Money Laundering Charges For Man Suspected Of Owning Chain Of Bay Area Medical Marijuana Clinics
OAKLAND (KPIX 5) -- The alleged owner of a chain of medical marijuana clinics is facing criminal charges again after KPIX 5 first reported on the case last year.
This time the man is back in jail on charges of laundering millions of dollars through those illegal clinics.
30 year old Mikhael Malenkov was in court last year. He claims he's just a regular guy, waiting tables and making money on the side doing web work. But prosecutors say he's the ringleader of a multi-million dollar criminal enterprise.
He's alleged to own a chain of medical marijuana referral clinics, called 420 MD, in Oakland, Berkeley, San Jose and Sacramento. According to court documents Malenkov and his associates hire doctors on Craigslist, pay them by the hour to write recommendations and rake in the cash.
Six people were arrested and charged last year with money laundering, conspiracy and the unlawful practice of medicine. But the clinics kept right on seeing patients. "I don't think any of them were closed for more than an hour or so," said Santa Clara County Deputy DA Victor Chen. "If marijuana is legalized then there is no need to have a medical marijuana referral clinic. So I think they realize the window is closing and it's just worth their time to grab as much cash as they can," he said.
• ALSO READ: All-Time High: Poll Finds 61 Percent Support Marijuana Legalization
Chen says new evidence shows the four clinics issued over 92,000 medical marijuana recommendations in the last 28 months. A basic recommendation costs $65 dollars. But as we found out in an undercover visit, most people spend more. A picture ID costs an extra $20.
Then there's the $50-dollar protection plan. "It comes with a business card to our defense attorney, who specializes in cannabis law," the employee at the counter told us. And then there's so-called "growing limitation exemption." "It's for 99 plants, it's $299," she said. "If he is the owner operator, as our evidence indicates, he has made roughly $9.5 million in the last 28 months," said Chen.
Yet Chen says Malenkov claimed he made only made $6,000, prompting the DA to file new tax evasion charges. We got a tip that the money is picked up every week from all 4 clinics by this man.
Minutes after going in to the Oakland clinic we observed him coming out again with a large backpack. We showed the video to DA Chen. "It looks like he fits the description of the person that would be picking up the cash," he told us. He says investigators were able to trace some of the money to 36 different bank accounts, and to an address in the upscale community of Agoura Hills, just north of Los Angeles.
That's where the L.A. county sheriff arrested Malenkov and the alleged bagman at daybreak one recent morning. Investigators with the Department of Consumer Affairs' Division of Investigation searched the home for hours, coming out eventually with a large box of evidence and over $90,000 in cash.
In a first court appearance Malenkov's defense attorneys argued the new charges should be dismissed. "The charge is basically repetition, compared to what has already been filed. And we are going to be seeking to have Mr. Malenkov released again on his own recognizance with an ankle bracelet, like he was previously," said his attorney, Allison Margolin. Meanwhile back at the clinics it's once again business as usual.
