[megayields]

When the federal government tried to confiscate more than $500,000 from the operators of illegal bingo games in Tennessee in 1994, a federal appeals court ruled that the seizure was too late because government agents had known about the lawbreaking more than five years earlier.

That's the case the city of Oakland is relying on as it tries to stop the Justice Department from shutting down Harborside Health Center, the nation's largest supplier of marijuana to medical patients.

Like the fund-skimming at the Tennessee bingo parlors, Oakland says the federal government was well aware that Harborside was distributing marijuana from the time the dispensary opened in 2006 - the date that triggered a strict five-year deadline for any government attempt to seize the property.

The city's lawsuit, filed Wednesday in federal court in San Francisco, challenged U.S. Attorney Melinda Haag's forfeiture action in July against the dispensary at 1840 Embarcadero, along the Oakland Estuary.

It was the latest of hundreds of medical marijuana outlets that California's four regional U.S. attorneys have sought to close since October 2011 by suing or threatening to sue their landlords for violating federal drug laws.

Haag's other targets had been within 1,000 feet of schools, parks or playgrounds. In announcing the action against Harborside, she cited not its location but the size of its operations, which serve 108,000 patients. The larger the dispensary, "the greater the likelihood that there will be abuse of the state's medical marijuana law," she said.

Oakland's lawsuit said the closure would damage the city, which expects to collect more than $1.4 million this year in business taxes from Harborside and three other city-licensed pot dispensaries, and would force patients to resort to buying marijuana from illegal and unregulated street dealers.

Presidential promises
The city also argued that it relied on promises by President Obama and his Justice Department, which said in public statements, congressional testimony and a 2009 memo that federal authorities would not prosecute marijuana suppliers who complied with state laws. Federal judges have rejected similar arguments by dispensary operators, finding that the government made no binding promises to them.

But Oakland's principal argument is based on a 1998 case titled United States vs. $515,060.42 in U.S. Currency. That's the amount the government claimed in a forfeiture suit against the operators of bingo games in Knoxville, Tenn., where a purportedly charitable enterprise was used as a front for profit-skimming.

The suit was filed after federal agents seized the money in March 1994. The FBI and the Internal Revenue Service had been investigating the operation since 1988, and an IRS agent testified she knew by the fall of 1988 that proprietors were running an illegal gambling business and storing the proceeds in their homes.

Under the statute of limitations, said the Sixth U.S. Circuit Court of Appeals in Cincinnati, the government had five years to seek forfeiture from the time it knew, or should have known, that the crime was being committed - a deadline it missed by six months.

Continued lawbreaking?
Government lawyers argued that the crime was an ongoing offense, and that every day of continued lawbreaking started a new five-year timetable. The court disagreed, saying the deadline runs from the date the crime is first discovered.

The same law and the same arguments apply to the Harborside case, said Cedric Chao, a lawyer for Oakland. Although the 1998 ruling is not binding on federal courts in California, he said, it provides strong authority for the city's position.

Harborside and the other city-licensed dispensaries, Chao said, operate "right out in the open. They want people to know what they're doing."

Haag's office did not respond to a request for comment.

[Peacheater81]

Thanks for posting, should get interesting pretty soon. I am pulling for them. I hope SC stays off the radar.

[wantaknow]

i really like those guys at harborside ,wish i worked there ,they are like normal people who just want to make through tough times ,hope the best for them

[supermanlives]

let harborside fight for us all. but really they are just protecting their own ass and profits.

[rives]

It's too bad that there doesn't seem to be such a thing as "entrapment" any more. Obama's statements would sure as hell fall under that. Ah, but we forget - he has no control over the Hog.

[wantaknow]

it brings up a though ,if they ,the feds recieve the taxes paid does it not mean that they knowlingly have joined in and by all right are responsable them selves for the crime at hand?i mean really you cant have it both ways

[Arthritis_sucks]

profiting from illegal proceeds of a crime type of thang i would think

You know, I've been chewing on Haag's original assertion that 'the larger the operation the greater the likelihood of criminal activity' and, to me, it really seems that the opposite would be true. It seems to me that it would be far easier for many small dispensaries to, for example, launder money, or not report sales in the first place, than an outfit like Harborside. My reasoning is that *because* Harborside IS so large, they are completely new in the MMJ paradigm. And because they're so new, they're that much more likely to be closely watched, examined, and AUDITED, as they already have been.

So, it seems to me that Haag's dog don't hunt. Her reasoning doesn't wash, it doesn't make sense. They're going after who they can go after irrespective of size because they're laying a groundwork. The IRS is the wild card here, they have powers no other governmental agency has, and they seem to be playing by their own set of rules and for their own agenda, which does not seem to be tied to special interests in quite the same way.

[hydro-phonics]

haags just one of the chief haters among many !!
if we debunk her/their reasoning to close down HSHS - she/they will think of another for us just to kill with logic and reasoning

i love this law - similar to the statute of limitations but slightly different
for all the stupid shit you can get in trouble for in America - their are some laws to get you out if you have a good lawyer !!!
hahahahahaaaa!!

[unspoken]

Originally Posted by SeaMaiden

You know, I've been chewing on Haag's original assertion that 'the larger the operation the greater the likelihood of criminal activity' and, to me, it really seems that the opposite would be true.

This was the first thing I thought when reading it. Not necessarily that the opposite was true, just that the argument she presented made absolutely zero sense.