San Jose Pot Club Accused of Fraud, Money Laundering

A criminal grand jury indicted owners of a San Jose pot club on felony charges of illegal marijuana sales, worker’s compensation fraud, tax fraud, insurance fraud and money laundering.

Authorities allege San Jose Organics failed to pay $2 million in taxes despite a paper trail showing that the collective made $10 million in profit from 2013 to 2015. Police say they also found $800,000 in cash at owner Ben Lew’s San Francisco home and another $400,000 at other places connected to the investigation.

Lew, 44, faces a maximum of 46 years in prison if found guilty of 46 felonies and one misdemeanor. His manager, 43-year-old Brian Wong, faces up to 23 years if sentenced for 15 felonies and a misdemeanor. The dispensary’s secretary of corporation, 28-year-old Ernest Ma, could spend up to a decade in prison if convicted of six felonies.

“People like these defendants are profiteers exploiting the medical marijuana laws,” Santa Clara County prosecutor Edward Liang said. “They do this, while at the same time ignoring laws that every other business in California is required to follow. We would not accept this conduct in any other industry. We will continue to hold medical marijuana dispensaries to the same standards.”

Lew’s attorney, San Francisco-based Russell Goodrow, declined to comment on the case for the time being; as did Wong’s counsel, J. David Nick. The suspects aren’t expected to enter pleas in the case for another two weeks, Nick said.

Police raided San Jose Organics, which operated a storefront off of Tully Road, in July of last year. According to Liang, evidence showed that the collective raked in about $25,000 a day in sales.

San Jose Organics was the subject of a NBC Bay Area investigation in May 2015. Reporters equipped with hidden cameras reportedly caught the club selling to patients younger than 21. While state law allows clubs to dispense marijuana to patients over 18, San Jose has set the legal age at 21.

The city tried to shutter the club for nearly a year and fined its operators $100,000 at the time of the report. Two months later, state and local law enforcement raided the club and arrested its owners.

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


  1. Well can you imagine my surprise at reading this article! Could it be that that the medical marijuana industry is really nothing more than organised crime and just for recreation?

    Back in my day if you got caught skimming that much of the take you became a navigation hazard in the East River.

    So how do I get a licence to peddle this $}{!T $,$$$,$$$,00?

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