-093
    Return to the 2007 Press Release Index