Two Sentenced for Synthetic Drug Shipments

FRESNO, Calif. — On Friday, December 2, 2016, U.S. District Judge Dale A. Drozd sentenced two defendants for their involvement in a large-scale smokeable synthetic cannabinoid trafficking organization based in Millbrae and Stockton, United States Attorney Phillip A. Talbert announced.

Timothy New, 34, of Pensacola, Florida, was sentenced to two and a half years in prison and ordered to forfeit $50,053, and Natalie Middleton, 31, of Clovis, California, was sentenced to four months in prison and ordered to forfeit $11,236.

Smokeable synthetic cannabinoid products are synthetic drugs commonly known as “spice” or “K-2.” These products are falsely touted as legal alternatives to controlled substances. In some instances, however, they are far more lethal.

In May 9, 2016, New pleaded guilty to the fraudulent interstate shipment of misbranded drugs. On June 27, 2016, Middleton, a former manager of The Stuffed Pipe, a smoke shop with locations throughout the Central Valley, pleaded guilty to laundering the proceeds from the sale of synthetic drugs. Court documents indicate that from September 2012 to May 2013, New, Middleton, Douglas Jason Way, 41, of Evanston, Illinois; and Timothy Ortiz, aka Michael Fitton, 45, of Waukegan, Illinois, were involved in a drug trafficking enterprise that imported raw synthetic cannabinoids from China containing AM-2201 and XLR11 that they processed into a smokeable form. They distributed the drugs to smoke shops, including The Stuffed Pipe, adult novelty stores, gas stations, and other retail establishments throughout the United States.

At the time of the illicit enterprise, AM-2201 was a schedule I controlled substance under the Controlled Substances Act. XLR11 was scheduled as an illicit controlled substance in May 2013, after the Center for Disease Control and Prevention found that XLR11 can cause acute kidney damage. 

According to court documents, New, Middleton, and their co-defendants shipped at least 24 tons of misbranded drugs and generated in excess of $33 million as a result of the fraudulent sales. The drugs were manufactured by Zencense IncenseWorks, LLC, aka ZIW, LLC (dba Zencense), ZenBio, LLC (dba ZenBio), and Biozen, LLC (dba Biozen) and were sold under the brand names of Bizarro, Orgazmo, Headhunter, Defcon, Neutronium, Sonic Zero, Sonic Boom, Sonic Blast, Shockwave, Hampster, and Posh. The drugs were sold by the gram and marketed as “potpourri” or “herbal incense” and claimed they were “not for human consumption,” although they were fully intended to be used for intoxication.

This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration and the Fresno County Sheriff’s Office. The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. This OCDETF investigation was also part of a nationwide law enforcement effort coordinated by the DEA’s Special Operations Division. Assistant United States Attorney Karen A. Escobar is prosecuting the case.

Charges against Way and Ortiz are pending. They are next scheduled to appear in court on December 12, 2016. If convicted, they face a maximum penalty of 20 years in prison and a fine of $10 million for drug trafficking offenses and drug misbranding charges. The charges against them are only allegations; Way and Ortiz are presumed innocent until and unless proven guilty beyond a reasonable doubt.