United States Drug Enforcement Administration

FRESNO, CA - United States Attorney Benjamin B. Wagner announced today that the United States Court of Appeals for the Ninth Circuit affirmed the convictions and sentences of Ricardo Montes, 29, and Luke Scarmazzo, 29, both of Modesto.

On May 15, 2008, following a three-week trial, a federal jury found both defendants guilty of conducting a continuing criminal enterprise, cultivating more than 100 marijuana plants, and possessing marijuana with the intent to distribute it. On November 2008, U.S. District Judge Oliver W. Wanger sentenced Scarmazzo to 21 years and 10 months in prison and Montes to the 20-year mandatory minimum prison sentence.

On appeal, the defendants argued that the district court erred in denying their motion for new trial based upon a juror’s reading, and subsequent discussion during jury deliberations, of a summary of a newspaper article reviewing the marijuana polices of presidential hopefuls. The Court of Appeals agreed with the district court in Fresno in finding that the jurors’ consideration of such information could not have affected the jury’s verdict.

The Ninth Circuit Court of Appeals, which heard argument on this case on August 31, 2010, in San Francisco, also rejected the defendants’ other claims, finding that the district court judge in Fresno did not err in admitting “Scarmazzo’s self-aggrandizing music video,” in which Scarmazzo described himself as a businessman engaged in marijuana sales. Nor did the Court of Appeals find any error in excluding evidence that the defendants believed that federal law allowed them to grow and sell marijuana if it were for alleged medical reasons. The Court of Appeals, like the district court, rejected the latter argument based on the fact that the defendants had no evidence that they reasonably relied on the advice of a federal government official as a basis for any such belief. Finally, the Court of Appeals upheld the prison terms as not disproportionate to the defendants’ crimes.

U.S. Attorney Benjamin Wagner said, “These defendants’ efforts to make themselves wealthy through exploiting medicinal laws were ended by this prosecution. In its ruling today, the Court of Appeals reaffirmed that the federal law does not permit the manufacture or distribution of marijuana.”

The evidence presented at trial showed that from 2004 until September 2006, the defendants openly ran the California Healthcare Collective, a marijuana dispensary they co-founded in Modesto. During those two years they made $9.2 million in sales, with up to 14 employees who cultivated, packaged, and distributed marijuana. During the investigation, law enforcement officials made 10 controlled buys and seized more than 50 pounds of marijuana, more than 1,100 marijuana plants, and in excess of $200,000 in cash. Evidence at trial showed that the defendants paid themselves a salary of $20,000 a month, and used cash to make personal expenditures in excess of a $100,000. Many times during their two years in business, the defendants openly admitted to law enforcement officials that they ran a marijuana dispensary. At trial, the defendants repeated these admissions on the witness stand.

This case is the product of an extensive investigation by the Drug Enforcement Administration, Modesto Police Department, Stanislaus Drug Enforcement Agency, and Central Valley High Intensity Drug Task Force. Assistant United States Attorneys Kathleen A. Servatius and Elana S. Landau represented the United States at trial and on appeal.