News Release
January 31, 2008

Ex-Owner of Seven Marijuana Stores Pleads Guilty to Federal Drug-Distribution, Money Laundering Charges

FEB 01 -- The former owner and operator of seven marijuana stores called Compassionate Caregivers pleaded guilty today to federal narcotics and money laundering charges, admitting that he was responsible for the distribution of more than 15,000 pounds of pot.

Larry Roger Kristich, 65, who returned from Costa Rica last summer after being indicted, pleaded guilty to one count of maintaining drug-involved premises and one count of promotional money laundering. Each count carries a maximum sentence of 20 years in federal prison. Kristich also agreed to forfeit more than $1.2 million cash generated by sales at his stores.

Kristich pleaded guilty before United States District Judge Manuel Real, who scheduled a sentencing hearing for April 21, 2008.

From 2002 through 2005, Kristich owned and operated Compassionate Caregivers, which had marijuana stores in Oakland, San Francisco, San Leandro, West Hollywood (which operated under the name The Yellow House), San Diego, Bakersfield and Ukiah. These stores sold marijuana, marijuana plants, THC-laced edible products (including candy bars, cookies and soda pop), and THC tinctures.
Kristich was president of the company, which employed more than 200 people as growers, clone cultivators, drivers, directors, store managers, retail sellers (referred to as “budtenders”) and security guards.

Kristich admitted that sales of marijuana and THC products at Compassionate Caregivers’ stores totaled over $95 million. Kristich also admitted that he laundered more than $50 million of such drug proceeds.

“These guilty pleas show that drug dealers who attempt to hide under the umbrella of ‘medical marijuana’ cannot hide from federal law,” said United States Attorney Thomas P. O’Brien. “Kristich’s operation was nothing more than a lucrative drug-trafficking operation.”

Two other defendants in this case – James Carberry and James L. Ealy, 40, of Tujunga – are scheduled to go on trial next week before Judge Real.

The investigation into Compassionate Caregivers was conducted by the Drug Enforcement Administration and the Internal Revenue Service, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives.

CONTACT: Assistant United States Attorney Shannon P. Ryan Organized Crime Drug Enforcement Task Force
(213) 894-4586