Police have arrested MediLeaf co-founder Goyoko "Batzi" Kuburovich in connection with a multi-million dollar embezzlement “scandal” – however the charges are a separate can of worms from Kuburovich’s harried past concerning alleged illegal cannabis sales and money laundering.
“He was dirty a long time before MediLeaf,” said Kevin Keifer, a San Jose native who attended high school with Kuburovich in Campbell and later allegedly lost $50,000 to him in a Hawaiian real estate ponzi scheme. “People just feel ripped off by the guy.”
Kuburovich, a Gilroy resident and former co-director of medical marijuana dispensaries with locations in Gilroy, Morgan Hill and San Jose that were permanently shut down after law enforcement officers raided MediLeaf offices and founders’ homes in December 2010 – was taken into custody March 23 on accusations of real estate grand fraud. He was arraigned Friday on four felonies.
Keifer said he is “blown away” by the actions of his former close friend, who, he says, coaxed South County and San Jose residents to buy up property in Las Vegas, Hawaii and Arizona with promises of profitable returns. Most of that money, however, funded “lavish” parties at Kuburovich’s house, a $10,000 mortgage that Kuburovich “bragged about” to friends, an $80,000 car for his wife and a San Francisco condo purchased for his daughter with cash, according to Keifer.
“I’m so disappointed,” he said, still fired up with exasperation. “We did all kinds of things together. There was every opportunity to rip me off earlier. It’s like he was setting us all up for the big take.”
Jim Roberts, who is no longer Kuburovich’s criminal attorney but represented Kuburovich and MediLeaf last year, said most of the stories he’s heard surrounding the new charges are completely “inaccurate” and “out of context.”
“My understanding is that the two principal accusers both made substantial amounts of money out of the transactions they entered into with Kuburovich over a period of years,” he said Monday. “And when the economy turned, they didn’t make money. The types of transactions they’re claiming as fraud are the types of transactions they made money from.”
Requests for comment from Kuburovich went unanswered Friday and Monday.
Kuburovich is charged with four felonies after he allegedly conned a dozen South County and San Jose investors out of an estimated $1.3 million according to Victor Chen, Santa Clara County Deputy District Attorney who has taken over the case since early January.
“Everywhere I’ve been tracking this guy, he just leaves a trail of completely cheating people out of their life savings,” said Chen.
As for new or pending developments regarding alleged money laundering and illegal pot sales associated with Kuburovich and his now defunct MediLeaf business, the case is still under review for possible charges according to spokesman Sean Webby with the DA’s office.
The MediLeaf branch in Gilroy was forced to close Aug. 9, 2010 after an about $200,000 legal battle, which the City of Gilroy undertook against the medical marijuana dispensary that was operating without a business license.
Chen said Kuburovich – who along with his wife, Patricia, declared bankruptcy in 2010 – posted his $250,000 cash bail after officers arrested him March 23 outside his upscale home at 7170 Eagle Ridge Drive in Gilroy. Roberts said Kuburovich borrowed the bail money from his sister.
Chen’s phone line has since been “burning up” as more and more people identifying themselves as Kuburovich’s victims come forward, Chen said.
“From what they’re telling me, we’re going to end up filing additional charges,” he said.
One of Chen’s chief witnesses is a Morgan Hill resident and self-employed truck driver who lost his home to foreclosure after he was allegedly “blindsided” by Kuburovich’s business dealings, according to Chen. Another victim includes a Fire Marshal in San Jose, Chen said. Keifer and his wife allegedly lost $50,000.
Chen described Kuburovich as a “greedy” person who “will probably do prison time before giving back people their money.”
Dressed in a suit and accompanied by a man the court clerk identified as an attorney with the last name of Omori, Kuburovich made a brief appearance Friday morning for his arraignment inside Department 105 at the Santa Clara County Superior Courthouse in Morgan Hill. He is charged with one felony count of grand theft over $250,000, and three counts of aggravated white collar crime for allegedly stealing money while he was an employee of an Arizona-based real estate company called AZ Homes, according to Chen. If convicted for his misappropriation of funds in relation to AZ Homes – not including other cases that continue to surface – Kuburovich would owe “at least” half a million dollars in restitution, Chen said.
Kuburovich allegedly employs a “blueprint” for cheating clients out of their money, Chen said. The alleged swindle entices buyers to invest in Kuburovich’s real estate development ideas, which entails buying up empty lots and using the investment money to finance home construction projects, Chen explained. Investors are then presented with the option of reaping 25 percent of the profits once the house sells, or keeping a 15 percent slice of the interest at the time the property is sold.
Roberts said his understanding is that the principal investors, whom Roberts did not identify, “made money for years, and during the real estate meltdown, they didn’t make money. I don’t find anything unusual in that.”
Neither does Chen. But that’s not the case, he alleges.
“Normally, I wouldn’t file charges against someone who just loses someone else’s money,” said Chen. “The problem here is that the money people gave (Kuburovich), when he filed it, it never went into his business. It just went into his personal bank account.”
Since declaring bankruptcy in 2010, foreclosing on his Morgan Hill home and buying his Eagle Ridge home in Gilroy, Chen said Kuburovich has been dodging creditors by hiding his money.
Keifer said Kuburovich flew to Europe with his daughter to create a Swiss bank account. He also allegedly stashed money around South County – literally.
“He would wrap it in plastic and put it in a box. Who needs a bank when you can bury it in a field somewhere?” said Keifer. “If you wanted to make money, I’d follow Batzi around, and eventually he would lead you to something – because he’s not doing business with the banks.”
Kuburovich purchased his Eagle Ridge home in Gilroy under the name of a recently formed “shell” company (a company that exists but does not actually have any business or assets) called NATA Limited Partnership – which Kuburovich made his daughter, 22-year-old Kristel Kuburovich, a general partner of, Chen said.
“His credit was shot and he needed to buy property through another name,” said Chen. “He just filed for bankruptcy to keep upset people who lost their money off his tail.”
Kristel is not currently facing any charges in relation to those levied against her father, according to Chen.
Web searches for the NATA Company return one hit in Morgan Hill. The phone number listed on the website is not current, however. The company profile was last updated Oct. 20, 2011.
Calling NATA a “shell” company with no assets is “false” according to Roberts, who described the company as a “limited partnership that owns property.” Roberts is currently representing the company, which Chen filed a restraining order against, Roberts said.
Kuburovich’s two daughters, Kristel and her younger teen sister, are the owners of the company, according to Roberts.
Chen believes Kuburovich intends to obtain the legal services of Steven Manchester, a San Jose criminal defense attorney whose counsel costs a pretty penny, according to Chen. Calls placed to Manchester’s office Monday were not returned as of press time.
“Manchester isn’t cheap,” said Chen. “And (Kuburovich) is going to be paying for it with other peoples’ money.”
To Roberts’ knowledge, Kuburovich has not yet obtained an attorney regarding the charges levied against him for grand theft.
As evidence and documentation continue to unfold, Roberts says it’s “highly likely that the basis of these accusations will be unfounded, based upon what I’ve seen so far.”
Kuburovich’s next hearing is scheduled for 9 a.m. Friday inside Department 105 at the South County Courthouse in Morgan Hill, where Chen anticipates a handful of Kuburovich’s alleged victims will be in the audience.
Keifer assures: “A lot of us will be there.”