The former head of Berkeley’s Medical Cannabis Commission pleaded guilty Thursday to three felony counts, including one in which he conspired with a Berkeley attorney to conceal payments he had received illegally.
Dan Rush, 56, who lived in Oakland but now lives in Crescent City, admitted in federal court 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, according to a press release from the U.S. Attorney’s office.
Rush’s guilty plea follows a guilty plea of Marc TerBeek, 50, a Berkeley attorney, in February. The two worked together to conceal the true purpose of a $500,000 loan made by a marijuana entrepreneur, among other illegal activities, according to authorities.
The press release does not name the marijuana entrepreneur, but court documents said he was Martin Kaufman who was connected to the Blüm dispensary in Oakland. Kaufman’s wife, Salwa Ibrahim, was one of the applicants for a new medical cannabis dispensary in Berkeley. The City Council, however, did not select what would have been the Blüm Boutique at 2067 University Ave.
In the indictment filed against Rush in 2015, federal authorities charged him for offering special treatment to one of the applicants for Berkeley’s fourth dispensary spot. But Rush did not plead guilty to that charge.
Kaufman lent the funds so Rush could convert his long-time family home at 472 W. MacArthur Blvd in Oakland into a dispensary.
When Rush had difficulty paying back Kaufman’s loan, he offered to undercut his own union’s efforts to unionize Kaufman’s business in exchange for forgiveness of $250,000 of the loan, according to federal documents. Rush also used his union position to recommend Kaufman’s business to government officials.
Before that happened, however, Rush had been paying Kaufman $3,000 in monthly interest payments. TerBeek helped Rush 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 the press release.
In exchange for TerBeek’s help, Rush recommended his services to various medical marijuana employers that the UFCW was trying to unionize, according to the press release.
“Rush did not disclose to the clients or the UFCW that he was receiving significant sums of money from TerBeek,” according to the press release. “This kickback scheme violated Rush’s duty to provide his honest services to the UFCW.”
Rush pleaded guilty 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 faces 30 years in prison and a $565,000 fine. U.S. District Court Judge Haywood S. Gilliam Jr. will sentence Rush on Oct. 2. Rush is currently free on a $100,000 bond
TerBeek pleaded guilty on Feb. 16 of one count of making a payment to a union employee and one count of willful violation of anti-structuring regulations. Judge Gilliam is scheduled to sentence TerBeek on Aug. 21.
Rush served on Berkeley’s Medical Cannabis Commission from about 2011 to 2016. City Councilman Kriss Worthington had appointed him.
The charges against Rush stretch back to activities that began 13 year ago. Read more details.