Dan Rush, the former head of the United Food and Commercial Workers Union’s Cannabis Division, has been indicted over allegations that he took bribes and illegally interfered with the unionizing process.
According to an criminal complaint affidavit filed with the Northern U.S. District Court of California, Rush took $600,000 in loans in 2010 from Martin Kaufman, who reportedly is involved with the MMJ dispensary Blum Oaklandm according to San Francisco Weekly. Kaufman is also a business partner and employee of Derek Peterson, the CEO of Terra Tech.
Once it became clear that Rush would not be able to repay the $600,000 by January 2015, he offered union favors and advice in exchange for the debt being forgiven. Part of what Rush offered in January 2014 was help to a Terra Tech subsidiary, MediFarm, in avoiding employee unionization in Nevada while simultaneously offering UFCW political support, where it was in the process of applying for MMJ business licenses.
“Then Rush proceeded to advise Peterson how Peterson could secretly tell MediFarm’s employees not to vote for UFCW affiliation,” the affidavit reads.
Peterson said in a statement late Thursday that he quickly realized that Rush was using his union position for personal gain, and immediately began cooperating with authorities.
“Once we became aware of Mr. Rush’s misconduct, we consulted with the Department of Justice, and under the guidance and direction of the FBI we assisted in their investigation,” Peterson said in the statement. “In partnership with the FBI, we were able to use money misappropriated from Mr. Kaufman’s trust as the subject in a corruption sting.”
Peterson added that “bad actors exist in all industries, and ours is no exception,” but that he hopes Rush’s actions don’t affect the entire cannabis industry’s reputation.
Rush also engaged in a kickback scheme with his attorney, Marc Terbeek, who helped him arrange for payments from yet another dispensary operator, Carl Andersen, who was paying Rush off for UFCW help. Rush further “demanded a secret interest in (Andersen’s dispensary) using Kaufman as a proxy,” according to the affidavit; the ownership interest was worth $51,000. Terbeek may also be prosecuted, the affidavit said.
The Terbeek kickback arrangement dates back to at least 2004, with Terbeek paying off a credit card for Rush in exchange for Rush funneling worker’s compensation cases to him through his union connections.
Rush has been fired from the UFCW, although it’s not clear when he was terminated, according to the San Francisco Weekly News.
If convicted on the two criminal charges he faces, Rush could be sentenced to up to 25 years in prison and be fined $265,000.