Sandra Emerson, Staff Writer
Created: 01/28/2012 06:06:01 AM PST

UPLAND – The City Council has not made a formal request for the League of California Cities’ assistance in the medical marijuana case pending in the state Supreme Court, but some inquiries have been made.

Councilman Ken Willis inquired about the League possibly getting involved in the case during a dinner on Jan. 19. City staff also made an inquiry, said City Manager Stephen Dunn.

“Basically, Upland was looking for help because it’s a big battle we’ve been funding, but realistically I don’t know what the League is going to respond or if they’ve responded to it,” Dunn said. “I understand it could potentially put the League in a predicament. There are a number of cities, particularly in Northern California, that do support medical marijuana.”

The League’s City Attorneys’ Department formed a Medical Marijuana Committee and will review the implications for cities pending the Supreme Court’s decision.

They will look at four cases that the Supreme Court recently decided to review, including Upland’s case involving G3 Holistic.

“Those cases will be reviewed by the legal advocacy committee and those committees will determine what action is taken,” said Eva Spiegel, spokeswoman for the League.

Dunn said there is no plan to make an official outreach to the League.

“I think the intent of staff and the intent of Councilman Willis is to say, `Hey, League, make it high on your radar and if you can help in the battle then please do,”‘ Dunn said. “We’re not asking them to take on the battle.”

As of November, the city has spent more than $360,000 to fight medical marijuana dispensaries, said Councilman Gino Filippi.

“I continue to remain concerned with the amount of financial resources and attorney’s fees the city of Upland continues to incur in dealing with lawsuits including medical marijuana dispensaries operating in the city, when our general funds are needed for the operation of general services that the city provides to our citizens,” he said.

G3 Holistic closed in September 2010 after West Valley Superior Court Judge Barry Plotkin in Rancho Cucamonga granted the city an injunction.

To read entire story, click here.

Sunday, January 22, 2012 – 09:30 p.m.

Upland’s finance are heading in the wrong direction fast.

One major factor?

Legal fees!

Contract City Attorney William Curley and his firm Brea-based Richards Watson and Gershon have been drilling the city for years, and it doesn’t appear to be letting up anytime soon.

Upland, a city currently operating in a deficit mode, is now spending millions annually on a smattering of legal items.

The downside of a city council unable to keep its law firm in check.

Curley appears to be leading Mayor Ray “I run the city” Musser and the rest of the city council, around by the nose.

The city has spent countless millions on shit-ass legal advice that hasn’t panned out as planned.

And now the city is saying it has no idea how much it will dole out to Curley and company in the current budget year.

The only people to pay for this lack of leadership is the city’s residents.

Insiders report the council has wanted to issue a request for proposal for a new legal services provider for some time now.

Maybe it’s time to get it done.

Sandra Emerson, Staff Writer
Created: 01/21/2012 05:12:56 PM PST

UPLAND – The city may expect another budget deficit in the next fiscal year, with expenditures continuing to grow more quickly than revenues, according to estimates by City Manager Stephen Dunn.

Dunn outlined several of the city’s challenges in 2012 during a special City Council meeting Saturday at the Carnegie Library.

Dunn estimated revenue increases to be $2.3 million, with $2.75 million in expenditure increases, resulting in a $430,000 deficit for the 2012-13 fiscal year.

However, Dunn said the revenue projections may be realistically the gap could be closer to $1 million

“Next fiscal year we’re seeing a $430,000 deficit and we haven’t done anything yet and again that is very impressive revenue projections,” Dunn said. “The deficit is probably closer to $1 million.”

The city’s total revenues are $93.6 million, with $36 million in general fund money.

The increases in revenues include property and sales tax, a gain of about $800,000 from the elimination of the Redevelopment Agency on Feb. 1 and a 10 percent increase in remaining general funds.

Payroll costs will increase by $1.6 million, of which $1.1 million is attributed to the contract with the Police Association. The rest is in pension costs.

“So we have a lot of challenges here and as I said went over fact that the expenses are going to out pace revenues for the next few years,” Dunn said. “We do have obligations from our police group and we have other groups we’re in negotiations with and I will say it’s common knowledge that those groups are all looking at what the police got and saying ‘you had the money for them why don’t you have the money for us?’ And that’s a very valid argument.”

The general fund will absorb $1.1 million in personnel costs previously funded by the Redevelopment Agency, which will be dissolved on Feb. 1.

Dunn also included a possible $50,000 in increased utility costs if Southern California Edison raises its rats by 5 percent.

Legal costs, other post employment benefits for retirees and vehicle replacement costs are expected to go up by an unknown amount.

“The good part I see about this is we’re recognizing these problems. We’re not burying our heads in the sand and saying everything is great and not doing certain things,” said Councilman Brendan Brandt. “We’ve already taken reorganization plans and the city manager has also laid out some not rosy scenarios for us, but I think they’re what I’d call realistic scenarios for us and I look forward to the next year and I do see an end to some of the litigation.”

The city will lose $12.8 million in Redevelopment funding when the Redevelopment Agency is dissolved.

To read entire story, click here.

RANCHO CUCAMONGA – G3 Holistic in Upland will be able to remain open.

A West Valley Superior Court judge ruled in favor of the medical marijuana cooperative because the case is under review by the California Supreme Court.

“This is a big win,” G3 President Aaron Sandusky said.

Judge Barry Plotkin issued a tentative ruling in favor of G3 and officially adopted it after hearing arguments from counsel representing the city.

“In the long run, this is a good thing. For the citizens of Upland, it’s painful at the moment, but in the long run, we will have more guidance,” Plotkin said.

On Jan. 6, the city of Upland took the co-op to court on the belief they were open in violation of an injunction granted in August 2010 by the West Valley court in Rancho Cucamonga.

The city’s zoning ordinance prohibits medical marijuana dispensaries.

G3 appealed the injunction to the Fourth District Court of Appeals in Riverside. The Appellate Court in June granted a stay on the injunction allowing G3 to remain open pending the resolution of the appeal.

To read entire story, click here.

A lower court’s ruling upholding Riverside’s ban has been used as precedent for other cities to control medical marijuana

BY RICHARD K. De ATLEY
STAFF WRITER
rdeatley@pe.com

Published: 18 January 2012 03:51 PM

The California Supreme Court will review a city of Riverside medical marijuana case in which a lower court ruled that cities and counties have the right to ban dispensaries.

Local governments throughout the state have used that decision, issued in November by the Fourth District Court of Appeal, to shut down medical marijuana clinics within their boundaries.

That court ruled that nothing in the state’s1996 Compassionate Use Act (Prop. 215) or the state Legislature’s Medical Marijuana Program, which outlines usage, pre-empts cities from banning the facilities.

The Riverside ruling was one of four medical marijuana cases the State Supreme Court voted to accept Wednesday. In hearing the cases, the court will try to tackle federal and state issues regarding medical marijuana and the dispensaries that sell it, and also address more fundamental questions of local control.

The court voted 7-0 to hear the Riverside case.

The justices also will hear an unpublished ruling on Upland’s dispensary ban, which closely followed the language of the Riverside ruling; a Long Beach case that addresses the illegality of marijuana under federal law and whether that preempts local officials from regulating dispensaries; and a Dana Point case that looks into who has standing to challenge local ordinances regulating dispensaries.

“It was only a matter of time before the California Supreme Court would take on the issue, and the time is now,” said Jeffrey V. Dunn, an Irvine-based attorney with Best Best & Krieger who represents Riverside in the case. “Federal pre-emption, state law pre-emption and standing — in one day the Supreme Court has decided to review this law in a comprehensive fashion.”

Riverside City Attorney Greg Priamos said he believed the court recognized the importance of the cases and wants to clarify the law.

“We remain cautiously optimistic that the Supreme Court will uphold the city and county land use authority; that cities and boards of supervisors have the right to establish land-use policies, and the city’s right is not preempted by state law,” Priamos said.

J. David Nick, the attorney representing dispensary owners in Riverside, said a unanimous vote to hear a case is rare. He also noted that the court took the case even though there are no conflicting appellate decisions on the issue regarding the Riverside case.

To read entire story, click here.

UPLAND – The California Supreme Court decided on Wednesday to review an appeal filed by an Upland medical marijuana cooperative.

Counsel representing G3 Holistic in Upland filed the appeal in December following a decision in November by the Fourth District Appellate Court in Riverside siding with the city’s ban on medical marijuana dispensaries through its zoning code.

“I’m totally flabbergasted,” said Roger Jon Diamond, attorney for G3. “I thought they might take it, but you never know for sure.”

The co-op appealed an injunction granted by the West Valley Superior Court in August 2010 that shut it down along with several other co-ops in the city.

The city’s zoning ordinance prohibits medical marijuana dispensaries.

The Appellate Court granted a stay on the injunction in June pending resolution of the appeal, allowing G3 to remain open.

The Appellate Court ultimately sided with the city on Nov. 9, which prompted Diamond to file the appeal with the Supreme Court in December.

G3 closed following a raid by DEA agents on Nov. 1. It reopened on Dec. 30.

The city and G3 are currently in disagreement over whether the stay granted by the Appellate Court allows the co-op to remain open.

Diamond argued that the stay is still in effect because the case is still pending on appeal.

However, the city contends the Appellate Court’s decision on the case vacated the stay.

The lawyers met in West Valley Superior Court on Jan. 6 to decide the issue, but Judge Barry Plotkin wanted further review of the Appellate Court’s decision as well as whether West Valley has jurisdiction.

They will reconvene today.

City Manager Stephen Dunn said the city will await today’s ruling by Plotkin.

To read entire story, click here.

Tuesday, January 17, 2012 – 06:00 p.m.

So much for that plea deal way back when!

Anthony Orlando Sanchez, 36, plead not guilty to extortion and bribery charges this afternoon in U.S. District Court in Riverside.

He will be held without bail due to the fact he fled the country for Honduras several months ago.

Sanchez, who is charged in an alleged corruption scheme involving former Upland Mayor John “J.P.” Pomierski, returned to the United States on Sunday and was taken into custody by U.S. Marshals.

A trial date of March 13 has been set.

Tuesday, January 17, 2012 – 4:00 p.m.

The attempt by the City of Upland to shutter a medical marijuana co-op fell flat last week.

Upland, in an awkward position, attempted to get the 4th District Court of Appeal in Riverside to lift a stay it imposed last year allowing G3 Holistic Inc. to remain open, even though the court’s decision in the city’s favor has been appealed to the California Supreme Court.

On January 13th, the court rejected Upland’s request to dissolve the stay because of jurisdiction.

A rejection likely due to the pending appeal filing.

One has to wonder what these poorly designed legal moves is costing the city.

Sunday, January 5, 2012 – 11:30 p.m.

A federal fugitive tied to the corruption case involving former Upland Mayor John “J.P.” Pomierski was taken into custody Sunday afternoon.

Anthony Orlando Sanchez was arrested by the United States Marshals Service at Los Angeles International Airport upon his re-entry into the U.S.

Sanchez, 36, fled the country after agreeing to a plea agreement with the U.S. Department of Justice over his involvement in an alleged bribery scheme involving Pomierski.

The deal would have left Sanchez a convicted felon and required the revocation of his California real estate brokers license.

Sanchez is being held without bail at the San Bernardino County Sheriff’s Department’s Central Detention Center in San Bernardino.

UPLAND – G3 Holistic will remain open, for now.

West Valley Superior Court Judge Barry Plotkin on Friday postponed his decision on whether or not the co-op can remain open until the California Supreme Court decides whether to review G3′s appeal.

They will meet again on the issue Jan. 19 after the appellate court’s decision is reviewed by legal researchers. They will also determine if the court has the proper jurisdiction to make the decision.

“I am happy to resolve it today, but I don’t think we can,” Plotkin said, after expressing a desire to rule in favor of the city.

Aaron Sandusky, president of G3, re-opened the co-op last week pending the decision by the Supreme Court.

The Fourth District Court of Appeals in Nov. 9 ruled in favor of Upland’s ban on dispensaries through its zoning ordinance.

Sandusky is appealing the decision to the state Supreme Court and expects to hear back by Feb. 8.

“Mr. Sandusky will clearly shut down if the Supreme Court denies to review his appeal, so why is the city spending so much money fighting over another 30 days?” G3′s attorney Roger Jon Diamond said.

G3 closed in August 2010 after the West Valley Superior Court granted the city a permanent injunction.

To read entire story, click here.

UPLAND – A week later: It’s still open.

Medical marijuana collective G3 Holistics Inc. continues to be open for business, but it may not be so for long.

The collective at Suite F4 at 1710 W. Foothill Blvd. has been keeping regular hours from 8 a.m. to 9 p.m. daily since reopening last Friday.

But on Thursday, attorneys for the city served papers saying they want to shut down G3, said Roger Jon Diamond, who represents the cooperative in its efforts to remain open in Upland.

The case is scheduled to be heard at 8:30 this morning in Department R9 in West Valley Superior Court in Rancho Cucamonga, Diamond said.

“We say the city is wasting tax money because if the (state) Supreme Court denies our petition for review the appeal would be over at that time,” Diamond said. “So why not wait for Supreme Court to act?”

On Nov. 9, a judgment by the Fourth District Court of Appeals in Riverside determined Upland’s banning of the collective did not contradict Proposition 215, the 1996 law that approved medical marijuana in the state, nor Senate Bill 420, which details the amount of marijuana a person can possess for medical purposes.

Collective president Aaron Sandusky and Diamond said their appeal of the the Upland case to the Supreme Court could be heard in February.

Sandusky said he believes G3 Holistics was able to reopen in Upland because he had filed a stay against the injunction obtained by Upland,

“The point is if the state Supreme Court says no to us, (Sandusky) closes,” Diamond said on Thursday. “So shouldn’t we wait for the Supreme Court to act? That’s the question. There’s no emergency that requires immediate action. We dispute the stay dissolved. The stay of appeal lasts until the Supreme Court acts in this case.”

To read entire story, click here.

Wes Woods II and Sandra Emerson, Staff writers
Created: 01/04/2012 09:44:49 AM PST

UPLAND – Medical marijuana collective G3 Holistics Inc. remains open for business.

The collective at Suite F4 at 1710 W. Foothill Blvd. reopened at Friday afternoon, said Aaron Sandusky, president of G3 Holistics, and is keeping regular hours of 8 a.m. to 9 p.m. daily.

“The neighborhood has been very supportive,” Sandusky said on Tuesday. “Even those who don’t use (the medical pot) give us words of encouragement.”

It is Sandusky’s interpretation that he is able to reopen because he had filed a stay against an injunction obtained by Upland and is appealing the city’s prohibitions of medical marijuana dispensaries.

Upland Police Chief Jeff Mendenhall referred a reporter on Tuesday to City Hall for a comment.

“The city is working with the city attorney to identify the city’s options,” said Stephanie Mendenhall, the administrative services director on Tuesday.

G3 Collective opened in Upland in 2009 and closed in August 2010 after the city filed an injunction in West Valley Superior Court in Rancho Cucamonga.

During the closure, G3 opened another facility in Moreno Valley at 12276 Perris Blvd., Suite B. The landlord was the same as the Upland facility.

In 2011, G3 opened a facility at 1231 E. Washington St., Suite D in Colton.

Sandusky filed a stay against the Upland injunction and is appealing the city’s prohibitions of medical marijuana dispensaries.

A Drug Enforcement Administration raid in November closed G3. A warrant said between January and August, the total deposits to G3 accounts were more than $3.3 million while total debits were more than $3.2 million.

To read entire story, click here.

Quincey

Sandra Emerson, Inland Valley Daily Bulletin
Created: 01/03/2012 11:44:27 AM PST

UPLAND – Former City Manager Robb Quincey must resolve his disputes with the city through arbitration.

The city recently rejected a claim filed by Quincey in November seeking unlimited damages as a result of his termination in May.

Quincey’s attorney Joseph Wohrle filed a petition last week with the West Valley Superior Court in Rancho Cucamonga seeking arbitration in accordance with his employment contract. The petition requests the court appoint an arbitrator.

“What we want is for the city to honor its duly authorized contract commitment and be held accountable for its illegal actions and those of (Mayor Ray) Musser and (Councilman Ken) Willis,” Wohrle said.

In his claim, Quincey accuses the city of wrongful termination and violating labor codes. He also accuses Musser and Willis of defamation.

To read entire story, click here.

Sandra Emerson, Inland Valley Daily Bulletin
Created: 12/30/2011 12:17:57 PM PST

UPLAND – The city experienced a number of controversies in 2011 and will continue to deal with some of the legal ramifications in 2012.

Former Mayor John Pomierski’s federal trial is set for April, which may occur during the city election when the mayor’s seat and a council seat is up for re-election.

“Well I hope all those things all come to pass and are resolved,” said Councilman Ken Willis, who will be retiring from the council in November. “I think that if there’s a trial going on in the course of the election all the scabs will be scraped open and painful for a lot of people.”

Pomierski was indicted on federal corruption charges in March.

His co-defendant, Upland contractor John Hennes, has pleaded guilty as part of a plea agreement.

The city will be addressing existing litigation involving Pomierski as well as a potential lawsuit.

Pomierski’s civil attorney, Robert Schauer, filed a claim with the city last week demanding they defend him in a lawsuit filed by the owners of the former Chronic Cantina restaurant and bar.

Schauer said he will sue if the city does not agree to provide his legal defense.

The restaurant owners are suing the city for million of dollars in damages, accusing Pomierski and Hennes of extorting money from them. The owners allegedly paid the men $15,000, but when they did not pay an additional $25,000, the city revoked their conditional use permit.

The City Council revoked the permit in April 2009 due to an alleged increase in crime.

To read entire story, click here.

Adams

Sandra Emerson, Inland Valley Daily Bulletin
Created: 12/27/2011 10:24:01 AM PST

UPLAND – Former Police Chief Steve Adams is no longer being accused of extortion by operators of a closed restaurant.

Adams was dismissed from Chronic Cantina’s civil case against the city earlier this month.

The restaurant owners filed the lawsuit against the city in April in West Valley Superior Court in Rancho Cucamonga. They accused former Mayor John Pomierski and contractor John Hennes of extorting money from them.

Adams was accused along with Pomierski and Hennes, but the owners dropped the former police chief from the case earlier this month, according to court records.

In the lawsuit, the owners – Dan Biello and Keith Scheinberg – said they paid Pomierski and Hennes $15,000, but the city revoked their conditional- use permit when they did not pay an additional $25,000.

Council members revoked the permit in April 2009, citing an increase in crime at the restaurant and bar.

Pomierski’s attorney, Robert Schauer, filed a claim with the city last week demanding that they defend Pomierski in the case according to government code. He said he will file a lawsuit if the city does not agree to defend him in the case.

The city hired a third-party private investigator to look into accusations made in the lawsuit against Adams.

To read entire story, click here.

Aaron Sandusky, president of the now closed medical marijuana co-op G3 Holistic, speaks to the Upland Rotary Wednesday, December 21, 2011, at the Landecena Community Center in Upland. (Jennifer Cappuccio Maher, Staff Photographer)

Sandra Emerson, Inland Valley Daily Bulletin
Created: 12/27/2011 10:12:57 AM PST

UPLAND — Aaron Sandusky has found another way to fill his time while his medical marijuana cooperative is no longer open for business.

Sandusky, president of G3 Holistic in Upland, has gone on a speaking circuit at various clubs and groups in the community.

“I need to get in front of all these people. It’s important obviously to spread the message and at least tell my story because they need to hear it,” Sandusky said.

Sandusky has spoken to other co-op owners, has spoken at City Halls and plans to speak to a group of doctors and other clubs.

He spoke on last Wednesday to the Upland Rotary club. Bob Redick, club president, noted that Rotary’s motto is “Peace through understanding.”

“We believe in understanding viewpoints,” Redick said. “We’re non-denominational. We embrace all faiths and we like to hear viewpoints especially when articulated in a sensible manner, so that we are much more interested in being informed than we are being political.”

Federal agents on Nov. 1 raided an Upland location and five others associated with Sandusky, whom they believe are illegally selling marijuana to the general public. The Drug Enforcement Administration, aided by sheriff’s deputies and police, searched the six locations connected with Sandusky and John Nuckolls, the president and chief financial officer, respectively, of medical marijuana dispensaries in Upland, Colton and Moreno Valley.

G3 was shut down in September 2010 after Upland filed an injunction in West Valley Superior Court in Rancho Cucamonga.

G3 appealed the injunction in the Fourth District Court of Appeals, which allowed the co-op to remain open until its case was heard.

However, last month the court ruled in favor of the city’s ban on dispensaries through a zoning ordinance.

Sandusky filed an appeal in the state Supreme Court and is still waiting to hear if the court will take on the case.

The city has spent more than $300,000 on litigation involving medical marijuana cooperatives since August. Upland has spent more than $208,000 fighting G3.

To read entire story, click here.

Pomierski

Sandra Emerson, Staff Writer
Created: 12/22/2011 06:24:24 PM PST

Special Section: Upland Watch

UPLAND – Former Mayor John Pomierski may file a lawsuit against the city for refusing to represent him in a civil suit filed by the former Chronic Cantina restaurant and bar.

A claim was filed with the city this week by Pomierski’s civil attorney, Robert Schauer, demanding the city represent Pomierski or face a lawsuit seeking attorney’s fees and other damages.

“I’m upset with the city for not defending him when they have an obligation to do so,” Schauer said.

City Manager Stephen Dunn said the city has yet to review the claim, but the city attorney will evaluate the claim and discuss it with the City Council during its meeting on Jan. 9.

The claim states that the city is required to represent Pomierski based on state Government Code 995, which states, “a public entity shall provide for the defense of any civil action or proceeding brought against him, in his official or individual capacity or both, on account of an act or omission in the scope of his employment as an employee of the public entity.”

Schauer first asked the city to represent Pomierski in July.

The owners of the Chronic Cantina filed the lawsuit against the city as well as Pomierski in April in West Valley Superior Court.

They accuse Pomierski, Upland contractor John Hennes and former Upland Police Chief Steve Adams of extorting money
from them.

To read entire story, click here.

NBA Champion James Worthy asks Quran Clayton, 3, of Rancho Cucamonga what he wants for Christmas Saturday during the 4th Annual Colonies Holiday Miracles event at the Colonies Crossroads shopping center in Upland. (James Carbone/Correspondent)

Mike Cruz, Staff Writer
Created: 12/17/2011 04:54:29 PM PST

UPLAND – More than 100 children from low-income families were treated to a $200 shopping spree and much more as part of the 4th Annual Colonies Holiday Miracles event at the Colonies Crossroads Shopping Center.

Hundreds of volunteers and community members braved blustery winds and chilly early-morning temperatures Saturday to brighten the Christmas holiday for the children and their families.

Each child was given the $200 shopping spree at Kohl’s and Dicks Sporting Goods – which really amounted to between $240-250 thanks to discounts offered by the retailers. They also received breakfast, took pictures with Santa Claus, and were given a full holiday dinner from Albertsons.

An additional 100 families also received a holiday meals that were sponsored by Upland-based developer Colonies Partners.

Rancho Cucamonga resident Debbie Amaya brought her daughter Desiree, 10, and 9-year-old son, Daniel, to the event and enjoyed seeing the community come together for families during the holidays.

“I think it’s a priviledge and a blessing that the kids were able to come out here,” Amaya said.

Santa arrived on an Upland Fire truck to a round cheers. Firefighters and police officers from several local departments accompanied the children and volunteers as they shopped.

With big shopping bags in hand, the children and their adult volunteers left the stores with wide smiles. Seventeen-year-old Sarina Garcia, of Alta Loma, said she enjoyed shopping for clothes with Upland firefighter John Hurt.

The children who participated in the event are from the non-profit Hope Through Housing Foundation, which was created by non-profit affordable housing developer National Community Renaissance (National CORE) to provide services to children and senior citizens.

Each child was chosen based on family need and income.

To read entire story, click here.

Sandra Emerson, Inland Valley Daily Bulletin
Created: 12/06/2011 12:05:33 PM PST

UPLAND – An Upland contractor who was named in an 11-count indictment along with former Mayor John Pomierski has pleaded guilty to two of the four counts against him.

John Hennes, owner of J.H. Builders, has changed his plea to guilty as part of a sealed plea agreement regarding one count of conspiracy to commit bribery and making false statements to federal agents.

He is scheduled to be sentenced on June 25.

“He offered to cooperate. He offered to talk to the government even before he was arrested and charged,” said Hennes’ attorney, Kenneth White. “Now he’s come forward, and he’s going to tell the truth to the government and the court and try to make this right.”

Hennes and Pomierski were indicted on March 2 on federal corruption charges that outline an extortion scheme targeting two Upland businesses, including the Chronic Cantina bar and restaurant.

They both pleaded not guilty on March 3.

White said Hennes decided to change his plea to guilty in order to take responsibility for what he did and be a stand-up guy.

“Mr. Hennes is somebody who has been a respected contractor in the community out there for many years,” White said. “He’s a hard-working guy. He raised two kids on his own. He is very actively involved in charity and church and the soccer league.”

The two remaining counts include conspiracy and extortion.

“As part of the agreement what’s typical in federal court is that the remaining charges will be dropped at the time of sentencing,” White said.

White said Hennes’ potential sentence is complex and based on several factor that haven’t happened yet.

To read entire story, click here.

Sandra Emerson, Staff Writer
Created: 12/03/2011 10:18:05 PM PST

UPLAND – Displaced patients from the now-closed G3 Holistic cooperative still have a place in town to go for their medical marijuana.

Upland Hidden Garden is open and serving patients with valid medical marijuana cards, despite an appellate court decision last month ruling in favor of the city’s ordinance banning dispensaries.

Upland Police Chief Jeff Mendenhall said the Police Department turned over investigation of the cooperative to the U.S. Attorney’s Office and the federal Drug Enforcement Administration.

“We are assisting the U.S. Attorney’s Office and the DEA with anything that we can,” he said.

A man who identified himself as the owner of Upland Hidden Garden on Foothill Boulevard declined to comment.

Through August, the city had spent more than $208,000 on litigation involving G3 Holistic and more than $300,000 on litigation involving all the medical marijuana cooperatives that operated in the city, said City Manager Stephen Dunn.

G3 Holistic and other cooperatives in the city closed in September 2010 after the city filed an injunction in West Valley Superior Court in Rancho Cucamonga.

Aaron Sandusky, president of G3, filed a stay on the injunction and appealed the city’s prohibition of dispensaries in the appellate court in Riverside.

Last month, the court ruled in favor of the city’s ordinance and upheld the injunction.

Sandusky plans to appeal the decision to the California Supreme Court.

The city is aware of the newest co-op, but does not want to incur more legal fees in attempting to shut it down, Dunn said.

The city is hoping a letter from the U.S. Attorney’s Office sent to various property owners who lease to medical marijuana cooperatives will assist the city in getting the co-op closed.

“We’re kind of choosing that `wait and see’ right at the moment, only because it’s going to cost us tens of thousands of dollars to go after them legally,” Dunn said.

The day before the case was argued in court, G3′s three cooperatives in Upland, Colton and Moreno Valley as well as a warehouse in Ontario were raided by DEA agents.

Tom Mitchell, chairman of the City Council Advisory Committee, is the leasing agent for the property owner of the KB Foothill Center, but he said he backed out of the lease agreement with Upland Hidden Garden when he learned it was a medical marijuana cooperative.

“At that point I said, `well, then I’m not going to be part of this,”‘ he said.

The co-op approached the property owner as a “chronic pain clinic,” Mitchell said.

Realizing it could actually be a medical marijuana co-op, Mitchell drafted two lease agreements and met with the property owner and the co-op owners.

To read entire story, click here.

San Bernardino County District Attorney Michael Ramos

By Mark Gutglueck
Friday, December 2, 2011

Federal prosecutors have horned in on an unprecedented number of high profile political corruption cases that would otherwise be handled by the district attorney’s office in San Bernardino County. In some matters, the U.S. Attorney’s Office has wrested from district attorney Mike Ramos prosecutorial authority or has opened with the FBI parallel investigations into issues Ramos or the San Bernardino County Grand Jury have delved into without reaching a successful conclusion. In at least three matters, federal prosecutors and investigators have taken on probes or investigations of elected officials or political donors with whom Ramos was politically aligned.

In total, five matters in which current or former elected officials are alleged or suspected to have engaged in bribery or some other form of wrongdoing are being prosecuted by the U.S. Attorney or being reviewed for their prosecutorial potential by the FBI.

The U.S. Attorney’s Office in February and March 2011 obtained from a federal grand jury indictments in the Upland corruption case, in which former mayor John Pomierski, his appointee to the Upland Housing Authority, John Hennes, and their associates Anthony Orlando Sanchez and Jason Roy Crebs have been charged with participation in a bribery and extortion scheme allegedly involving using Pomierski’s authority at City Hall to shake down businessman with permit applications pending before the city. Pomierski and Ramos were political allies. Ramos endorsed Pomierski in his successful runs for mayor in 2004 and 2008. In 2010, Pomierski endorsed Ramos in his run for reelection for district attorney. Two days after Ramos held back two challengers in the June 8, 2010 election, the FBI and IRS served search warrants at Pomierski’s home and at Upland City Hall, seizing documents and other evidence used to convince a federal grand jury in Los Angeles to indict him a little less than nine months later. Part of the formula Pomierski and Hennes were allegedly able to apply in extorting money from their victims was the claim that Pomierski functioned under an umbrella of protection provided by the district attorney’s office. And indeed, Pomierski had enjoyed an uncommon degree of tolerance from San Bernardino County’s highest law enforcement authority in perpetuating his alleged depredations. Despite widespread whisperings heard as early as 2006 that Pomierski was on the take, Ramos went out of his way to endorse him in his electoral effort against councilman Ray Musser in 2008.

In addition to accusations that Ramos deliberately obstructed justice in curtailing the investigative and prosecutorial processes from running their course with regard to his political ally Pomierski, there is further information to suggest that Ramos acted to prevent the wheels of justice from churning through several top county officials who had been accused of bastardizing the function of the county hospital, which is intended to provide care for the county’s indigent population. Located in Colton and known as Arrowhead Regional Medical Center, the county hospital has allegedly been exploited by current and former hospital officials for their own personal and financial benefit, as well as by elected officials, who used their position of authority over the hospital’s administrators to obtain free medical care.

As early as 2007, Ramos, his public integrity unit and the grand jury were informed of a circumstance which involved the city of Colton in a highly questionable acquisition of an eleven acre parcel from Retail Development Group, an outfit owned by Gary Schafer. The $3.65 million purchase was championed by then-Colton assistant city manager Mark Nuaimi, who justified the acquisition as a strategic move that would satisfy the U.S. Fish & Wildlife’s requirements that habitat for the endangered Delhi Sands Flower Loving fly be preserved, and thereby allow other development in the area to proceed. But the property Colton acquired from Schafer was not prime Delhi fly habitat. Nor did the city do an adequate appraisal of the property, as was legally required, and instead, Nuaimi substituted a $3.8 million offer on the property, which was of unsubstantiated provenance, as justification for the sum paid. It would later turn out that the property was coveted by Dr. Dev GnanaDev, Arrowhead Regional’s medical director, who was looking to have the city of Colton write down the cost of the property and sell it to him so he could house his own surgical group’s operations there.

Dr. GnanaDev, who in addition to being the medical director at Arrowhead Regional, owns and controls Arrowhead Regional Surgical Group, Inc., with which the county hospital has a $1.343 million annual contract for the provision of administrative, supervision, secretarial and directorship services for the hospital’s general surgery division, including the trauma, otolarynology, burn surgery, oral surgery, neurological surgery, plastic surgery, opthalmologic surgery and transplant surgery departments.

GnanaDev’s actions in his capacities as both medical director and provider of service to the hospital, like his involvement in the questionable land deal involving the city of Colton and Schafer, was widely perceived by doctors working at the hospital as improper, involving a conflict of interest they felt compromised the quality of medical care and patient safety at the institution. Like the land deal, that conflict became the subject of complaints to the district attorney’s office’s public integrity unit and the county grand jury.

According to doctors and other staff members at the hospital, Dr. GnanaDev not only wrote the contract for his own surgical group, he has his own medical billing company which he utilizes to divert large amounts of money from the operations at the institution into his own accounts. Some of those doctors maintain that GnanaDev improperly used his status as medical director and his domination of the man who is supposed to oversee his function for the county, Arrowhead Regional executive director Patrick Petre, to punish doctors who refuse to use his billing company by having those doctors’ contracts with the hospital terminated.

Doctors and other medical professionals allege that in his rush to enrich himself, GnanaDev compromised the quality of care, and his policies resulted in scores of lapses in professionalism and medicine jeopardizing the well being of the patients at the facility. On multiple occasions, that negligence and malpractice resulted in severe injury and death, they say.

A report consisting of a “stack” of 40 to 50 cases was prepared by several doctors at Arrowhead Regional and delivered to Petre, in which specific acts of medical malpractice involving the action of several doctors including those in the obstetrician unit and Dr Guillermo Valenzuela, the head of the ObGyn department, were alleged. Petre then turned the information over to Dr. GnanaDev, who, according to several doctors, attacked the doctors who had prepared the report. At least four of the cases involved patient deaths. After Petre took the matter no further, several of the doctors went to the district attorney’s office and the grand jury with the report.

Those doctors were frustrated in their quest, however, when the district attorney’s office and the grand jury, which is advised by a prosecutor from the district attorney’s office, took no action.

Doctors and other professionals at the hospital have pointed out that Dr. GnanaDev uses some of the proceeds from his business and work for lobbying and making sizeable contributions both directly and through others to members of the board of supervisors as a means of compromising them.

According to Arrowhead Regional personnel, high ranking county officials, including members of the board of supervisors and former county administrative officer Mark Uffer, who prior to being elevated to the senior administrative position in the county had served as the hospital director, received treatment at the hospital to which they should not have been entitled. Both Petre and GnanaDev facilitated this or allowed it to take place to ingratiate themselves with the county’s decision makers and benefit themselves and the institution, those doctors alleged.

According to those doctors, GnanaDev bent or broke hospital rules, protocol and the law when he provided free care to former supervisor Paul Biane, current board of supervisors chairwoman Josie Gonzales and Uffer and at least one other member of Uffer’s family. In addition, those doctors have alleged, GnanaDev instructed hospital personnel to generate no records with regard to this specialized treatment and no bills were sent. The treatment included MRIs and surgeries, the doctors said.

According to doctors, GnanaDev, who was president of the California Medical Association from October 2008 to October 2009, arranged to have Petre remove a clause from the contracts of full time physicians working at Arrowhead Regional which prohibited those doctors from working at other hospitals. While president of the California Medical Association, Dr. GnanaDev maintained his role as medical director and chief of surgery while spending no more than three to four days per month at the hospital, those doctors said. He delegated very few of his responsibilities to others, physicians reported, reducing oversight of the doctors working at Arrowhead Regional to a dangerously low level.

By allowing a large number of the physicians who were the heads of the various medical groups at Arrowhead Regional to work at other sites, doctors report, GnanaDev facilitated them in receiving hospital subsidy money directly. Those heads of the individual groups were then able to pay lesser-experienced physicians who work for them bottom dollar for their services, increasing the profitability of the head physicians, the doctors reported to the grand jury and district attorney, leading to an absence of physician presence and an absence of quality physicians at the county hospital. In this way, the doctors alleged, GnanaDev had shirked his responsibility as medical director to audit the work of the groups the hospital contracts with to ensure the hospital’s operating funds are properly dispersed and that the hospital was getting the quality of care taxpayers were paying for. This has led to a situation at Arrowhead Regional, the doctors alleged, where it is common for respiratory therapists, nurses, and other personnel to function like physicians throughout the hospital, practicing, on a daily basis medicine without a license. In some cases, the doctors charged, the unlicensed staff members were teaching the student and resident physicians how to take care of patients.

It was also alleged that Dr. GnanaDev allowed the doctors employed by his surgical group to monopolize most of Arrowhead Regional’s 19 operating suites, such that a large backlog of orthopedic and urology patients developed, so they had to wait months for their surgeries. This led to the state citing the hospital for the backlog of orthopedic patients awaiting surgery.

Doctors who complained to the district attorney and grand jury about GnanaDev were also critical of his policy of accepting all trauma patients even though Arrowhead is not equipped to handle pediatric and major chest trauma. Doctors said they had witnessed incidents in which Dr. GnanaDev, who is recognized as a surgeon of considerable skill, perform surgeries on children less than two years of age using adult laparoscopic equipment and on other occasions using adult equipment on very small children. Doctors said that GnanaDev resisted transferring pediatric patients to other hospitals that were better equipped to operate on them because he was seeking to enhance the earnings of his own surgical group. Having pediatric patients in Arrowhead Regional’s intensive care unit in many cases resulted in injury or damage to patients through improper management and improper care, doctors reported, and in some cases children with severe brain injuries or other trauma who were improperly treated at Arrowhead died.

Between 2004 and 2010, at least 95 complaints pertaining to Arrowhead Regional were filed with state regulators, of which 28 were determined to be substantiated.

Jorge Valencia, the official spokesperson for Arrowhead Regional, said attacks on Dr. GnanaDev alleging he puts profit above safety, utilizes equipment that is not suitable for the operations he or others are performing or does not adhere to professional medical standards are unfounded. Reports that GnanaDev is involved in any form of conflict of interest or being investigated along those lines is also inaccurate, Valencia asserted. Valencia further denied any relationship between Arrowhead Regional and GnanaDev’s billing company. And though Valencia did not dispute that a number of deaths had occurred at the county hospital, he insisted that “concerns regarding patient care are handled by the medical staff through the peer review process. He said that the review was “comprehensive” and “governed by the bylaws of the medical staff and various other rules and regulations.”

But in the perception of many of the medical professionals working under GnanaDev, there had been inexcusable deviations from medical standards driven by the profit motive that had resulted in deaths and injuries and crossed the line into criminal conduct.

It is believed by at least some of those knowledgeable about the situation that Ramos was reluctant to act with regard to these issues because one of those implicated in the scandal at Arrowhead Regional is supervisor Josie Gonzales, a key Ramos supporter on the board of supervisors.

In the late winter of 2010, after the San Bernardino County district attorney’s office had failed to take action on the matter, doctors approached the FBI, passing along much of the same information to the federal agents that had been provided to the district attorney’s office and the grand jury. On November 4, 2010, a team of FBI agents, armed with search warrants, swooped down upon the county hospital, seizing documents relating to its operation and GnanaDev’s role in overseeing the 456-bed facility, in particular.

As of this week, no charges have been filed in that matter.

In November 2006, after litigation between the Rancho Cucamonga-based development company Colonies Partners and the county over flood control issues at the company’s Colonies at San Antonio development in Upland had dragged on for four years, a three member majority of the board of supervisors – then supervisors Bill Postmus and Paul Biane and supervisor Gary Ovitt – voted to settle the case by conferring a $102 million payment on the company.

More than three years later, in February 2010, the district attorney’s office joined with the California attorney general’s office in obtaining an indictment against Postmus and his one-time political associate, Jim Erwin, which alleged a criminal conspiracy involving an effort by Colonies Partners’ managing principals Jeff Burum and Dan Richards to first extort Postmus and Biane, and then bribe them to obtain the settlement. Prosecutors alleged that Ovitt’s chief of staff, Mark Kirk, was also bribed. While Postmus and Erwin were criminally charged, Burum, Richards, Kirk, Biane and the Colonies Partners’ public relations consultant, Patrick O’Reilly, were identified as unnamed and unindicted co-conspirators.

In May of this year, less than two months after Postmus pleaded guilty as charged and then testified in April and early May along with 44 others before a specially-impaneled grand jury, Burum, Kirk, and Biane were indicted, along with Erwin, who was reindicted. That indictment alleged that separate $100,000 contributions Burum and Richards made in 2007 to each of three political action committees founded, controlled or secretly controlled by Erwin, Biane and Kirk were bribes, and two $50,000 contributions made to political action committees controlled by Postmus also constituted bribes made in return for the settlement vote. Burum, according to the indictment, had served as an aider and abettor in the delivery of the bribes.

At once, the timing of the indictments fell under question. The original case against Postmus and Erwin had not been filed for more than three years after the November 2006 vote. And the superseding indictment came nearly four-and-a-half years after the vote. A major technical legal issue in the case was the elapsing of the statute of limitations, an issue seized upon by the lawyer for Burum, former U.S. District Court Judge Stephen Larson, who pointed out in court papers that “the prosecution is improperly attempting to charge Mr. Burum under conspiracy and aider and abettor theories because the statute of limitations had run on direct charges of bribery,” which Larson pointed out, “if timely brought would not have been precluded under the allegations of this indictment.”

Thus, the more than four-year delay in obtaining the indictment against Burum appeared to be a trap door built into the charges that in time will bring about the collapse of the case.

While the district attorney’s office’s temporizing appeared inexplicable to many, an examination of Ramos’s campaign financing records provided a possible explanation of the delay which appeared to be a fatal flaw in the case. Burum, over the first six years Ramos was district attorney, was a major contributor to Ramos’s electioneering fund. On May 14, 2003, a little more than four months after Ramos became district attorney, one of Burum’s companies, Jeffrey Burum Enterprises, provided Ramos with a relatively modest $1,500. On September 10, 2003, Burum provided Ramos with another $1,000. On November 22, 2005, another of Burum’s companies, Diversified Pacific, donated $10,000 to Ramos’s political war chest. On July 13, 2007, Diversified Pacific endowed Ramos’s campaign fund with another $5,000. On May 27, 2008, Diversified Pacific provided Ramos with $7,000.

In addition, over the last eight years, the Colonies partners and Burum donated over $400,000 to the political action committee controlled by SEBA, the San Bernardino County Safety Employees Benefit Association, which serves as the union for San Bernardino County’s sheriff’s deputies and district attorney’s office investigators. In 2010, the SEBA PAC gave Ramos $42,947.41 toward his election effort that year.

Unwilling to simply allow Ramos’s office and the state attorney general to usher what was increasingly viewed as a flawed case through state courts, the U.S. Attorney’s Office in September obtained search warrants that targeted the offices and/or homes of Burum, Kirk, Biane, Erwin, and O’Reilly, as well as the home and office of former state assemblyman and state senator Jim Brulte, a Colonies Partners consultant whose aggressive lobbying of Postmus and Biane and other county officials in an effort to obtain the settlement had been overlooked by Ramos’s investigators. Those warrants were served on September 15, signaling that federal authorities are now second guessing the district attorney’s office and the state attorney general’s office with regard to the Colonies settlement case.

In Victorville, a series of actions widely characterized as mis- or malfeasance by public officials has garnered the attention of citizens for some time. In response to citizen complaints, the 2009-10 first took up a probe of that city’s handling of its finances, along with the mismanagement of an effort to build an electrical generating plant, the misapplication of sequestered project funds, securities fraud, and improprieties with regard to a foreign investment program. When the 2009-10 grand jury concluded its session without taking any action with regard to Victorville or delivering a report about its investigation, the 2010-11 grand jury took that matter up where its predecessor had left off. But at the conclusion of its term on June 30 of this year, the 2010-11 grand jury had not come to closure on any of the Victorville issues. Likewise, the district attorney’s public integrity unit, which had also been vectored into Victorville to look at the situation there, took no action. On October 31, 2011, Ted Burgnon, the foreman of the 2011-12 San Bernardino County Grand Jury, in writing informed Victorville city officials the current grand jury is extending the two-year running probe into city finances and actions.

Well before Burgnon’s announcement, however, it was known around Victorville City Hall that federal officials have taken an interest in reports of violations of the public trust that have allegedly occurred within its confines.
Victorville delayed for two years an audit pertaining to its 2007 operations, leading to suggestions that city officials were seeking to hide information that was embarrassing, incriminating or both. Upon release, that audit showed the city had mounting financial problems. Another audit, completed by the firm of Mayer Hoffman McCann and released in March of this year, indicated those problems had worsened, and its authors expressed “substantial doubt about the city’s ability to continue as a going concern.” According to Mayer Hoffman McCann, it uncovered tens of millions of dollars in internal loans that were never approved, three funds that were $180 million in the hole and dwindling cash reserves.

As of March 2011, Victorville’s utility fund was $78 million upside down, while cash in the water district had dropped from $15 million in 2009 to $8 million as of June 30, 2010 despite a $20 million loan made to the district from the Southern California Logistics Airport Authority, the entity that oversees the effort to convert the former George Air Force Base into a civilian airport.

City officials have now reluctantly acknowledged that Victorville has lost an amount approaching $200 million on two abandoned power plants, an outgrowth of the city’s effort to create an electrical utility division, the Victorville Municipal Power Authority.

The Foxborough power station, which the city initiated in 2004 as what was supposed to be a $22 million, 14-megawatt electrical generating plant that would bypass the state power grid to provide affordable energy to industrial users and thus attract employers to the city and spur economic growth, has cost the city a whopping $126 million without being completed. Mismanagement of the project came in multiple stages, first at the hands of community services director Richard Bunnell; then deputy city manager Doug Robertson; followed by Wayne Campbell, who was hired as the plant manager in 2005; and then Glen Casanova, who was hired to replace Campbell as municipal utilities director in 2007.

By October 2006 the price tag for the project had escalated to over $54 million.

Construction delays and changes in state law that mandated that at least 20 percent of all energy produced in California by 2010 come from renewable sources resulted in the city jettisoning earlier plans for gas-fired combustion turbines, the pricey components for which were already purchased, and substituting in even more costly generators capable of running on biodiesel. The unused original equipment had to be sold at a substantial loss.

In addition to the initial and then follow-on equipment acquisition and construction costs, the utility division in 2005 incurred an operating deficit for the plant of $4.5 million. That hemorrhaging of red ink increased each year thereafter such that it had reached an annual operating deficit of $8 million by fiscal 2007-08. By 2007, the city began borrowing from its general fund to shore up the project. The city council, as quietly as it could get away with, issued $90 million in bonds to cover the entire cost of Foxborough. By May 2008, all of the bond money had been eaten up by the Foxborough power plant project and another $5 million beyond that was consumed, bringing the total cost on the facility to $95 million even before the facility’s permanent turbines had begun to generate electricity. At that point the city abandoned its initial intention of having the plant bypass the state power grid and avoid the imposition of a ten percent energy delivery fee being tacked onto the price of the power. Instead, the project was then scheduled to be hooked up to the state power system, canceling in the process the delivery of low cost energy, which had been the justification for the project in the first place.

Seven years after the project was undertaken, the city has failed to see that project through to fruition and the city council abandoned it altogether, after having sunk $126 million into the project.

The city is currently in default on an $83 million bond for Foxborough.

The city was simultaneously pursuing the development of another, much larger power plant, dubbed Victorville 2. The city was assisted in developing that plant by Newport Beach-based Inland Energy, which had successfully developed the 830-megawatt High Desert Power Plant with Baltimore-based Constellation Energy Group a decade ago. The High Desert Power Plant is now referred to as Victorville 1. Inland Energy had also served as a consultant with regard to the development of the Foxborough plant.

In November 2007 the Victorville city council authorized a $173 million purchase of natural gas-fired turbines from General Electric for the 563-megawatt Victorville 2 plant.

The city, which owed $126 million to General Electric for equipment for the Victorville 2 power project, fell into arrears on its payments to General Electric and in May 2010, simply surrendered a $50 million deposit it had made with the company for components. The Victorville 2 project was originally scheduled to include a 513-megawatt natural gas-fired generating plant on 133 acres coupled with an adjohining 250-acre solar power field capable of producing 50 megawatts of electricity. The solar component of the project has since been entirely abandoned and the remainder of Victorville 2 shelved, although in recent months some discussion has taken place between the city and Massachusetts-based QGEN about that company taking on the completion of the project.

Robertson has since been promoted to Victorville city manager.

In the summer of 2010, the Securities and Exchange Commission opened an investigation focusing on Victorville’s issuance of bonds and how that bond funding was spent. In May of 2010, the board of supervisors acceded to a grand jury request that the county retain the forensic auditing firm of Kessler International to review the city’s finances. The board did so, authorizing $195,000 for that audit. Kessler has not said whether the audit is yet concluded.

In making his announcement on October 31, grand jury foreman Burgnon indicated the grand jury has retained the independent San Francisco-based auditing firm of Harvey M. Rose Associates to go over both the city’s books and those of the Victor Valley Economic Development Authority, a joint powers authority involving the county, Victorville, Apple Valley, Hesperia and Adelanto which is involved in the provision of infrastructure to support Southern California Logistics Airport. It is not clear to what extent the ground covered by Kessler will be revisited by Harvey M. Rose.

It is known is that more than $80 million of the $300 million in outstanding bonds floated specifically for airport operations actually funded city of Victorville operations or projects off Southern California Logistics Airport property, including $1.8 million utilized to acquire land for a city library. According to Mayer Hoffman McCann, at least $21.8 million was not spent in accordance with the bond covenants. Other airport money was used toward work on the Victorville 2 power plant. The city also loaned $20 million in 2007 airport bond proceeds to the water district to help build a wastewater treatment plant. Those expenditures were made without informing or getting the consent of the bonds’ insurer, Radian.

The Southern California Logistics Airport Authority (SCLAA) has accumulated debt of $102 million, twice the burden it had in 2009-10.

Mayer Hoffman McCann reported that Victorville officials have not properly documented and sought city council approval for the city’s numerous interfund loans. The city had nearly $90 million in outstanding interfund loans as of last June. But only $30 million in loans had been formally approved by the council, according to the audit report.

Another issue dogging Victorville is its now-dormant EB-5 program. The EB-5 program is a federal one that allows entities such as cities or redevelopment agencies to arrange for the provision of visas for foreigners who invest at least $500,000 in projects pre-qualified by the federal government. In April 2008, the city entered into a relationship with CMB Export, LLC to manage an EB-5 program for Victorville at and around Southern California Logistics Airport. The city, however, abrogated that contract in June 2008 and in December 2008 CMB filed a $33 million lawsuit against the city claiming breach of contract, fraud, unfair competition and business interference. CMB refiled the claim in February 2009, including charges of misrepresentation and fraud by former city manager Jon Roberts and former mayor Terry Caldwell.

In April 2010, the city settled that lawsuit with CMB for $200,000. The following month, however, the U.S. Citizenship and Immigration Service suspended Victorville’s EB-5 program, stating that city officials had misrepresented the projects to be funded by the investment program. It was the first time the federal government had moved to terminate an entity’s EB-5 authority.

The U.S. Attorney’s office, alarmed at the wholesale squandering of financial resources in Victorville’s municipal operations as well as blunders with regard to federal law governing securities and its foreign investment programs and further dismayed by the inability of the local district attorney’s office and grand jury to take action, leapt into the breach and has now assigned FBI agents to examine Victorville with a scrupulously mean eye.

On September 21, 2011 the FBI served as the lead agency in serving search warrants at the headquarters of the San Bernardino International Airport Authority [SBIAA] and the Inland Valley Development Authority [IVDA], the joint powers agencies involving the county and the cities of San Bernardino, Colton, Loma Linda and Highland in the conversion of the former Norton Air Force Base into a civilian airport and the redevelopment of the surrounding property. Warrants were also served at the offices of the San Bernardino Million Air Franchise; three hangars, including Hangar 763, where two companies affiliated with the airport’s contract developer, Scot Spencer, Norton Aircraft Maintenance Services and SBAM Technics, are located. According to the search warrants, the authorities were seeking information regarding suspected misuse of federal funds, bribery, mail fraud, wire fraud and conspiracy.

Of interest to investigators were Spencer; SBIAA executive director Donald L. Rogers, who has since resigned; assistant SBIAA executive director Michael Burrows; aviation director Bill Ingraham; former SBIAA and IVDA director and current SBIAA and IVDA consultant T. Milford Harrison; San Bernardino International Airport Authority counsel Tim Sabo; San Bernardino mayor and SBIAA and IVDA board member Pat Morris; county supervisor and SBIAA and IVDA board member Josie Gonzales.

Spencer entered into the agreement with SBIAA and the Inland Valley Development Authority to oversee what was supposed to be a $38 million renovation of the airport’s passenger terminal and a $7 million development of its concourse. Spencer undertook that appoinment amid confident predictions that upon completion of those assignments the airport would attract at least one passenger carrier and as many as a half dozen airlines. The cost of the passenger terminal and the concourse escalated to $142 million and the airport has yet to host any commercial airlines, although corporate jets and other private pilots have been landing at the Million Air corporate aviation facility, for which Spencer is the franchisee, since last year.

The cost overruns for the terminal project, the failure of San Bernardino Airport to attract commercial airlines and Spencer’s relationship with Rogers, Harrison and SBIAA and IVDA counsel Timothy Sabo have raised eyebrows and brought SBIAA and IVDA under increasingly critical scrutiny.

On June 30, the San Bernardino County 2010-11 Grand Jury delivered a report that questioned several elements of Spencer’s performance and that of Rogers, calling into question what was characterized as lax oversight of the airport’s operations and favorable treatment accorded Spencer with regard to leasing arrangements.

Spencer’s influence over operations at the airport, where several companies he owns are housed, is increasingly perceived as being in conflict with and counterproductive to the goal of bringing in aeronautics oriented companies interested in remaining at the airport for the long term. In some cases, Spencer’s pursuit of his own imperatives conflicted with the corporate aims of others companies functioning at the airport, resulting in those companies departing.

Spencer now owes the county more than $604,000 in unpaid taxes on property and equipment at the airport since 2005. The county had made no effective effort to collect on those unpaid taxes until three weeks after the September 21 FBI raid.

The FBI’s action at the airport was taken as yet another indication of federal prosecutors’ lack of confidence in the San Bernardino County district attorney’s ability, willingness and resolve to aggressively act with regard to issues involving malfeasance on the part of local governmental officials.

At the San Bernardino County district attorney’s office, Ramos and other officials were reticent about what the federal government’s active interest in local political and public agency corruption cases signifies. “That sounds like a question for the FBI,” district attorney’s office spokesman Christopher Lee told the Sentinel. “We’re not going to speak about another agency’s handling of cases in our county.”

Lee said he could not say whether information churned up by the FBI will be used exclusively by the U.S. Attorney’s Office in any criminal cases it elects to pursue or whether the information might be provided to his office for potential prosecutions in state court.
“I don’t have that knowledge,” he said.

Quincey

Staff Reports
Created: 11/13/2011 06:03:40 AM PST

The Upland City Council will hold its first meeting on Monday since fired city manager Robb Quincey filed a claim seeking “unlimited” damages related to his dismissal.

The council is expected to hear about the claim in closed session prior to its 7 p.m. meeting.

Quincey, who was terminated in May by the City Council, is seeking unlimited damages, accusing the city of breaching his employment contract, wrongful termination and violating labor codes. The claim also accuses Mayor Ray Musser and Councilman Ken Willis of defamation and placing Quincey in false light.

To read entire story, click here.

The decision by a panel of the 4th District Court of Appeal upholds Riverside’s ban. It could embolden more cities and counties to enact their own bans.

By John Hoeffel, Los Angeles Times
November 11, 2011

In a decision that could have immediate fallout for medical marijuana dispensaries, a state appeals court has ruled that California law allows cities and counties to ban the stores.

The contentious issue has bounced through the state courts for years, but the opinion issued Wednesday is the first published one that directly tackles it and does so in unambiguous language. The decision, which upholds Riverside’s ban, could embolden more cities and counties to enact their own. It also could spur those that have bans to be more aggressive about seeking court orders to close defiant dispensaries.

“I think its impact will be significant throughout the state,” said Jeffrey Dunn, an attorney who argued the case for Riverside. “It’s not wishy-washy. It squarely addresses it. And it makes it very clear.”

In the case, a three-judge panel in the 4th District Court of Appeal in Riverside rejected an appeal from Inland Empire Patient’s Health and Wellness Center and concluded that the state’s medical marijuana laws do not prevent cities and counties from passing regulations on dispensaries, including bans. The judges also issued a nearly identical unpublished opinion Wednesday, upholding Upland’s ban.

The decisions closely follow another appellate court ruling that said Long Beach could not adopt any regulations that amount to authorizing dispensaries because marijuana remains illegal under federal law. That decision has left officials throughout the state puzzled about what rules they can impose. Together, the two decisions could lead more cities and counties to put bans in place.

Joe Elford, chief counsel for Americans for Safe Access, said he fears that could happen, but added, “I would hope that they would do the responsible thing and continue to regulate dispensaries.”

Long Beach, which had used a lottery to select the dispensaries it would allow, will now consider a ban.

To read entire story, click here.

Wes Woods II and Sandra Emerson, Staff Writers
Created: 11/09/2011 06:58:49 PM PST

RIVERSIDE – The banning of the G3 Holistic marijuana collective by Upland and other cities was upheld by an appellate court Wednesday. A judgment from the Fourth District Court of Appeals determined that Upland’s banning of the collective did not contradict Proposition 215, the 1996 law that approved medical marijuana in the state, nor Senate Bill 420, which details the amount of marijuana a person can possess for medical purposes.

“We conclude Upland’s ordinance banning (medical marijuana dispensaries) is not preempted by state law,” read the decision. “We therefore affirm the preliminary injunction, judgement and all related monetary awards.”

In a separate ruling, the court also ruled in favor of the city of Riverside banning the Inland Empire Patient’s Health And Wellness Center, Inc.

The Riverside decision is published, meaning it has the backing of court and sets a statewide precedent while the Upland case is unpublished and did not.

The decision further stated:

“We reject the proposition that local governments, such as Upland, are preempted from enacting local regulations banning MMD’s. Upland’s zoning and business license ordinances (referred to collectively as Upland’s zoning ordinance) do not duplicate, contradict, or expressly occupy the field of state law.”

G3 attorney Roger Jon Diamond said he will try to appeal the Upland case to the state Supreme Court.

“It’s just a partial journey on the way to the state Supreme Court,” Diamond said Wednesday. “I’ve argued many cases there before. I’m not deterred or discouraged by the defeat.”

To read entire story, click here.

Miranda Oley, 20, of Riverside protest on the corner of Twelfth Street in support of patients medical marijuana Wednesday November 2, 2011 in front of the Fourth District Courthouse in Riverside. (LaFonzo Carter/ Staff Photographer)

By Wes Woods II, Inland Valley Daily Bulletin
Created: 11/02/2011 02:55:01 PM PDT

RIVERSIDE – The 4th District Court of Appeal has 90 days to render a decision in a case involving the city of Upland’s ban of a medical marijuana dispensary operated by G3 Holistics.

A packed courtroom listened Wednesday afternoon to attorneys for both sides present their cases on whether Upland could ban such dispensaries.

A ruling by the court could set precedence for how cities and counties throughout California regulate medical marijuana dispensaries.

“The court asked very good questions,” G3 attorney Roger Jon Diamond said. “The judges are smart and conscientious. I’m optimistic. The argument went very well.”

Upland attorney Mitchell Abbott declined comment.

The president of G3 Holistics is Aaron Sandusky.

On Tuesday, the Drug Enforcement Administration, aided by San Bernardino County sheriff’s deputies and police, raided the Upland location and five others associated with Sandusky, which they believe are illegally selling marijuana to the general public.

An appellate court had previously issued a tentative opinion favoring Upland’s ban of the collective.

Abbott and Diamond presented their sides after submitting briefs to the court.

Diamond said cities and counties can limit – through zoning – where medical marijuana dispensaries are located but they cannot prohibit them.

His argument cited Proposition 215, the 1996 law that approved medical cannabis in the state, and Senate Bill 420, passed in 2003, which details the amount of marijuana a person can possess for medical purposes and sets guidelines for identification card programs.

“Legislation informed the issue of preemption,” Diamond said. “What legislation has done, the court should do.”

Diamond said it looked like cities were “intimidated by the federal government” in banning the dispensaries.

“We have to act as the federal law did not exist,” Diamond said. “Cities cannot argue to go to another city (if they ban medical marijuana). It’s inconsistent with … patient access.”

Federal law bans medical marijuana dispensaries.

Diamond pointed out adult businesses are regulated but not completely banned.

Meanwhile, Abbott said cities have the right to ban dispensaries and Diamond misrepresented what the voters wanted.

“The intent of the voters was to provide limited immunity from criminal prosecution,” Abbott said.

Abbott said Proposition 215′s intent was not about if the public has access to medical marijuana.

“Some cities outlaw horses,” Abbott said. “You can quibble if (laws) are wise or not.”

Abbott added people have the power of referendums or other means to challenge decisions.

Diamond rebutted Abbott’s comments and said the preamble to Proposition 215 made it clear people could “use marijuana where deemed appropriate.”

Upland City Attorney William P. Curley, who did not attend, said in a statement that “the city looks forward to the Court’s thorough review of the evidence and testimony and the opinion they will issue after their deliberations.”

Also heard Wednesday was a similar case involving the city of Riverside ban of dispensaries, specifically the Inland Empire Patients Health and Wellness Center.

To read entire story, click here.

Published: 02 November 2011 08:29 PM

A state appellate court panel heard arguments Wednesday on whether Riverside and Upland can issue citywide bans on medical marijuana dispensaries.

Arguing before a courtroom crowded mostly with supporters of the dispensaries, attorneys for the cities argued that nothing in the 1996 Compassionate Use Act (Prop. 215) or the state Legislature’s Medical Marijuana Program which outlines usage, preempts municipalities from banning the facilities.

Arguing for Riverside, attorney Jeffrey V. Dunn said the laws never contemplated commercial businesses to sell marijuana. He said the original concept was for personal cultivation.

Lawyers for the dispensaries said total bans, such as the ones issued by Upland and Riverside, frustrate the intent of the state’s voters and lawmakers to permit limited legal use of marijuana for medical needs.

“We believe a total ban contradicts the policy set by voters when (Prop. 215) was passed in 1996,” attorney Roger Jon Diamond told the three-judge panel in Riverside. He said a “common sense” view is that voter approval of the proposition at least implied state preemption of local bans.

Cities do have the right to regulate such matters as dispensary hours, appearance and location, but “In terms of a total ban, that crosses the line,” said Diamond, who represents G3 Holistic Inc. in the Upland case.

Arguing for Upland, attorney Mitchell E. Abbott said the state’s laws regarding medical marijuana are “very narrow,” essentially guaranteeing that qualified patients, caregivers and providers cannot be prosecuted, and nothing else.

“There is, respectfully, no ‘common sense’ preemption” of municipalities from banning clinics, he said.

Attorneys for G3 Holistic were asking the court to “Engraft onto the statute something the voters decided not to put there,” Abbott said.

To read entire story, click here.

Sandra Emerson, Inland Valley Daily Bulletin
Created: 11/02/2011 11:45:09 AM PDT

Read: Quincey Claim

UPLAND – Former City Manager Robb Quincey has filed a notice of claim with the city over his termination.

Quincey, who was terminated in May by the City Council, is seeking unlimited damages, accusing the city of breaching his employment contract, wrongful termination and violating labor codes.

The claim also accuses Mayor Ray Musser and Councilman Ken Willis of defamation and placing Quincey in false light.

Quincey seeks reimbursement for attorney’s fees associated with filing the claim as well as indemnification of his defense costs in the federal grand jury investigation of the city of Upland, per his employment agreement.

“I guess the overall feeling is that Robb Quincey had a deal with the city, and a deal’s a deal,” said Joseph Wohrle, Quincey’s civil attorney.

In addition, according to the claim, the city withheld payments and other benefits that were due to Quincey. The city also took inappropriate deductions from funds due to him as well as from his retirement and similar funds, according to the claim.

Wohrle said he did not want to disclose the amount of damages Quincey may be seeking, but said “unlimited” means more than $25,000.

“Well, there is a dollar amount, we just have not finished the calculations, but they are substantial we believe,” Wohrle said.

An amount will also be sought for the defamation and false light claims, he said.

“There will be a dollar amount, but because of the damages to Mr. Quincey’s livelihood it is at this time incalculable,” he said.

Willis and Musser said they were advised by the city attorney not to comment.

Quincey’s employment agreement with the city included an arbitration provision, Wohrle said.

“So we anticipate that if the claim is not resolved beforehand, then ultimately we will be in arbitration,” he said. “We would certainly be interested in entertaining a settlement offer or discussing settlement with the city, but we already tried to do that.”

Quincey was placed on paid leave of absence in January following reports that he settled two claims in January 2010 involving Upland police for $50,000, which at the time surpassed the amount he was allowed to settle.

However according to Quincey’s claim, the two claims were settled separately for $25,000 each, which was within his authority.

The council terminated Quincey for violating his employment contract and failing to follow specific council direction. However, the city never specified the violations that resulted in his termination, Wohrle said.

The claim states that, based on the events leading up to his termination, Quincey believes he was terminated for scrutinizing the billing practices of City Attorney William Curley and his firm, Richards, Watson & Gershon; refusing to execute a waiver of conflicts of interest that would have allowed the law firm to to represent other local municipalities and/or water agencies of which the city was a member, in some instances, in litigation matters against the city; as well as his settlement of the two Upland police claims.

According to the claim, the reasons for termination constitute a wrongful termination and violated the state’s public policy and labor codes.

“It is my understanding that the former city manager benefited greatly from his personal relationship with the former mayor, much at the expense of Upland taxpayers,” said Councilman Gino Filippi. “Unfortunate to say the least. I would vote again to terminate his contract if I had the opportunity.”

City Councilman Brendan Brandt said, “I have been advised by the city attorney that the matter is now a legal matter, and that I have no comment other than it’ll run through the standard legal process with the city.”

Cause for termination

Quincey’s claim alleges three causes for his termination, which he believes to be in violation of his employment agreement with the city as well as other labor laws and public policy.

Quincey’s claim alleges part of the reason for his termination was because he conducted a third-party audit of the billings from Curley and his law firm.

In November 2010, Quincey asked the city’s third-party claims investigator, NovaPro Risk Solutions, to audit one month of the law firm’s legal fees on the litigation involving the San Bernardino County Flood Control District and G3 Holistic, a medical marijuana cooperative in Upland.

In an email sent in December to Quincey from then-Finance Director Stephen Dunn, who is now city manager, Dunn noted several instances in which the city may have been billed amounts that were “excessive and possibly frivolous.”

Quincey relayed the concerns to the City Council.

To read entire story, click here.

Quincey

Wednesday, November 2, 2011 – 04:00 p.m.

Former Upland City Manager Robb Qunicey has filed a legal claim against the city of Upland regarding his ouster earlier this year.

In the the claim, provided to InlandPolitics, Quincy alleges he was discharged by the Upland City Council for carrying out his lawful duties in violation of his employment contract.

Quincey cites various examples of his attempts to thwart perceived wrongdoing at City Hall.

The claim, usually precursor to a lawsuit, was filed by attorney Joseph Wohrle of Santa Monica-based law firm of Allen and Wohrle LLP.

To read the claim and view attached exhibits, click here: Quincey Claim Against City of Upland

Colton police were on the scene while the Drug Enforcement Administration raided a G3 Holistic medical marijuana collective Tuesday in Colton. (LaFonzo Carter Staff Photographer)

Ryan Hagen, Staff Writer
Created: 11/01/2011 07:36:14 PM PDT

Federal agents on Tuesday raided an Upland location and five others associated with Aaron Sandusky, whom they believe are illegally selling marijuana to the general public.

The Drug Enforcement Administration, aided by sheriff’s deputies and police, searched the six locations connected with Sandusky and John Nuckolls, the president and chief financial officer, respectively, of medical marijuana dispensaries in Upland, Colton and Moreno Valley.

As a result of Tuesday’s raid, Christopher Kenner, a client of G3, said he will organize a boycott of Upland in coordination with the collective’s 8,000 patients.

Kenner, who said he had used G3′s Upland site since it started in November 2009, said the boycott would start after this weekend.

“If 8,000 people don’t spend money in the downtown area, I want (Upland mayor) Ray Musser to know why,” Kenner said.

Sandusky, who said he will reopen today at his locations, has run the area collectives openly, saying California allows the use of marijuana when recommended by a doctor, though still illegal under federal law. .

However, that’s not all that was going on at G3, Special Agent Patrick Kelly said in a 27-page search warrant affidavit.

“Based on my investigation, I believe that the G3 stores operate to make a profit and attempt to disguise the breadth of their criminal activity by claiming that they cater exclusively to persons suffering from medical illnesses, when in fact persons without any medical condition can purchase marijuana at these retail establishments,” he said in the affidavit.

Undercover deputies with no health conditions but fake recommendations were able to buy marijuana from all three collectives, according to the affidavit.

Sandusky said Tuesday that he checked the license and background of all recommending doctors but could not verify the health of every one of his patients — more than 9,000 in Colton and about 8,000 in Upland.

“How do you see cancer? My dad died from a brain tumor and he couldn’t see it until he died. It’s the doctor’s job to find those things,” he said.

The warrant was issued to find evidence of possession of marijuana with the intent to distribute it, conspiracy to distribute marijuana and maintaining drug-involved premises, authorities said.

In addition to the three dispensaries, agents searched an Ontario warehouse believed to be used to grow marijuana. They also searched the Rancho Cucamonga home of Sandusky and the Rialto home of Nuckolls.

To read entire story, click here.

Sandra Emerson, Staff Writer
Created: 10/31/2011 09:24:41 AM PDT

UPLAND – The process by which the City Council sends items to its advisory committee is far from being resolved.

Council members last week held off on discussing how items are referred to the five-member City Council Advisory Committee.

Currently, the mayor or any council member can refer an item to the advisory committee, but Councilman Gino Filippi believes a majority vote by the council should be the only means for referring items.

“I would like for the full City Council to have the opportunity to discuss issues,” Filippi said.

“The majority of the City Council should be the only means for referring items to the CCAC. Personally, I prefer to hear directly from the public. This is quite reasonable.”

The item was tabled at the Oct. 10 meeting.

The council initially discussed the process at the request of Filippi, whose concern grew after an item related to remote-caller bingo was sent to the committee without going before the full council.

Discussion of the referral process was pulled from the agenda last week because Councilman Ken Willis was expected to be absent, Mayor Ray Musser said.

Willis returned from vacation just in time for the meeting.

“I wanted a full council to discuss it,” Musser said.

Each member of the committee is appointed by a council member. The council gives the committee various policies or procedures to review during its monthly meeting. It will then make a recommendation for action to the council.

Bingo Innovations of California in Ontario sent the council an email last month asking the city to amend its bingo ordinance to allow remote bingo.

To read entire story, click here.