Daniel Rush, a former union organizer and former chair of the Berkeley Medical Cannabis Commission, was sentenced to 37 months in prison Monday for his involvement with fraud and money laundering.
U.S. District Court Judge Haywood S. Gilliam Jr. sentenced Rush to that term even though his defense attorneys had argued that Rush actively helped drug addicts turn their lives around and that assistance would be nullified if he was behind bars.
Judge Gilliam commented that “the case reflects large-scale, long-lasting corruption on the defendant’s part,” according to a press release put out Tuesday afternoon by the office of U.S. Attorney Brian J Stretch.
Rush, 57, who now lives in Crescent City, must report to the U.S. Marshals office in Oakland on Jan. 15, according to court documents. Rush must also pay a $7,500 fine and will be subject to a three-year term of supervised release when he gets out of jail.
Rush pleaded guilty in June to one count of violating the Taft-Hartley Act, one count of honest services fraud and one count to commit structuring and money laundering. He had originally been charged in 2015 with 15 felony counts that could have brought him 70 years in prison and a $1.27 million fine.
In one of the original counts, Rush allegedly offered special treatment to an applicant for Berkeley’s fourth dispensary spot, but “demanded a well-paid job” from the applicant in exchange, according to the indictment. In a press release issued Tuesday afternoon, Stretch said Rush threatened the owner that if he “did not offer him a salaried job, with benefits, he would take adverse action against its application.”
Rush also admitted that he had used his position as the organizing coordinator for the medical cannabis and hemp division of the United Food and Commercial Workers International (UFCW International) Local 5 to enrich himself.
Rush borrowed $600,000 from marijuana businessman Martin Kaufman, who was connected to the Blum Dispensary in Oakland and was seeking to open another dispensary in Nevada. (It was Kaufman’s wife, Salwa Ibrahim, who was applying for a dispensary permit in Berkeley.) Rush wanted to use the money to remodel his family home at 472 W. MacArthur Blvd in Oakland into an assisted-living complex.
When Rush had difficulty paying back Kaufman’s loan, he asked Kaufman in 2010 to forgive $250,000 of it and said he would undermine his own union’s efforts to unionize dispensaries belonging to Kaufman and his business partner, Derek Peterson, according to court documents.
In late 2010, Rush started paying Kaufman $3,000 in monthly interest payments. Rush enlisted the help of Berkeley attorney Marc Terbeek to disguise those payments as “consulting fees” rather than loan fees, according to authorities. Rush also knew that the loan money “had been earned in connection with illegal marijuana cultivation activities and that therefore the money was the proceeds of unlawful activity,” according to prosecution documents.
TerBeek, who was charged with two felonies in February for his work with Rush, turned against him and assisted the prosecution in its case, according to court documents. He pleaded guilty and will be sentenced by Judge Gilliam on Nov. 27 at 2 p.m. He faces a possible six years in prison.
This article was updated after the U.S. Attorney’s office issued a press release.