Followup: Felony charges filed in North Delridge marijuana raid, alleging multi-million-dollar operation

(WSB photo: June 3rd raid at 28th/Yancy)
Six months after police raided an indoor marijuana farm in North Delridge, the King County Prosecuting Attorney’s Office has charged its owner with three felonies. This was originally reported in a Seattle Times (WSB partner) story that a WSB reader pointed out to us; we have since obtained the court documents.

After the June 3rd raid at the building alongside Longfellow Creek at 28th/SW Yancy, we spoke by phone with owner Matthew Segal, who told us in that interview that he had been growing 2,500 plants, of which police allowed him to keep 45. At the time, he owned two medical-marijuana dispensaries under the Rain City name, and told us he had been growing at the North Delridge site for three years (records showed he had bought it for a million dollars last March). Police said they also raided two houses, one in the Morgan Junction area.

The charges filed Wednesday against Segal and four others, all described as having no criminal history, allege violations of the state’s Uniform Controlled Substances Act – three charges against Segal, one each against four people alleged to have been working for him, “paid to maintain the marijuana grows, receiving salaries and a share of profit from the sales.”

The documents say allege Segal was illegally growing marijuana “to supply” his two dispensaries, in violation of state laws limiting a “collective garden” to 45 plants. Also, the charges allege, “Over 90 pounds of processed marijuana was found, totaling a street value of over four million dollars.” Segal’s accounting records, prosecutors allege, “show deposits over a two-year period of over $700,000 … The defendant’s conduct in running a for-profit, illegal marijuana business strays far from the legislative intent of allowing medical marijuana dispensaries.”

The investigation background accompanying the charging documents say a federal Drug Enforcement Administration task force tipped SPD to Segal’s operations, mentioning three houses – two in West Seattle – as well as the SW Yancy site, for which a state marijuana-producing license was being sought at the time, with an application filed in May. He also was reported to have been seeking a processing license for a location in South Park.

On June 2nd, police got a search warrant for the SW Yancy site and a house in the 6500 block of 44th SW, as well as a house outside West Seattle; they reported detecting the smell of marijuana from outside all three locations, but not from the other West Seattle house mentioned to them. They carried out the warrants the next day. At the Yancy site, they found 32-year-old Jeffrey Borgueta, one of those who is also now charged; he is reported to have told them he worked seven days a week growing marijuana at that location, which cleared a million dollars in 2013, and that overall the Rain City dispensaries had 5,000 prescriptions and almost that many plants.

After their search, police wrote, they had found 2,275 plants and 90 pounds of processed marijuana worth an estimated $3.7 million. Segal arrived with a lawyer while police were there; they wrote that he “appeared to know that his marijuana grow operations were illegal.” Segal and Borgueta were allowed to pick out which 45 plants they wanted to keep but were not arrested, and the documents say both left before police were done “gathering evidence.”

At the 44th SW location, police reported finding 272 marijuana plants worth an estimated $400,000 and two sisters who “operated” the location as employees of Segal, 38-year-old Stephanie Cameron and 24-year-old Katarina Anderson, both also now charged with a felony drug violation.

Police took a computer from the Yancy site and got a search warrant in July to go through it. It included records of the operation, they say, and showed that people using it had frequently visited a website that provided business software for the marijuana industry. The records included information on a bank account they allege was used “to deposit suspected proceeds from the illegal sales of (this) marijuana” and possibly other transactions such as the $1 million purchase of the Yancy warehouse.

Besides the Yancy and 44th locations, the police narrative mentions other alleged West Seattle connections to the operation: The fifth person named in the charges, 32-year-old Kevin Nortness, who allegedly worked at the non-West Seattle location raided by police, is described as a West Seattle resident. The documents also mention a West Seattle home raided by police in November, saying they found 147 plants and $300,000 in processed marijuana there, and that they had multiple reasons to believe the growing operation there (but not the house itself) was owned by Segal. (We don’t know if any charges have been filed in connection with that raid; the county court system is down for its routine overnight maintenance.)

Segal and his four co-defendants are due in court to answer the charges on December 24th. The Seattle Times story quotes a lawyer for Segal as saying he has sold one of his dispensaries and is hoping to transition into the recreational-marijuana industry.

14 Replies to "Followup: Felony charges filed in North Delridge marijuana raid, alleging multi-million-dollar operation"

  • John December 13, 2014 (5:49 am)

    Awesome reporting, WSB.

    Unregulated medical marijuana needs to go.
    Unbelievable.

  • Heather December 13, 2014 (5:59 am)

    Wow. Where the other individuals prosecuted because, although employees of a business, they received a share of the sales? Thus indicating they had knowledge of larger and illegal production? I find it interesting that employees were charged. (granted each house produced way over the allowed 45 plants).

    • WSB December 13, 2014 (6:41 am)

      Heather – two of them are alleged to have told police that they received a share of the profits from what they were responsible for growing, according to the documents, but the prosecutable alleged offense for all is described as “participat(ing) in the illegal manufacturing, processing, and selling of marijuana.”

  • SaraBlue1 December 13, 2014 (9:18 am)

    Were the house(s) included from the raid in Nov the ones off of Rose? I wondered what happened with that. Such a large police response! So interesting how connected and organized the business is…

  • Elle Nell December 13, 2014 (10:31 am)

    Perfect timing! Now the state might have enough plants to feed the licensed pot shops that have not had enough product to sell and therefore not pay state tax… Hmmmm sounds pretty convenient to me… Power to the people!

  • SartreShamu December 13, 2014 (1:40 pm)

    This is a regulatory and compliance issue, not a drug issue (as marijuana is decriminalized in WA state). While I acknowledge the conflict with federal law, I would prefer the DEA stay out of our state’s business when it concerns marijuana. What a reprehensible agency, oftentimes no better than the criminal organizations they ostensibly target.

  • desa December 13, 2014 (10:19 pm)

    Yep SartreShamu, he should be able to beat this wrap, and if he can not enter the “more” legal recreational market, he will be forced to go underground or change professions.

  • Dogmomjulie December 14, 2014 (2:57 am)

    @SS: well said!! I may not partake myself, but leave the growers alone! Making it a compliance issue says that the police (or their backers) aren’t OK with it. Well, the VOTERS are OK With it. So, back the truck up!

  • furor scribendi December 15, 2014 (10:25 am)

    Great news! Bust them all. Next: repeal state law to comply with Federal law.

  • Lyle December 16, 2014 (11:34 pm)

    So 90 pounds is equivalent to $3.7 million? That’s $41,000/lb or over $90/gram LMAO. Pay attention folks. Prime example of media blowing smoke up readers’ a–es.

    • WSB December 16, 2014 (11:56 pm)

      Extraneous comma before “and” has been removed; thank you. This is the exact quote from the probable-cause document, page 3: “The grand total of marijuana plants in this warehouse was 2,275, and the total weight of processed marijuana was over 90 pounds. According to dozens of marijuana growers whom I have spoken to within the past year, their harvested marijuana typically sells for $3,000-$5,000 per pound if sold in bulk. The total estimated street value of the marijuana in this operation was approximately $3,772,000.”

  • Lyle December 17, 2014 (12:05 am)

    WSB, your math (or math from the PC doc) is incorrect even on the high end of the range of $3000-$5000. 90lbs @ $5000/lb is $450,000. Rec shops currently buy in a pound at that amount but in medical shops they typically buy in at around $2000. Just keeping info accurate for the readers.

    • WSB December 17, 2014 (12:20 am)

      Lyle, it’s not my math. Direct quote, and again, the value quoted appears not for just the 90 pounds, but rather for the 90 pounds plus whatever the 2K-plus plants would have yielded. If the value is erroneous (I don’t know how many pounds that many plants would yield), I hope the defendants’ lawyers will bring that up in their defense, though the charges are not contingent on the value but rather, to some degree, on the number of plants, with the contention that 45 was the maximum allowed.

  • Lyle December 17, 2014 (12:26 am)

    Gotcha

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