A Professional Bust

It was one of those stories that makes a big splash in the local media and then disappears. A warehouse in Hunters Point had been raided by the DEA in late March, “a sophisticated marijuana cultivation site” dismantled, 406 plants removed. There was no follow-up story because nobody ever got charged. The 67-year-old man who had leased the warehouse and was indeed growing marijuana there -Fred Demchuk- showed me around the denuded interior about a week after the bust and described what had gone down. Reporting the story could only go against his interests, I figured, so I didn’t.

I’d first met Fred in ’96 at Prop 215 campaign headquarters (Dennis Peron’s fabulous club on Market Street). We both used to come by around 5 p.m. on Fridays to hear Mike Mack play the piano and enjoy the end-of-the-work-week vibes. In recent years Fred and Mike were involved in a patients’ union whose members are mostly low-income folks. The founders had given thought to launching a dispensary but lacked the necessary capital. Their Plan B was to rely on competent Fred Demchuk and other volunteers to grow or otherwise obtain cannabis for union members at the lowest possible price. Fred leased the small warehouse in April 2001. He cleaned and painted, then hired an experienced indoor grower to install lights, ballasts, an irrigation system, etc., and to oversee production. Fred handled security himself by moving into a small trailer outside the warehouse. On week-ends he’d visit his wife and family in San Jose.

In due course Fred and the grower had a falling out. Allegations of theft were made, but not to the police. The grower departed and Fred took over the operation. He had never grown indoors before (and only once outdoors, in 1976, on a very small scale) but he’d been looking over the grower’s shoulder and learned about pH and what goes into the nutrient solution. “He was doing things wrong,” Fred said in retrospect. “I took over in the midst of a dying crop and somehow turned it around. We’ve been able to sell everything that we grow. Everything. Everything we grew was sticky. Even the cops, when they were taking the stuff out, said man this stuff is really sticky.” You know how growers talk… “They were beautiful. It broke my heart to see ’em go… Some were ready to harvest, some were three weeks into bloom.. We used two lights per table. That was our secret of success: photosynthesis you couldn’t believe! This whole room was up to here, almost ready to be harvested…”

The confiscated crop was the one the union was counting on to repay their loans and come out ahead for once. “We’ve never been able to make a profit at this place,” according Fred. “It costs $3500 a month to rent and another $2000 at least for the electricity.” Fred expected to get one ounce per plant -a pound to a pound and a half per table. There were 12 tables. He was growing on a 90-day cycle -a month of vegetative growth followed by two months of blooming. “We’d run out of money at the end of the cycle,” said Fred. “It might be a month before we could afford to buy clones again.”

The buds were dried and sold to union members for $200/ounce at twice-monthly meetings called “jubilees.” Fred described the members as “basically people who can’t afford $400 at a club. I can honestly say we provided it at cost because we didn’t make a friggin’ dime. If I had I wouldn’t be living in a trailer and I wouldn’t have 240,000 miles on the car I’m driving. This is a break-even operation.”

The raiders had taken lights and ballasts (32 each at $300/pair = $90,000 worth of equipment, according to Fred). They left the tables, each containing 25 one-gallon pots with cleanly lopped-off stumps about four inches high. Each plant had received water and nutrients via thin black tubing from sprinkler heads coming off a 2-ich riser from a 1-inch PVC pipe. The growing medium was rock wool. Netting strung above the table had supported buds that, at the time of the raid, had been forming for three weeks. “Some people use a spring attached to a device up here to hold the branch up,” said Fred. “Trellis works just as well… We had a system where you could irrigate all the plants from one pump system. They didn’t take the pumps.”

Busted along with Fred, was a 31-year old Navy vet disabled by severe migraines. Fred estimated the raiding party at “twenty or more -state, county, there must have been four or five agencies, led by four DEA agents. They came in with guns drawn, but they didn’t put them to our heads or throw us to the floor. They handcuffed us but they didn’t curse at us. They were professionals. In fact, I give them an outstanding. I’ve done enough of these operations myself in the military to know that when you go through the door you’ve got to have absolute fire control because somebody could pull off a stray round and hit a friendly or hit a civilian. Two: you’ve got to have flawless intelligence going in. And number three, execution has to be flawless as well. When you come in and take somebody down you don’t have to shout at them, you don’t have to push them to the ground. A gun in the face is plenty, believe me. They didn’t even do that, they were professional enough to lower them.”

Fred said the turning point came when quickly. “They asked me if I had a weapon on the site and I said, ‘Oh yes, I do, I have my navy officer’s dress sword.'” From the time they saw the sword, Fred said, “the officers treated us even less unfriendly.” The sword had been awarded to him at Annapolis for excellence in engineering. He got it out, inspected the blade, twirled it snappily, and sheathed it.

Fred entered the Navy in 1956 as an enlisted man, then aspired to become an officer. Rep. John Conyers backed him and in 1957 he entered the Naval Academy. Because he read, spoke, and wrote Russian (as the son of Ukranian immigrants from Detroit) and already had experience in submarines, Fred “got asked to participate in some special activities,” and didn’t graduate with the class of ’61. He retired in 1972. “All my friends and all my operations have been with submarines and SEALs,” he says. “Matter of fact, one of my best friends, George Worthington, is head of worldwide operations for the SEALs.”

Fred said he’d recently called Worthington seeking “help for one of our brethren who’d got in trouble with his CO -a SEAL. But George didn’t want me to get involved with it and I said ‘okay.'” Fred said he knew several other admirals and politically powerful men from his Navy days. “John McCain and Chuck Poindexter were in the class of ’58, and I got to know them by accident. Stepping on their shoes. I had to polish McCain’s shoes for three weeks and Poindexter’s for a month. Never thought I would ever hear from those two guys again, to be honest with you. I’ve got Poindexter’s signature somewhere -they put me on report and it’s his signature on the report.”

Fred resumed his favorable review of his own bust. “In a military take down I don’t even ask for them to open the door. I just give the order ‘Open fire’ and we just hit this place with guns that can shoot 6,000 rounds a minute. Fuel-air grenades that when they go off they kill everybody in the building. And then we follow that up with some stun grenades and thermite grenades and make it really hot inside in case someone did survive. And then we come in. “A paramilitary takedown is one step down, without all that ordnance but still pushing people down when they catch ’em and putting guns to their head. A paramilitary bust leaves you with the feeling that you’ve just been assaulted by storm troopers and everyone’s pissed off, including the media.

“When it’s a professional bust, the only thing you get pissed off about is that they took your weed. I’m pissed off that we don’t have any medicine to provide to over 100 people. I’m not pissed off at the DEA officers. In fact, it’s a pleasure to watch professionals in action. They had some kind of cutters, several boxes of tools in plastic carryalls, and investigation kits, fingerprinting kits. They fingerprinted the place and maybe even left audio devices and video devices behind.” Fred said the DEA agents “got chairs for us to sit down in. They loosened my handcuffs when they realized I had arthritis. They let us go to the bathroom. They didn’t browbeat us or attempt to shout at us and make disparaging remarks. One of them asked me if I’d done any intelligence work and I told him yes, I’d worked with Admiral Worthington and so forth. He asked me my rank and I told him that was classified. He said he’d never heard of a classified rank and I said that under the new anti-terrorist rules you’re not allowed to reveal it.

“They attempted to find out how much business we were doing here. They came in with the impression that this was a big moneymaking operation. They didn’t realize the problem we had with crops. They didn’t realize that growing in rock wool is very demanding, you make one mistake and you lose a crop… The cost of hydroponic nutrients is quite high. The really good ones are from Canada, and because of the trade imbalance, the cost is going up… We had a problem with mites that almost destroyed an entire crop. I mean, at first we just stood there and watched the little bastards at work. But we got smart about it. Between each crop we had sufficient time here to bomb the room but not the crop with insecticide bomb, a special cytotoxin that kills them. You don’t see them for months. You don’t want to use it when the plants are in bloom…

“We’ve had problems and overcome them. We’ve learned so much, this crop would have been the pinnacle of our expertise. We were finally at the point where we’re producing a reasonable crop. I pointed out to these officers that really what they were taking away was medicine for Iraqi war veterans, Vietnam War veterans, and disabled people. I said, ‘you know, you don’t realize what harm you’re doing.’

“The agent in charge was named Brian Casey. He pointed out that while we legitimate patients might constitute three percent, the total market out there was 97 percent people who were abusing it. I said, ‘Well go after the 97 percent.’ Fred laughed at his own opportunism, said he didn’t tell Casey that the numbers seemed like the reverse of reality -97 percent of cannabis users have valid medical reasons. “Casey said there was nothing under federal law that legitimized medicinal marijuana and he advised people to use Marinol. I laughed and Eric gave him the scientific reasons.” The DEA agents seemed “vastly uninformed with respect to medicinal cannabis,” said Fred.

There are 11 Vietnam and Persian Gulf vets in Fred’s union. He had been trying to organize a support group for Iraq war vets who needed more help than the VA could provide, and said he’d been in touch with eight men who were interested. “Veterans have been through gamut of having been subjected to almost every medication out there. Cannabis does the job so much more efficiently with less problems, societal effects, nausea, vomiting and so forth. But I do not think the DEA agents are cognizant of that.” Fred said that Agent Casey’s line about three percent of patients being legitimate seemed like disinformation disseminated at a training.

“At some point they realized that we only had two thousand dollars in cash and it was for our PG&E bill so they gave it back. I believe Agent Casey surmised that this actually was a legitimate medical grow. If this guy was wearing an Italian suit he could be on the cover of Gentleman’s Quarterly, he was that good looking. I realized he had his thing to do, to uphold the laws he’s been sworn to uphold. And I had my thing to do, I got my veterans to take care of, my disabled people to take care of. Where can we find some middle ground? He said he wanted names of meth labs. I said, ‘If I knew of a meth lab, it would be on your desk in a heartbeat.’ He said, ‘Good for you.’ So he knows right off the bat that we have no use for meth labs, we have no use for pill pushers of the type that profiteer, and we have no use for the street-drug people that have profaned the name of medicinal cannabis.

“He asked me if I’d help them penetrate the Compassionate Caregivers club. They wanted to know where the money was going. I said basically all I know about it is there’s some people who are pissed off at them occasionally, but I hadn’t had any problems with them. They wanted to know who was pissed off enough to give them more information. I couldn’t come up with anybody.”

Fred acknowledged having sold part of his crop to a dispensary when the union had fewer members.

“When we did sell at one time to the clubs, our stuff was always 5-star. Part of our secret was hormones and catalytic boosters to increase the uptake of nutrients. The plant will continue to produce resins and oils continuously, all you’ve got to do is feed it. In rock wool you can get away with that. In soil you reach a saturation point but in rock wool it’s continuous drainage. So you can continue to feed that plant and it will grow and achieve medicinal grade.

“The DEA said they were going to assay what they took from us for THC. So I’m gonna find out. They got some that’s three weeks into bloom and some that was fully. I’m sure it was up to 12%. I’m going to ask them to give me that figure. Of course, if they give me an indictment they will, it’ll be in there…

“Casey said he doesn’t want to see any kids using cannabis. He has a baby and he doesn’t want his baby to grow up to use drugs. I said, ‘Look Casey, you and I are in that ballpark. I don’t believe that cannabis should be legalized. I think that medical cannabis should be legalized and administered so that kids don’t get it. I don’t think a kid can perform at 100% efficiency after he’s been out smoking dope or using alcohol. It’s just a physical impossibility. I want to keep it out of the hands of children because it’s a medicine. It is not a recreational drug… You have to get to the point in life where you can understand what its use is and how it affects you. Without that basic perception and understanding -what we call the age of accountability in the Mormon church- you should not be using cannabis.”

A Ukranian mormon?

“In the old country some of my family were Jews who changed over to Catholicism and Ukrainian Baptist. I grew up on both sides. When I decided to sober up -to clean up my act with alcohol- a friend of mine talked to me about the Mormon church. I realized that my family had been stunted because of my alcoholism. There had to be something out there that would give us an anchor and some hope and allow us to restart in another direction. And I was glad there was because right off the bat there was a class at the church about benching children -time-outs- instead of beating them. I had been raised in a family where you beat children… Instead of Sunday school they had a course taught by this psychologist. It paid off because as soon as we started doing that instead of spanking them, “You sit down until you’re ready to talk to me about why you’re misbehaving.” And they couldn’t leave that chair, they couldn’t play, they couldn’t watch TV. The results were amazing.

“When I married my wife she had three children and then we had three more children. And they all hated me. I was an alcoholic who used the military tactics that I’d been taught all my life to raise a family. It doesn’t work, that ‘my way or the highway’ type of thing. With no middle ground, children rebel. I was able to salvage good relations with three out of six. Thank God we’re all today on speaking terms.

“Once I started sobering up and they saw a different side of me they began to realize there was some hope for the old bastard. I had my last drink in 1979 and I’ve been sober ever since. I’m still active in AA today. I have a lot of people I sponsor.”

Fred said he wished there were more cannabis-friendly meetings.

“AA tries to separate the two. I told my sponsors that there was only one way I could have gotten sober without killing somebody. Coming back from the military situations that I was in there was a lot of built up anger and wrath inside of me and I took it out on my family. I finally was able to get one year of sobriety and then two. It took me three years after I joined the Mormon church. But nobody ever came up to me and said quit drinking or quit that damn cigarette smoking. It took me a long time to get rid of those addictions.

“I started using cannabis in 1976 when I quit drinking. By the grace of God, I was a block away from a place called Bob’s Rent-a-Garden in San Jose. He was a cannabis user himself and in the back of his rent-a-garden I grew cannabis for myself and we smoked three or four joints a day and I was able to come down from alcohol without killing anybody or harming my family or harming myself. It was just like landing with what they call a 100-foot canopy parachute. You land so soft you don’t even know you landed. And I was able at that time also to go to AA meetings. Cannabis is what kept me from going back to alcohol. No question about. I was able to level out. And I was going to church as well. I really wanted to change my life. I realized that I was in a spiral. I just wanted to change my life. You come to a point where you realize that something’s got to change and it’s got to be you. Nobody’s going to change around you to make room for you. My wife gave me an ultimatum: straighten out or fly out, so I had no choice.

“Once I straightened out I was able to get jobs and get back on my feet and resurrect my life. My last civilian job was as a stockbroker with Morgan Stanley. I was trained in the South Tower of the World Trade Center. I was supposed to go back and work on the 44th floor of the South Tower. I have strong feelings about it because I knew people who were in the tower at the time. My son-in-law had just received a job offer to work in the North Tower. He was supposed to come in that day the lady who hired him said don’t bother because she wouldn’t be in till Wednesday.

“That weekend was our naval academy 40th anniversary celebration. I was supposed to go. A friend of mine had booked a block of seats on the plane and there was an extra seat coming back, so I bought a one-way ticket on Jet Blue to go there and then I’d have a free seat on the way back. At the last minute something came up and I canceled. I would have been coming back on the plane that crashed into the Pentagon. That was the third time in my life that I’d cheated death that way…”


What happens next?

The DEA gave Fred reason to hope that no indictment will come down. “One of the things they told me was, ‘You want to save yourself some money, don’t bother getting an attorney because this is going to go away.’ I don’t think they want to arrest a guy with an honorable discharge who’s going to bring in some admirals as character witnesses. I told them, I fought for this country and I bled for this country. I spent 93 days in Bethesda Navy Hospital. They put me back together so they could send me back into submarines. That’s how desperate they were for people. They may have had manpower but not enough skilled manpower, and there’s a difference. The entire class of 1980 had to go into submarines. “I said I’d be willing to help them with anybody who’s a crook in this business. But I’m not going to turn in a fellow veteran and they recognized that right off the bat. There are some thieves in this business and they’ll get taken down sooner or later. But most of the people in the medical cannabis movement are pretty much straight arrows and honest. There’s a few crooks. I know em, I’ve met ’em, I’ve been on the losing end a few times. But they’re few and far between and that’s why it’s a good movement to be in as far as I’m concerned. To be able to be of service to other people. That’s where I’ve derived most of my satisfaction over the last few years. Seeing people all of a sudden be happy. Seeing people who when they walked in the door were pissed off, angry about the world, sit down and socialize with you and their attitude changes completely. I also see it with the people coming back from Iraq. I didn’t get into this too much with Agent Casey because I didn’t want to give him names but there’s a lot of people who come back from the Iraqi war who are really bitter. Some of these people will never get the psychiatric help that they really need. The rules are that you get 90 days of psychiatric help and if you qualify for longer you have to show reason. The point is, without some sort of support group other than the VA system these people are gonna be handled the same way we handled the Vietnam veterans and we’re going to have another horde of homeless people out on the streets.”

Veterans hook up with Fred through mutual friends, word of mouth, the AA grapevine. “They go to the VA and they run into someone who knows me. Or they run into Paul at the Divisadero club, he’s a Vietnam veteran. Word of mouth is how I like it. The veterans have been prescribed drugs like morphine sulfate, Vicodin. Our first grower was a perfect example. He was misdiagnosed by the VA. They fed him a whole bunch of drugs that damn near destroyed his pancreas. Then they discovered that he really had pancreatitis all along! They told him well, you’ve got so many years to live, and they gave him a bunch of new drugs. With pancreatitis one of the symptoms is severe back pain. He treated that with Vicodin, when that ran out he tried to get Oxycontin on the street. Cannabis wasn’t strong enough for him. As a consequence he became more and more strung out on these other drugs and it affected his personality. One day after we’d raised some financial questions he just walked out, left us with a dying crop. I was thumbing through the book real quick. The thing to do with mites is just get rid of the plant entirely and hope that it’s only on that one plant. To get rid of them entirely, if you could afford it, you put in huge air conditioners and grow your plants at about 60 degrees. At the same time you heat the nutrient solution. That way you have where they call it ‘the feet is warm and the shoulders is cold.’ The mites can’t take the cold. They head for Florida, man. So that was our plan. The feds were half-right when they called this ‘a sophisticated operation.’ But we had nowhere near the money for a really sophisticated operation. If we had, we could have brought the price down to about 100 bucks. And made enough to get by on.”

The raid listed till about 4 p.m. “The TV cameramen came, the sheriff’s deputies, a woman from the DA’s office, just like checking it out. ‘What should we do today?’ ‘Let’s go to the bust…’ The only agent I had any trouble with,” Fred said, “was one who kept trying to put words in my mouth. Like he says, ‘How long you been selling marijuana to the clubs?’ I sez, ‘The reason we’re here is because we don’t want to deal with the clubs. We want to deal with the patients directly. The clubs would only pay us a certain amount of dollars and the patients will pay us an equivalent amount. But the clubs will mark that up and the patients will have to pay it.”

Fred said he had notified the landlord. “We need a month to get out. I’m going to get a team of people in here and move stuff out and then we’re going to have a going away party… We had just upgraded the electricity, that’s what pisses me off. We’d been blowing fuses all the time. One of our friends is a master electrician and a good one. Now it’s upgraded and we gotta leave”

When he drove home to San Jose after the bust, Fred said, “My wife told me, ‘I’m glad you’re out of the business.’ My sister said the same thing. The tension had been so dramatic… My wife is a live-in babysitter for my two grandsons, two wonderful boys. They just love grandma and we love them. I get down to see grandma on the weekends and my son-in-law and my daughter take off for Crescent City. Last night the youngest got up at 9 o’clock and headed for grandma’s bedroom just as I was heading for grandma’s bedroom. Well, guess who got to sleep with grandma last night?” This boy is just beautiful. He has the Russian features, steel blue gray eyes… And so, these kids and my wife made me think: ‘What am I doing? Where are my priorities?’

“It could be that this is a blessing in disguise. Not that I’m going to stop doing what I was doing, but it can be done on a smaller scale. Within reason. Like agent Casey said, ‘This guy Larry’s on my radar screen.’ I said ‘How did I get on your radar screen?’ He didn’t answer that question. I said ‘I’m gonna stay off your radar screen.’ I asked him, ‘if I had grown less than a hundred plants would you be here?’ He went like this [makes a dismissive non-verbal gesture with hand]. He didn’t come out and say ‘No, absolutely not,’ but…

Fred estimates the cost of prosecuting him would be well over a quarter of a million dollars. “For what?” he asks rhetorically. “‘This guy’s got zero assets, we’re not gonna take his trailer. His navy dress sword?’ Come on The DEA is going to have to start diverting their resources to some important stuff. If they don’t they’re gonna catch hell from the citizens who are gonna wake up and say ‘Wait a minute, you busted these legitimate cannabis guys and these guys are walking around free making meth in my neighborhood?’

‘Keeping medical cannabis illegal costs too damn much. Society may not be that rational, but that’s our job, to explain that when you really boil it down, does it make any sense to prosecute anybody who’s growing for legitimate patients? We could have music programs back in our schools” Fred related his thoughts about the bust in early April. On June 18, according to Mike Mack, Fred was rear-ended by a big-rig in San Jose and died in the hospital the next day.

FRED GARDNER can be reached at journal@ccrmg.org


















Fred Gardner is the managing editor of O’Shaughnessy’s. He can be reached at fred@plebesite.com