SFPD investigations revealed multiple Tenderloin stores operated illegal gambling dens, sold drugs, and fueled criminal activity and fencing operations
SAN FRANCISCO (April 11, 2025) — City Attorney David Chiu announced today that he filed several lawsuits against the property owners and managers of four Tenderloin stores for operating illegal gambling dens and enabling other criminal activity in the neighborhood. The businesses housed substantial illegal gambling operations, facilitated criminal and drug activity in the neighborhood, and, in some cases, illegally sold controlled substances. These property owners and business managers violated a number of state and local laws and California’s Unfair Competition Law.
Lawsuits were filed against the property owners and managers of Family Corner Discounts, US Smoke Shop, EZ Dollar Discount Store, and Ed’s Market.
“It is clear these stores are magnets for substantial illegal activity,” said City Attorney David Chiu. “Drug dealing, gambling, fencing, selling contraband and illegal tobacco products—these stores are the Wild West. One store went as far as to store meth for sale under a display shelf. I commend SFPD for identifying these problematic stores that endangered the safety and welfare of their Tenderloin neighbors. We are asking the Court to protect the community, hold these owners accountable, and level the playing field for law-abiding small businesses.”
“The SFPD will continue to crack down on this illegal activity in our community,” said Chief Bill Scott. “The City is united in the effort to dismantle drug markets, illegal gambling dens and other criminal activity to ensure our streets and clean and safe. I want to thank City Attorney David Chiu for partnering in this effort and using the tools at his disposal to hold these individuals accountable.”
“These illegal drug and gambling dens threaten the safety of the children, families, and seniors in our community who walk by the businesses every day,” said Supervisor Bilal Mahmood, who represents the Tenderloin. “I commend our City Attorney and his team for taking this issue seriously and working to bring safety back to our neighborhood.”
Family Corner Discounts
The owner of Family Corner Discounts has leased the commercial property at 401 Ellis Street since at least February 2024. In January 2025, a San Francisco Police Department (SFPD) officer saw people crowded around a gambling machine in the store, and saw an individual walk in and show the clerk a container of laundry detergent concealed under his jacket, indicating a possible fencing operation. The following day, undercover officers used the gambling machines at the store and observed five other gambling machines.
Later that month, SFPD executed a search warrant and seized six electronic gambling machines, $4,456 of cash, a payment ledger, foreign tobacco products, merchandise on display for sale with CVS price stickers, and 50.8 grams of methamphetamine located under a display shelf. The store also sold drug paraphernalia, including hundreds of glass pipes commonly used to smoke methamphetamine and crack cocaine, and small plastic baggies used to store narcotics.
US Smoke Shop
The owner of US Smoke Shop has leased the commercial property at 415 Ellis Street since at least September 2022. In January 2025, after receiving numerous complaints of illegal gambling occurring at the property, undercover SFPD officers entered the store and used the gambling machines. The following week, SFPD executed a search warrant and seized five gambling machines, two pistol magazines, $17,269 in cash, a payment ledger, a digital scale, loose leaf cannabis, pre-rolled cannabis joints, cannabis vape cartridges, and illegal flavored tobacco products.
EZ Dollar Discount Store
The owner of EZ Dollar Discount Store has leased the commercial property at 335 Jones Street since at least January 2024. In October 2024, a SFPD plainclothes officer observed six gambling machines and a coin pusher game in the store, but instead of prizes, the machine was filled with quarters and paper currency. Several City departments conducted a task force inspection and issued Notices of Violation (NOV) for work without a permit, the illegal sale of tobacco paraphernalia, and deploying the storefront security gate during business hours. These NOVs remain outstanding.
In January 2025, undercover SFPD officers used the gambling machines at the store. Later that month, SFPD executed a search warrant and seized six gambling machines; $2,181 in cash; a payment ledger; prizes in one machine that consisted of Visa gift cards, a Bluetooth speaker, and a solar charger and watch; and stolen merchandise on display for sale with Walgreens, CVS, Safeway, Big 5, Trader Joe’s, Target, and Harbor Freight branding. The store also sold glass pipes, digital scales, and small plastic baggies used to store narcotics.
Ed’s Market
The owners of Ed’s Market have leased the commercial property at 153 Turk Street since at least January 2017. In February 2025, SFPD began receiving complaints about illegal gambling at Ed’s Market, and an SFPD officer then conducted an undercover operation. The officer observed four gambling machines, played one of the slot machines, and saw others play and cash out winnings. In March 2025, SFPD executed a search warrant and seized 11 gambling machines, $3,936 in cash, and hundreds of glass pipes and Brillo pads.
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. The drug paraphernalia sold at all markets were in plain view to anyone who entered the stores.
In 1997, California passed the Gambling Control Act, which restricts legal gambling to licensed California Lottery retailers, card rooms, racetracks, and casinos operated by Native American tribes. State and local law make virtually all other forms of gambling expressly illegal, including the operation or possession of gambling slot machines.
Defendants have created a public nuisance and contributed to criminal activity in the Tenderloin. San Francisco’s lawsuits allege the Defendants violated multiple state and municipal codes, engaged in unlawful and unfair business practices, and profited from operating businesses or leasing properties used for gambling and other illegal activity. The lawsuits also allege that certain Defendants used their stores as fencing operations and illegally sold cannabis, flavored tobacco, or methamphetamine.
In addition to seeking penalties and injunctive relief to cure the violations at the properties, the City is asking the Court to shut down each business for one year.
The case against Family Corner Discounts and US Smoke Shop is City and County of San Francisco and the People of the State of California v. 2008 Oh Family Trust, et al., San Francisco Superior Court. The case against EZ Dollar Discount Store is City and County of San Francisco and the People of the State of California v. Ursula Fung, et al., San Francisco Superior Court. The case against Ed’s Market is City and County of San Francisco and the People of the State of California v. 155 Turk Street Associates L.P., et al., San Francisco Superior Court.
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