UKIAH, Calif. (CN) - The director of a medical marijuana collective embezzled payroll, dodged taxes and sold large amounts of pot to nonmembers for resale, two member-employees claim in Mendocino County Court.
Django Broomfield and Shara Stamler sued John Oliver, the "de facto controlling member" of the co-op, and California Wide Patient Group Inc. dba Collective Conscious Apothecary.
The Collective Conscious Apothecary (CCA) is a member-owned nonprofit that connects medical marijuana patients to caregivers, according to the complaint. Its dispensary is in Hopland. The plaintiffs accuse Oliver of "conversion and embezzlement of the nonprofit's assets, to wit: unlawful conversion of marijuana, selling the marijuana to nonmembers, and embezzling the nonprofit's payroll and payroll takes."
They add: "As owners and customers, the members have a right to know what the performance of the offices and directors has been, and the true economic situation of the CCA."
Broomfield, also a CCA director, claims that in December 2011 he confronted Oliver after seeing him take money from the group and discovering that a check written to the local fire department had bounced.
"Upon being confronted about these missing funds Oliver alienated Broomfield from the collective and refused to account for his taking of the collective funds intended for charitable distribution," the complaint states.
The plaintiffs say they began seeing Oliver let nonmembers into the group's dispensary on a weekly basis starting in February.
In April, Oliver told Broomfield "that he had some buyers that were not members of the collective that wanted to purchase a large amount of marijuana to resell," according to the complaint.
It continues: "Broomfield told Oliver that he would not participate in any back-door marijuana deals and that it was a bad idea. Oliver then demanded an answer from Broomfield as to whether he was in or he was out of the diversion scheme. Broomfield told Oliver that he would not participate in the diversion scheme and that he was out."
Broomfield also claims that beginning in December 2011, he "witnessed John Oliver repeatedly retain one-half of employees' pay, claiming that the deducted pay was a
'loan' to CCA." He claims he demanded an accounting on Jan. 1, and that Oliver has refused to provide it.
Stamler claims Oliver promised to pay her $5,000 a month to work at CCA, beginning in November 2011. She claims he did not pay her at all for November or December, and after she called him on it, he told her he would pay only half of what she was owed, "and the remaining balance owed would have to be loaned to CCA."
Stamler claims the defendants owe her $15,000, and that Oliver "told her to sue him if she ever wanted any of her back pay."
Both plaintiffs say they "believe that defendant John Oliver embezzled these funds for his own personal gain."
They also claim that Oliver paid the collective's payroll in cash and gave employees written pay stubs showing tax withholdings, but kept the tax withholdings for himself.
Stamler claims Broomfield fired her after Broomfield refused Oliver's request "to sell pounds of marijuana to unqualified nonmembers out the back door of CCA."
The plaintiffs seek an accounting and an order restraining Oliver from managing the group. Broomfield wants to be appointed as a receiver to take over the collective pending the outcome of the lawsuit.
The plaintiffs are represented by Rebecca Mendribill in Santa Rosa.