On Tuesday, the Oakley City Council denied an appeal by a property owner after receiving a $106k fine for an illicit cannabis grow operation. The property owner will now pay $2,963 each month over the next 3-years.
The move comes on the heels of a cannabis bust back in December 2023 at 404 Malicoat Ave—Oakley Police had been conducting surveillance at the residence on 6-7 separate occasions over several months for cannabis operations.
In the December 15 search warrant, the Oakley Police Department discovered a total of 1,075 marijuana plants. Appellant was cited for 1,069 plants since Oakley Municipal Code section 9.1.1230 (c)(2) allows for up to 6 indoor plants per parcel.
Oakley Police also obtained PG&E records showing high energy usage with multiple mobile payments which were made by the property owner which include:
- Nov 26 – $10,998
- Nov. 15 – $2,993.08
- Nov. 7 – $3,094.96
According to the city of Oakley, The email address associated with the mobile payments was the same email address that was provided to Code Enforcement staff on December 27, 2023 by Appellant when requesting copies of notices be emailed to him. Numerous email exchanges with Code Enforcement staff have occurred to and from Appellant using this email address. Through an open-source investigation performed by Oakley PD it showed that the email address belonged to Appellant.
On December 15, 2023, Code Enforcement and Building Department staff performed an inspection of the home and observed extensive Building Code and Health and Safety violations. Personnel from PG&E turned off power to the home and the property was red tagged by Code Enforcement as unfit for human occupancy due to unsafe electrical and building code violations related to cultivation of marijuana.
There were two occupants inside the home when the search warrant was issued, one which was later identified by Appellant as being his tenant.
After receiving an appeal for the fine, on April 16, 2024, the matter was heard before an administrative hearing officer.
At the administrative citation hearing, it confirmed the appellant is the property owner who lived in Burlingame and purchased the Oakley property as a rental investment. The appellant claimed he did not know about the marijuana cultivation at the property and that the tenant visits him in San Francisco and makes cash rental payments to him. Further investigation showed the appellants email was tied to the PG&E bill and a vehicle at the location of the home. Documents show the appellant purchased the property $135k over its list price.
During the hearing, it was presumed the property owner had knowledge of the code violations. The decision held that the citation is sustained, the appeal is overruled, and the fine is approved. On May 15, 2024, a request for appeal of the hearing officer’s decision was received.
The City Council will now review the written record and any oral argument, affirm, or deny the hearing officer’s Decision, and announce its decision.
Council Meeting Recap
The appellant asked the council for a fine reduction or allow for a structured payment to pay off the fine.
“I will pay the fine, but I am looking for a reduction or a payment plan,” said Lei Xingbo. “My house is being remodeled, I am getting a loan to get the house done.”
Councilmember Aaron Meadows asked if the house and code violations had been fixed.
Xingbo said the house was currently being tested for mold and next steps were getting permits to fix the house.
Meadows asked why Xingbo believes the city should reduce or come up with a payment plan.
Xingbo said he made a mistake and was asking for forgiveness.
“I do not have the money to pay the fine right now,” said Xingbo noting he had a load of $650k on the house.
Meadows said if they did a payment plan, they would be looking at approximately $9k a month.
Xingbo again asked for a reduction and payment plan to help him get out of the situation.
Councilmember George Fuller confirmed there were a 1,000 plants and a commercial cannabis grow inside the house which the applicant agreed.
Mayor Anissa Williams asked about how Xingbo didn’t know there was a grow inside the house.
Xingbo said he rented out the house to his “friend” and had visited the property twice once he bought the house. He admitted the marijuana grow but had never been inside the house.
“All of a sudden, the police come and sweep out the house when I got the call,” explained Xingbo.
Williams asked about the PG&E bill and how Xingbo paid a $16k PG&E bill on their behalf—noting he was receiving $3,500 for rent but now paying $16k in PG&E.
“I admit he is growing marijuana inside and he asked me to make the payment. I paid it. I suspected, but it already happened,” said Xingbo.
Meadows asked if there was a lease because the fine could be passed onto the tenant.
Vice Mayor Shannon Shaw said she read the lease and in the lease it says he could pass on the fees/fines to the tenant.
Shaw pointed out several inconsistencies while asking why he would make the payment if PG&E was under someone else name and if he went after his “friend” for the $16k. She also questioned once he found out about the grow, if he benefited financially from the grow.
Xingbo stated he did go after the PG&E bill but did not benefit financially from the marijuana grow. He also has not been paid back for the PG&E bill saying the tenant left after the raid.
Councilmember Hugh Henderson asked what the future plans were for the home and how long he would like to pay the $106k.
Xingbo said once its fixed, he would rent it out. He asked for a couple years to pay back the fine—he asked for 3-4 years.
Williams recommended since Xingbo is not local, he considers hiring a property manager.
Fuller stated he was in favor of issuing the full fine and up to the owner.
“I am from the old school, you go into an operation like that back in the day and they would seize your whole house and sell it out from underneath you,” said Fuller. “You could come to court and try and get the money back, but most of the owners did not.”
Fuller called the fine is a “gift” because based on the illegal cannabis commercial grow it could have been a felony.
Henderson was in favor of the full fine but urged a lien and recommended a payment plan no more than 48-months.
Meadows called the 48-months “very generous”.
Shaw was also okay with a payment plan but no longer than 3-years.
Meadows said at 3-years, its $2,963 per month.
Williams was also okay with 3-years.
According to the city attorney, to ease council concerns, if the owner fails to make payments, they have measure to take to ensure payment does happen and could “immediately enforce”. The agreement would also need to be signed within 30-days and if nothing is signed, an automatic lien could be placed on the property.
The council agreed in a 5-0 vote to uphold the decision and set up a payment plan for 3-years at a monthly payment of $2,963.89.
Oakley City Council Meeting
Full Agenda – click here
Previous Stories:
- May 27. 2024 – Oakley to Finalize Cannabis Ordinance to Increase Fines
- March 2, 2024 – Oakley Increases Fines for Unlicensed Commercial Cannabis Activity
6 comments
Good. Now do the one on 208 Douglas, and the other one on the other side of the creek. All owned by the same folks. Bankrupt these jerks. Don’t come to Oakley and crap all over the place. We may not be perfect, but don’t bring this element to a place where blue collar working folks just want to live in a quiet, relatively safe city.
I have to wonder why a city like Oakley approves a marijuana cultivation/sales factory ( complete with the money the permits bring them) and then goes after individuals who also grow. It seems like the City government is the drug kingpin knocking off the competition as opposed to being concerned about public safety.
It was an non-permitted commercial grow illegally sited in a residential neighborhood. Big difference.
Just to give it some contrast: The City of Oakley is in the weed business and are civilly fining the competition. Why aren’t they fining burglars? Thieves? Robbers? That says it all…
Using that logic, if the city permits restaurants (which it does) that puts it in the food service business.
Well, what a city permits IS what that city becomes. Some cities with car dealerships wind up cracking down on streets where cars for sale by private parties pop up as a means of ensuring more revenue from dealerships. Oakley got in the weed revenue business and then cracked down civilly on competitors. Not on burglars or thieves…just weed competition. I despise what drugs do to people, and the City is profiting from it.
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