'Nothing Convenient': Two SF convenience stores operated illegal gambling dens, city attorney says

SAN FRANCISCO (KRON) – San Francisco City Attorney David Chiu filed a pair of lawsuits against two respective convenience store owners on Thursday. Chiu’s lawsuits allege the two ran their own separate illegal gambling dens, which also ran other forms of illegal activity, including fencing operations and drug distribution. 

“For law-abiding residents, there is nothing convenient about these stores,” Chiu said. “These two stores are endangering the safety, health, and welfare of their Tenderloin neighbors. We are asking the Court to spare the community from further harm and hold the owners accountable.”

SF Discount Market

SF Discount Market is a convenience store located at 238 Leavenworth Street in the city’s Tenderloin district. “SF Discount Market looks like a typical convenience store from the outside but has housed substantial gambling and fencing operations inside,” the city attorney’s office said.

In April, the owner, who also owns Habibi Lounge, a San Francisco hookah bar, called the San Francisco Police Department because someone attempted to sell him his own hookah pipes engraved with his lounge’s business name. “This incident demonstrates that the SF DISCOUNT MARKET is known as a place to fence stolen property,” the lawsuit alleges. 

The following month, an undercover SFPD officer went into the store with “two Gucci brand perfume boxes” that the officer presented as stolen. “Despite this, the clerk purchased the boxes,” the lawsuit said. 

In September, SFPD obtained and served a search warrant at SF Discount Market. Police found “significant evidence of criminal activity,” including the following:

• Nine gambling slot machines
• A high-capacity magazine for a Glock handgun with additional ammunition
• 83 grams of cannabis
• Small plastic bags commonly used to sell cannabis
• $10,054 in cash and a digital scale
• Cartons of cigarettes from other states
• 17 iPhones
• Products with original price stickers from stores like Walgreens and Sephora

“SF Discount Market also sold drug paraphernalia, including straight glass pipes commonly used to smoke methamphetamine and crack cocaine, and sheets of aluminum foil commonly used to smoke fentanyl,” the lawsuit alleges.

Tenderloin Market and Deli

Tenderloin Market and Deli is located at 200 Leavenworth Street in the city’s Tenderloin district and has been operating since 2013. 

In April, an SFPD officer entered the store and saw “patrons playing slot machines” while an employee was present, watching them, the lawsuit said.  

SFPD then pursued a fugitive into the store a few months later and “again, saw patrons playing slot machines,” the city attorney’s office wrote. 

In September, SFPD obtained and served  a search warrant and recovered the following: 

• Seven slot machines
• Loaded firearms with a loaded magazine
• $6,153 in cash and a money-counting machine

“The market also sold drug paraphernalia, including straight glass pipes and Brillo pads, commonly used to smoke methamphetamine and crack cocaine,” SFPD reported. 

Lawsuits

SFPD said, “The drug paraphernalia sold at both markets were in plain view to anyone who entered the stores,” which, according to PD, was illegal because “Businesses that sell items defined as drug paraphernalia must keep the items in a separate room and ensure that minors do not enter the room without a parent or legal guardian.”

According to the Gambling Control Act of 1997, legal gambling is limited to “licensed California Lottery retailers, card rooms, casinos operated by Native American tribes, and race tracks.” 

Chiu’s lawsuit alleges that the two defendants created a public nuisance, contributed to illegal activity in the Tenderloin, and profited from operating businesses or leasing properties used for gambling and other illegal activities. The lawsuit against SF Discount Market also alleges that the defendants used the store as a fencing operation and illegally sold cannabis.