After years of litigation, hundreds of thousands of dollars in documented public expenditures, and what defense counsel estimates ultimately exceeded $1 million in taxpayer-funded legal costs, the Yolo County District Attorney’s Office failed to recover a single dollar from retired public servant Wayne Schell.
Judge Samuel T. McAdam found Schell not liable in a sweeping civil enforcement case that accused him of helping operate an illegal cannabis manufacturing enterprise, ending what defense attorney Mark Reichel describes as a six-year ordeal that consumed Schell’s retirement savings while exposing what he calls a lack of meaningful oversight within the District Attorney’s Office.
Unlike a criminal prosecution, the action was brought as a civil enforcement case by the District Attorney’s Consumer Fraud and Environmental Protection Division, allowing the government to seek civil penalties and equitable relief under a preponderance-of-the-evidence standard rather than the higher criminal burden of proof.
Attorneys David J. Irey, Rachel Hilzinger, Rachel Muoio and Clara Morain Nabity represented the DA’s office throughout the litigation.
“This was a huge mistake by the DA,” Reichel told the Vanguard. “They gambled away a million dollars of taxpayer money to unjustly hound a guy because they have no supervision. They got not a penny from him and burned the taxpayers’ money like it was paper money. Unfortunately for my client, Wayne burned real money, and he didn’t have much to begin with. Horrible way to spend your 80’s when you’re retired.”
The case began in November 2022, when the Yolo County District Attorney’s Consumer Fraud and Environmental Protection Division filed a civil action under California’s Unfair Competition Law against Schell, his son Darren Schell, and several business entities associated with a cannabis operation in West Sacramento.
Rather than pursuing criminal charges, prosecutors sought civil penalties, alleging unlawful business practices arising from environmental violations, tax violations, cannabis regulations and municipal code violations connected to an illegal cannabis oil manufacturing facility at 1800 Terminal St.
The District Attorney’s theory extended beyond those directly involved in the manufacturing operation.
According to the People’s closing trial brief, prosecutors argued Wayne Schell served as the CEO and essential leader of a single enterprise known as GVI, making him legally responsible for the illegal activities occurring at the Terminal Street facility.
The office argued Schell was the public face of the business, the “named CEO,” and a conduit through which illegal profits financed the development of a future legal cannabis facility.
The defense argued the opposite.
According to Schell’s trial brief, Wayne Schell was an 85-year-old retired public servant who agreed only to help his son navigate California’s newly-created recreational cannabis licensing system.
He maintained he had no involvement with the operations at Terminal Street and believed his son’s existing medical cannabis business was operating lawfully until law enforcement raids in February 2019.
The defense maintained that Schell’s responsibilities were limited to helping secure permits and licenses for a separate legal facility on Del Monte Street and that prosecutors improperly attempted to merge two distinct operations into a single enterprise.
Throughout the litigation, Reichel said prosecutors portrayed Schell as “the mastermind,” “drug kingpin,” a money launderer and tax cheat despite, in his view, lacking evidence that Schell personally participated in unlawful conduct.
“Their entire case they called Wayne the mastermind and drug kingpin and money launderer and tax cheat,” Reichel said. “In reality, Wayne lost a lot of money trying to help his son get into the business and never got paid a penny.”
The legal battle stretched on for years.
According to Reichel, the District Attorney’s Office litigated the case with extraordinary resources, assigning investigators, taking numerous depositions, retaining expert witnesses and purchasing deposition transcripts throughout discovery.
By contrast, he said, Schell financed his own defense using retirement savings, forcing the defense to forego expert witnesses, extensive depositions and many of the litigation tools commonly used in complex civil cases.
Settlement discussions highlighted the disparity between the alleged damages and the amount prosecutors sought.
According to Reichel, the District Attorney’s Office acknowledged in a May 2023 settlement proposal that cleanup costs associated with the warehouse totaled approximately $47,000, yet sought a $700,000 settlement from Schell. Reichel said the same settlement letter reflected that the county had already incurred more than $400,000 in investigative and litigation costs.
He further said prosecutors later advised him that in the two years between 2023 and 2025, they had now spent more than $700,000 on the case including trial preparation. The trial itself added significant additional expense, including testimony from the People’s accounting expert that he had billed approximately $35,000 to the District Attorney’s Office.
One of the most contentious episodes came during a discovery dispute in March 2024.
The District Attorney’s Office filed a motion seeking approximately $19,407 in monetary sanctions against Schell and Reichel after alleging the defense failed to timely respond to requests for admissions.
Deputy District Attorney Rachel Muoio declared the office had incurred those costs preparing the sanctions motion.
Court records show Judge David Rosenberg denied both the sanctions request and the underlying motion. Reichel said the hearing itself was remarkable.
According to Reichel, Rosenberg repeatedly questioned whether supervisors in the District Attorney’s Office knew the motion had been filed and sharply criticized one of the declarations supporting it.
“He asked both Rachels on the record, ‘Do your supervisors know you filed this motion? Yes or no?’ They answered yes,” Reichel recalled. “He held up Rachel Muoio’s declaration and said, ‘I have never seen something like this. I can’t believe you actually signed this. I would be embarrassed if I had signed this.'”
Reichel said Rosenberg repeatedly expressed disbelief that supervisors approved the filing before denying the sanctions request entirely. There was no court reporter for a transcript of the hearing, but the official minute order reflects that the sanctions motion for $19,000 was denied.
The case proceeded to a bench trial before Judge Samuel McAdam.
The People’s closing brief urged the court to hold Wayne Schell jointly and severally liable for violations occurring between May 2018 and February 2019, arguing GVI functioned as a unified enterprise and that Schell bore responsibility because of his leadership role.
The defense argued prosecutors had failed to prove Schell participated in, controlled or knowingly assisted the unlawful conduct and instead relied on expansive legal theories that did not fit the facts of the case.
Judge McAdam strongly ruled in favor of the defense, finding Wayne Schell not liable and awarding the District Attorney’s Office nothing against him.
For Reichel, the verdict represented more than a courtroom victory.
He said it exposed a fundamental failure of judgment within a public agency entrusted with enforcing the law fairly.
“Completely unsupervised, which caused a great injustice, and in an arrogant fashion, they couldn’t care less,” Reichel said.
He argued the case should prompt broader discussion about oversight of public litigation and the use of taxpayer resources.
“It was a nightmare that no one should ever have to live through again,” Reichel said. “To live a decent, hard-working life, pay your taxes, volunteer your time, do nothing wrong, and then spend the last six years of your life fighting a soulless and powerful government agency so that you don’t lose everything, having done nothing wrong, is the ultimate nightmare.”
“Something must be done to reshape that agency so that it never happens to anyone else again.”
The District Attorney’s Office devoted years to pursuing the case under California’s civil enforcement laws, arguing Wayne Schell was legally responsible for an illegal cannabis enterprise. After a full bench trial, the court rejected that theory as to Schell, ending the litigation without imposing any civil liability against him.
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Reisig was an anti-weed hard ass to the bitter and absurd end. Hopefully the new DA will join the 21st century on weed.
Unfortunately the DA’s office response on the racial bias ruling foreshadows more of the mismanagement practices into the future. I don’t expect any significant changes.
Give her a chance. She has multiple murder cases on her plate with some being high profile. I think the community would like to see some different management practices. She has two years to prove herself. I’ll be looking for incremental change.
The law says she will have a chance. However, that doesn’t mean she won’t be scrutinized and criticized when the conditions warrant it.