Deep Dives

How the Great California Dispensary Heist Went Horrifically Wrong

One of the most outrageous crime sagas of the 21st century starts with a severed penis...and only gets stranger from there.

How the Great California Dispensary Heist Went Horrifically Wrong

In the cold, predawn darkness of the Mojave Desert, the blood was pouring out. A man — his hands and feet bound tight with zip ties, his eyes blindfolded and his mouth taped shut — had just been held down by three unseen figures. They’d burned, beaten, stomped and tased him. Then they placed another zip tie around the base of his genitals and cut off his penis.

As quickly as it had all happened, he was left lying in the dirt 100 miles north of Los Angeles, surrounded by Joshua trees and desert brush, with the thrum of a distant highway drifting through the emptiness. He could barely move and was losing blood fast. His thoughts were simple: Am I going to die or am I going to live?

California’s marijuana business was good back in 2012. A dispensary owner, who will be referred to here as Simon Mitchell, had a busy but discrete operation in the city of Santa Ana. (Due to the graphic nature of the crime committed against him, the victim’s name has been changed.) Though legal recreational marijuana was still years away, laws passed starting in 1996 had opened the door for dispensaries like his to distribute medical marijuana.

But the business was still operating in a gray area. Some dispensaries dealt with unlicensed growers who also dabbled in the illegal drug market, and without legal banking options, dispensaries often held excessive amounts of cash. Owners would contract armored vehicles just to go pay their taxes. Most dispensaries hired security guards, but this sometimes wasn’t enough to dispel crime. Robberies, burglaries and even physical attacks became common.

Mitchell, then 28, had gotten into the business after college. He had a network of suppliers and regularly met with new growers to sample product. Around January 2012, a pudgy dark-haired grower named Kyle Handley, 33, visited the store with marijuana he’d been growing in a rental home in neighboring Fountain Valley. Mitchell liked it and bought five pounds for about $14,000. The two hit it off and talked about starting another home grow.

“He seemed like a normal guy,” Mitchell said during courtroom testimony. (Through their lawyers, both Mitchell and Handley declined interview requests.)

Mitchell was a poker player. He’d met his roommate through a home game, and the Newport Beach house they shared had a felt-topped card table. Trips to Las Vegas were common, and he and friends went for a weekend that March. Handley also happened to be there, so they hung out.

“We all meshed well together, so we invited him out on our next trip,” Mitchell testified.

Kyle Handley mugshot.

In May the group booked a $12,000 penthouse in the Hard Rock Hotel and Casino. They hit the pool, partied and gambled thousands on the tables. Mitchell bought Handley a hand job at a strip club. “We had a good time,” Mitchell said. The spending was conspicuous but not suspicious for someone in the all-cash marijuana business.

After the trip, Handley stopped coming to the dispensary and answering his phone. Maybe it was a pay-as-you-go phone, a “burner” like many in the drug trade used briefly then abandoned to reduce their chances of being traced. Maybe he simply ran out of product. After years in the marijuana business, Mitchell knew either was possible.

Meanwhile, nearly $1,000 worth of surveillance cameras and GPS trackers were being delivered to Handley’s home, according to records revealed in court. Handley had a mark, and now he needed a partner. He reached out to Hossein Nayeri, 33, a friend from high school back in Fresno who was an amateur surveillance expert.

Nayeri and Handley had grown marijuana together, and later they lived together after moving to Orange County. Now Nayeri shared a Newport Beach apartment with his wife, Cortney Shegerian, then 25, a slender brunette with a wide smile. (Through their lawyers, Nayeri and Shegerian declined to comment for this article.) While she was in class at nearby Whittier Law School or clerking at a law office, he was home surreptitiously tracking his targets.

The more Handley learned about Mitchell’s wealth and spending habits, the more Nayeri became intrigued. He asked Shegerian to use her legal knowledge to dig up information on Mitchell. Days after Mitchell and Handley’s May 2012 Las Vegas trip, an account was opened with TrackingTheWorld, a service for monitoring and mapping GPS devices. With the information Shegerian found, trips were made to hide a GPS tracker on Mitchell’s truck, point a camera at his Newport Beach home and another at his parents’ home.

The surveillance lasted months. Shegerian testified in court that it became Nayeri’s “100 percent focus.”

“Initially I didn’t know what was going on. I would peek over his shoulder and see what he was doing,” Shegerian said. He’d have maps and GPS data on his laptop almost daily. TrackingTheWorld sent him notifications about full memory cards or low batteries on the devices, and she’d drive with him to switch them out.

Nayeri and Handley had a simple question: Where was Mitchell putting all his money? It certainly wasn’t going into a bank, and Handley knew the dispensary was successful and regularly paying growers thousands in cash.

The surveillance offered hints. Eventually Nayeri thought he’d figured it out and began planning a burglary.

“He knew the parents had money at the house,” Shegerian testified. “He was worried about [their] dog because it barked a lot.” Nayeri asked Shegerian to buy some ground meat. He put on gloves, crushed up some blue pills and began mixing the powder into the meat. “He gave me the skillet after it was done, and he said, ‘We can’t use this anymore. It has poison on it,’” Shegerian said.

But in late summer, before they could go through with the burglary, a curious line of GPS pings from Mitchell’s truck showed a tantalizing new clue. According to Shegerian, Nayeri pointed to the map on his laptop and asked why someone would be driving in circles out in the desert.

“And he said to me, ‘Wouldn’t that be a great place to bury money?’”

Enter now through June 27

Win $3,000 and a lot more!

Hossein Nayeri and Cortney Shegerian met in Fresno in 2003, according to her testimony. He was 24, an immigrant from Iran who had lived in the U.S. since he was a boy. After high school and a stint in the Marine Corps, he was working in a restaurant and attending city college. She was 16, still in high school, the daughter of a successful businessman who ran an electronics recycling company, and the niece of a prominent Santa Monica attorney. Nayeri and Shegerian dated for a while, then drifted apart. They’d see each other periodically, and he’d sometimes borrow her car. He stopped going to school and started growing marijuana with Handley and another friend, Ehsan Tousi.

In the early morning of December 27, 2005, Nayeri’s life took a dark turn. He and Tousi were driving down a country highway after leaving a tribal casino, and Nayeri, whose blood alcohol content was found to be above the legal limit, crashed the car. Tousi died. Charged with manslaughter, Nayeri was facing at least four years in prison. After a campaign of support from friends and family, he got five years probation.

Hossein Nayeri mugshot.

In 2008 he reconnected with Shegerian, who was attending California State University, Fresno. The two began dating seriously and moved in together. But Nayeri became violent, occasionally pushing her or hitting her arm, Shegerian testified. Then it got worse.

“It grew into full-fledged violence where, like, neighbors would hear, property managers would call,” Shegerian testified.

Despite the violence, they married in June 2010 and moved to Orange County for Shegerian to attend law school. Shegerian kept the relationship secret from her family. Nayeri was seeing a psychiatrist for depression and anxiety, but his violent tendencies still manifested. By late 2010, Nayeri had stopped taking most of his medication and began drinking heavily. He stayed awake for days at a time on Adderall and became increasingly unstable. In early January 2011, according to court records, Nayeri attacked Shegerian. Before she could escape, he followed her to her car, put her in a chokehold and punched her in the legs. The next morning, he lured her back to their apartment by saying he was suicidal. She called the police.

When two Irvine Police Department officers arrived, Nayeri came outside to talk. A police report noted that he was in sweatpants, unshaven and disheveled, smelling of marijuana and the three beers he had drunk.

“Nayeri told me he has had a very bad life. He had been sodomized as a child and had killed his best friend in a car accident,” an officer wrote in a police report. “I asked Nayeri if he wanted to harm himself or someone else because of the way he felt. Nayeri said ‘I wouldn’t mind hurting the rapists of the world, but I am a gentle person and would never hurt anyone, let alone myself.’”

The officers made Nayeri agree to allow Shegerian to take him to the hospital to stabilize. Once they left, he refused to go. Police later found him wandering the streets, holding a knife, and he was arrested. Shegerian got a temporary protective order. But it didn’t last long and Nayeri soon moved back in. And he reconnected with his longtime friend Kyle Handley.

Nayeri, Shegerian and Handley had known each other socially for years. Shegerian had been to Handley’s house in Fountain Valley with Nayeri, and Handley had stayed with Shegerian and Nayeri in their apartment for a few months in 2011. The last time Handley was over, in September 2012, Shegerian saw the two men playing with a blowtorch in the garage and laughing.

A week later, on September 29, to celebrate Shegerian’s birthday, Nayeri took her to 21 Oceanfront, a white-tablecloth restaurant in Newport Beach. Her actual birthday was still a few days away, on October 1. But Nayeri already had other plans.

On the afternoon of Monday, October 1, 2012, a white truck pulled into the alleyway behind the Newport Beach home where Mitchell lived. Men in hard hats got out and propped a ladder against the wall. A neighbor heard a strange noise and looked out her window to see a man sitting in the truck and two others fumbling with the ladder. Something seemed off, so she wrote down the license plate number before the truck drove away.

Mary Barnes had just moved into the house with her boyfriend a few days earlier, staying down the hall from Mitchell in the master bedroom. The boyfriend was out of town, and Barnes came home from work to an empty house. A ground floor window was open, oddly. Someone could have stepped right in, she thought as she closed it and then went to bed. Mitchell got home from the dispensary later. He fell asleep on the couch watching TV. It was a normal weeknight.

Around 2:30 a.m., Barnes was asleep when she felt something cold on the back of her neck. “I was instantly awake, and I instantly knew it was the barrel of a gun,” she testified.

“Don’t worry, this isn’t about you,” a man whispered in her ear. “Don’t try to fight and you’ll be all right.”

He taped her mouth, blindfolded her eyes and zip-tied her hands and ankles.

Down the hall, Mitchell woke to a flashlight and a shotgun in his face. He reached out to grab the barrel, but the gun swung around and hit him in the head. He was choked by one person and punched repeatedly by another. He briefly lost consciousness and defecated. When he came to, he was on the floor, being bound, blindfolded and gagged. The stronger attacker grabbed his feet and dragged him downstairs, his face hitting each step on the way.

“He manhandled me pretty good,” testified Mitchell, who is about 5 feet 6 inches tall. They dumped him by the garage and ransacked the house.

Barnes was tied up right next to him. Soon, both were carried into the garage and loaded into the back of a vehicle. Another person began driving.

“They started to kick me, punch me, tase me, and then they started asking where I buried my million dollars,” Mitchell told the courtroom. “I told them I didn’t have a million dollars, and I told them I definitely didn’t have a million dollars buried anywhere.”

They put the gag back on and beat him for a few minutes before ripping it out and asking again.

They drove for hours, and the cycle of beatings and questioning continued. Mitchell was stomped, hit on the bottom of his feet with a rubber hose, and burned with a blowtorch. Spanish-language radio was blaring.

“Where’s the money?” one asked repeatedly, using a fake Spanish accent. “My patrón wants the million dollars.” The other shot him with a Taser.

“He kept calling him puta, puta, and then he started calling him stupid, and he said [it] was going to cost not only his life but also this innocent female, which I assume he was referring to me,” Barnes testified. “At that point I thought we were going to die.”

The van slowed down, and the pavement turned to dirt. They drove about half a mile then stopped. Barnes and Mitchell were dumped on the ground. Mitchell had been there before — not to bury money, but to tour an old mine a friend was hoping he’d invest in. The project hadn’t impressed him, and he’d left, probably thinking he’d never return.

The threats became more intense. “He kept saying ‘We know you have the money, where is it, where is it, we know it’s up here,’” Barnes said. “At one point he raised his voice and said very loudly, ‘Shoot him in the head.’”

The man feigned a call to his supposed boss, speaking in his fake accent and walking away.

“My patrón is going to get very, very upset if we don’t get the million dollars,” he said when he returned, according to Barnes. “If we don’t get the million dollars, I want his dick.”

The men gathered around Mitchell. “They proceeded to hold me down, pull my pants down lower and then cut off my penis,” he testified. As he lay there bleeding, a liquid was poured all over his body. “I thought it was gasoline and they were going to burn me.” The liquid was bleach, apparently intended to destroy DNA evidence. Then they walked away.

One of the men leaned over Barnes and pressed the knife to her hands, still bound behind her.

“I’m going to take this knife and throw it five feet in front of you,” he said, according to Barnes’ testimony. “And if you can get to the knife and cut yourself free, you’ll live. Today’s your lucky day.”

Once the sound of the van kicking gravel faded, Barnes used her knees to push the blindfold from over her eyes. She saw the blade, scooted over and grabbed it behind her back. Then she immediately moved back over to Mitchell and, looking over her shoulder, cut the tape that was wrapped over his mouth. She asked if he was OK, and he said yes. Bending back, she managed to cut the zip ties around her ankles. She tried to cut the ties on Mitchell’s wrists, but they were bound so tight that she couldn’t cut them without lashing his skin.

Barnes could see headlights on a highway nearby. Mitchell was bleeding heavily and needed help. Barefoot in pajamas, her hands bound behind her, she walked over rocks and dirt down to the road, a straightaway on State Route 14. The sun was coming up.

“Several cars went by. I was just screaming ‘Help me, please help me,’” she said. “I could see their faces. They were just shocked.”

Around 7 a.m., Steve Williams of the Kern County Sheriff’s Office was driving southbound on Route 14 when he saw Barnes. “As I was getting closer, I could see the zip ties behind her sticking out from her back,” he said. “As soon as I turned around, I knew something was up.”

He freed Barnes from the zip ties, and she told him where Mitchell was and what had happened. Backup was already on its way. They reached Mitchell a few minutes later. The stench of bleach was overpowering, Williams testified. Mitchell asked for water. He and Barnes were loaded into separate ambulances and rushed to Antelope Valley Hospital, about 25 miles away.

By this time, the kidnappers in the van had been driving for at least an hour. They’d taken the severed penis with them. It was thrown out the window somewhere along the way.

Within hours, police in Newport Beach were searching Mitchell’s house and canvassing the neighborhood for clues. The neighbor who’d noticed the suspicious workers the day before handed over the license plate number she’d written down. The police quickly identified the truck’s owner: Kyle Handley.

After interviewing Mitchell in the hospital three days later and confirming his acquaintance with Handley, detectives obtained a warrant. The next day, police found a garbage bag of bleach-stained clothes, towels and zip ties on Handley’s back patio. He was arrested.

Later that day, Nayeri hadn’t heard from Handley and was growing concerned. He borrowed Shegerian’s car and drove to Handley’s. The police were still searching the premises. It was only a matter of time before their investigation would lead them to Nayeri.

According to Shegerian’s testimony, Nayeri met with an attorney and then set about systematically destroying his laptops, phones, surveillance equipment and other electronic devices. Within days, he was on a plane to Iran.

DNA on a plastic glove found inside Handley’s truck would become crucial evidence. It didn’t match anyone in Orange County’s database, but samples were sent to the state, and in January 2013 the California Department of Justice confirmed a match with Nayeri.

Nayeri’s name led back to Shegerian’s. Newport Beach police conducted a search of her car and confiscated phones, surveillance cameras and GPS trackers. The SIM card in the tracker was associated with a TrackingTheWorld account, and investigators were able to determine that the email address that was used to initiate its service had been created in late May 2012 through an internet connection in the offices of a business in Fresno. An employee there turned out to be Naomi Kevorkian, the wife of Ryan Kevorkian, one of Nayeri and Handley’s high school friends. This connection would lead police to investigate both Kevorkians, discovering that Naomi had rented the van and purchased the guns used during the kidnapping. After undercover officers picked up Ryan’s used gym towel at a 24 Hour Fitness, his DNA was matched to DNA found on zip ties obtained from Handley’s house.

Shegerian also became a suspect. In April, detectives called her in, ostensibly to hand over objects confiscated from her car. But at the police station, they questioned her about Nayeri. Shegerian refused to talk. She left the station and told Nayeri about the encounter shortly afterward. Looking for a way to apply pressure, detectives put in a call to her father, the successful Central Valley businessman, who was unaware of Shegerian and Nayeri’s ongoing relationship. “I was dishonest,” Shegerian testified. “It was a difficult time in my life.”

She soon had an attorney. Knowing the incriminating nature of her involvement with Nayeri and the surveillance equipment, Shegerian and her attorney arranged another meeting with detectives in May and made a deal to cooperate. Shegerian was soon coordinating with detectives to find a way to Nayeri, who had been living in Iran for the past seven months, a country with no extradition agreement with the U.S. While he was in Iran, U.S. law enforcement couldn’t touch him. So a ruse was set, and Shegerian was the lure.

She had to play a slow game, gradually convincing Nayeri she was on his side. Over months, in conversations she recorded and gave to Newport Beach police, she rebuilt his trust in her. They started making plans for her to travel and give him money. To underscore her allegiance, she had also begun spending time with Nayeri’s sister, and she attended his uncle’s funeral.

They decided to meet in Barcelona and that Shegerian would bring him $20,000. Nayeri’s sister was invited to put him at ease.

Law enforcement in Newport Beach worked with the FBI to suggest that the ideal route for Nayeri’s travel to Barcelona should include a layover in the Czech Republic, which has an extradition agreement with the U.S.

“We needed to create the opportunity for him to fly into that country,” testified Ryan Peters, the Newport Beach detective who oversaw Shegerian’s contact with Nayeri. A flight was booked, and on November 7, 2013, six months after Shegerian agreed to cooperate with law enforcement, Nayeri boarded a plane in Iran. Shegerian and his sister were already on their way to Barcelona. His flight landed in Prague for a brief layover. He was arrested as soon as he got off the plane.

In early 2016, Hossein Nayeri was in the Orange County Jail, in Santa Ana. He’d been there a little over a year since his extradition from the Czech Republic, where he’d spent more than 10 months in what he later described as “a dungeon.” Ryan Kevorkian, the alleged third man in the desert, had been in jail since November 2013. (His now ex-wife, Naomi Rhodus, was out on bail.) Kyle Handley had been in jail the longest, since October 6, 2012, just four days after the crime was committed. Their next pretrial hearings were days away, and a jury trial was likely to begin in about a month. Their charges included kidnapping for ransom, torture and aggravated mayhem. All three faced life in prison. But Nayeri had another plan.

Sometime on Friday, January 22, in a jail dorm housing 67 other inmates, Nayeri crouched between two bunk beds. A phone camera filmed as he reached over to the wall and grabbed onto a metal grate. Somehow, it had been cut, and Nayeri pulled it from the wall to reveal a rectangular opening about 1 foot by 2 feet. Nayeri crawled through headfirst. His arm reached back and gave a thumbs up.

The video, later edited, narrated by Nayeri and posted online, details what would become a weeklong escape alongside jailmates Bac Duong, 43, and Jonathan Tieu, 20, both facing charges of attempted murder. The men moved through the innards of the jail, posing for smiling photos, before reaching the roof, where officials later found a rope of bedsheets leading to the ground.

 

Around 5 the next morning, there was a knock on Shegerian’s door. Now practicing law at her uncle’s firm in Santa Monica, she opened the door to police, there to put her under protective custody. News of Nayeri’s escape scared her, she testified, “more than anything in my life.”

Nayeri, Duong and Tieu wound up in Westminster, California, a few miles from the jail. They called a cab and went shopping. After stops at Target and Walmart, they turned a gun on the driver, took over his car and held him captive. They stole a van, and the two vehicles started a multiday trip north.

Law enforcement sent out urgent alerts about the escaped inmates. Media across the state and the country published their mugshots and followed along with the manhunt. “I think the public should expect the worst if they’re encountering them and call 911 and allow the professionals to respond,” an Orange County sheriff told the press. A $150,000 reward was offered for information leading to their capture.

The fugitives and their captive moved north. In a San Jose motel room, Nayeri and Duong got into an argument about the cab driver. It was nearly a week after their escape, and Nayeri reportedly wanted to kill the driver. Duong refused. After a debate, Duong returned to Orange County with the cab driver and turned himself in.

Nayeri and Tieu made their way to San Francisco. In the back of the stolen van, Tieu pointed the camera at Nayeri, who was holding a small glass pipe. They were in what Nayeri called “the best part of San Francisco” — Haight-Ashbury — “we are not killing anyone, we are not kidnapping anyone. Just trying to pass time, trying to weather the storm.” The camera pans, showing bottled water, bunches of bananas and Tieu in a black T-shirt holding a bottle of Jack Daniel’s. “This is our crib,” Nayeri says. “Water. All the basics. What do you want; you want some bananas? No, we don’t have crack, we don’t have crystal meth. We’re smoking weed and eating bananas. It’s kind of bananas.” They both laugh. “No, we’re not doing the crazy things they’re saying.”

The camera turns back to his face, chewing gum, his goatee and mustache recently shaved, his eyes barely open, a week after breaking out of the Orange County Jail. “A special Friday night in San Francisco,” he says, smiling.

The next day, Nayeri stepped outside and a homeless man recognized his face from the news. He contacted a police officer, and after a brief chase, Nayeri was arrested. Tieu was found hiding in the van.

 

A year and a half after the escape, Nayeri’s video appeared online. It ends with a monologue over a still of one of his mugshots, his dark hair tousled, his beard full. “We cost the taxpayers a lot of money. More than that, we scared the hell out of people, and caused a lot of anxiety and fear. And at the end of the day, I can’t say I feel good about that,” he said. “I do know, with every ounce of my being, I absolutely feel terrible for every single person who was affected because of us.”

In December 2017, more than five years after Mitchell’s kidnapping, the first of the alleged perpetrators was put on trial. In handcuffs, a dark suit and white collared shirt, Kyle Handley was escorted into an Orange County courtroom, his face a bit sad, his hair a bit thin. His family was in the courtroom as well, and he offered a slight nod to them before being seated at the defense table. He wouldn’t be called to testify, but the jury would hear from both victims of the kidnapping, Mitchell and Barnes, from Shegerian, and from a wide array of law enforcement members.

Over six days, Orange County deputy district attorneys Heather Brown and Matt Murphy laid out the elaborate crime, and the months-long effort to track down the perpetrators. “There are people here who are never going to be the same,” Murphy told the jury during his closing argument. “You can’t let him get away with it.” Handley was their target, but they were also laying the groundwork for the coming trial of Nayeri, who Murphy referred to as a “psycho.” Nayeri’s trial is scheduled for later this year. The cases against Ryan Kevorkian and Naomi Rhodus are pending.

Handley’s attorney, Robert Weinberg, argued that only circumstantial evidence linked his client to the crime: Handley’s DNA wasn’t found on the zip ties or in the plastic glove, and there’s no proof he had any connection to the surveillance devices used. “Is it some lucky turn of events that nothing turns up on Mr. Handley?” he asked. “Should we just ignore that?”

Court adjourned for the day. When the jury returned the next morning, they entered the deliberation room. Given the extent of the testimony and the relatively high bar of establishing a unanimous vote among 12 jurors, a long deliberation was expected. The few dozen people in the audience trickled out. Brown left the courthouse to get her hair done.

After less than two hours of deliberation, the jury came to a verdict. On four counts — kidnapping for extortion, kidnapping with intent to harm, aggravated mayhem, and torture — the jury unanimously found Handley guilty. In July, he was sentenced to life in prison without parole.

Standing next to his attorney, Handley shook his head and looked down. Then he sat and put a hand to his eyes.

Mitchell was sitting with his family and his girlfriend in the audience. As the four guilty verdicts were read, he leaned his head back and looked upward. His girlfriend reached over and held his hand.