Dispensary owners face harsh federal gun charges for heeding a local sheriff's request to hire security guards
By Pamela A. MacLean
The two Norton brothers thought someone was breaking into their Oakland apartment to kill them one pre-dawn day in October 2007. Instead, a couple dozen well-armed and screaming federal drug agents stormed the place, rousted the pair, and dragged them around the apartment before arresting them.
Winslow and Abraham Norton operated one of the most successful medical marijuana dispensaries in the Bay Area, the Compassionate Patients' Cooperative of California, in Hayward. In just the first six months of 2007, the operation grossed $26 million.
But if they thought facing a federal indictment on charges of conspiracy to possess and distribute more than 1,000 kilos of marijuana and money laundering was their worst nightmare, the Norton brothers just weren't dreaming big enough.
The pair — with all-American good looks, close-cropped beards, and infectious smiles — finish each other's sentences when they describe their run-in with the federal justice system.
"We were 11 and 14 when medical marijuana was legalized, and we grew up in Berkeley," Abraham said "It may be naïve, but we didn't understand the legality. Now we know federal law a lot better."
Abraham, 26, and Winslow, 29, played by the rules in California's fledgling medical marijuana law. In 2005 they got an Alameda County permit to operate from the former Sheriff Charles Plummer, a seller's permit from the state, paid taxes, and had random inspections by local police.
They even hired security guards to patrol the place to make sure patients felt safe. After abandoning a couple of security companies as "no good," they hired a tough bunch that had former Navy SEALS, Marines, and cops in their ranks, SEAL-Mar Security. They rotated a crew of 44 different guards who patrolled outside and carried Glocks, Smith & Wessons, Sig Sauers, and Rugers to make sure no one caused trouble.
"We are very proud we were squeaky clean and examined under a microscope," Winslow said. "We never did a deal out the back door," Abraham insisted. They sold so much marijuana to legitimate patients "it never made sense and it would have hurt the company" to do any illegal side deals, Winslow said.
But selling marijuana is still a federal crime, and in negotiations the prosecutor insisted the brothers accept five-year minimum prison terms. They refused, offering to plead guilty to conspiracy and let U.S. District Judge D. Lowell Jensen set the sentence. Assistant U.S. Attorney Steve Corrigan balked. Then, according to the Nortons and their lawyers, Corrigan upped the ante, threatening to indict their mother, who helped out in the co-op by opening up for the early shift.
"We had to tell her over a Thanksgiving," Winslow said. "It was pretty miserable. We didn't know what to do."
Then, in February 2009, the government indicted their father instead, along with a coworker, and added a far more serious charge: aiding in the carrying of a firearm to further a drug crime. That charge alone carries up to life in prison, but no less than five years.
The Nortons had no guns. It was the gun-toting security team that was "aiding" in a drug conspiracy.
"It is plain and simple coercion, nothing less than that," said Harold Rosenthal, Abraham's attorney.
"When we heard the charge, we said 'you must be kidding,'" says Doron Weinberg, the high-profile defense lawyer who defended record producer Phil Spector in his 2007 murder trial. "I have never before heard of a person charged with violation of a gun law because they hired a security guard."
Although there is a new U.S. attorney, Melinda Haag, she isn't talking. "It is an ongoing case so we have no comment," said her spokesman Jack Gillund.
Sheriff Plummer, who retired in 2007 after 50 years in law enforcement, said of the weapons charges: "It's bullshit."
"While I don't favor their type of business, it was legal. I wanted to make damn sure they were protected, people were protected, and the building was protected. I told them to hire a security crew," he said.
Abraham says Plummer assured them during a county Board of Supervisors meeting that if they did everything he required, the feds would leave them alone. "I could have said that," Plummer said when asked about that assurance.
Although the new charge is "aiding" use of weapons, the security crew was not charged with a crime. It had no effect on the guards or the company, according to Tom Turner, one of SEAL-Mar's owners.
The indictment of their father, Michael, was no accident. Michael is a patient of the dispensary, but the brothers and his lawyer, Bill Osterhoudt, say Michael had no ownership interest in the co-op.
What Michael Norton does have is a criminal record. In the 1980s, he went to prison for two years in what was known as the Kona coffee caper. He bought low-cost Guatemalan coffee beans and sold them as pricey Hawaiian Kona coffee.
Piled on to the Norton brothers' legal problems is a tax bill that went unpaid when the federal agents raided their apartment and the business. When the federal agents swept in three years ago, they seized the brothers' two cars, a house they just bought, more than 300 pounds of marijuana, and an electronic deposit of nearly $340,000 in sales tax sent to the state Board of Equalization, according to Winslow.
"We thought the wire transfer cleared. We had confirmation, but the government still seized it," Abraham said. "They stole the money," Winslow said. That debt, with penalties and interest, is now close to $1 million, according to Abraham.
"The feds snatched the sales tax money and left the Nortons liable for it, and now they have liens against them for the money," Rosenthal said.
The irony for the brothers is that they believe they were the first dispensary to voluntarily pay sales taxes. "We collected them for six months and took a check for $1 million to the BOE," Abraham said. "They didn't want to take money from medical marijuana sales and told us to call it something else," Winslow said. "We refused. They wanted us to lie and say the bags cost $300 and the contents were free. But that would have screwed up our accounting."
After accepting the initial payment, within a week the board issued letters to all the dispensaries in the state asking for sales tax, according to the brothers.
Judge Jensen rejected defense efforts to get the gun charges thrown out in September. But Jensen, a Republican former prosecutor, signaled he is not happy and ordered both sides to sit down Dec. 9 for formal talks before a magistrate to see if they can resolve the case.
"It's not enough to say we want the case dropped," Abraham said. "Our credit is destroyed. We can't work."
"Three years later we are still fighting it," Winslow said. "We've been fighting this almost as long as the dispensary existed."
As for the brothers' chances to negotiate a resolution with the feds, Rosenthal said, "I'm somehow hoping the clouds are going to part and sanity is going to set in."