Former Resident of Las Vegas, N.M., Sentenced to Four Years for Synthetic Cannabinoid Trafficking and Money Laundering
Defendant, who used Businesses to Distribute Synthetic Cannabinoids and Launder Drug Proceeds, also Ordered to Forfeit $1 Million, Five Properties in New Mexico and Arizona, and Nine Vehicles
ALBUQUERQUE – Ray L. Smith, 52, a former resident of Las Vegas, N.M., was sentenced yesterday afternoon in federal court in Albuquerque, N.M., to 48 months of imprisonment for his conviction on drug trafficking and money laundering charges. Smith will be on supervised release for three years after completing his prison sentence. Smith also was ordered to forfeit to the United States $1,062,592 in cash, five properties located in New Mexico and Arizona, and nine vehicles. He also was ordered to pay $5,000 in community restitution and a $5,000 fine.
Smith and co-defendant Tamara Phillips, 47, of Kingman, Ariz., were arrested by the DEA in Feb. 2016, and charged in a four-count indictment that was filed in Feb. 2016, alleging drug trafficking and money laundering offenses. The indictment subsequently was superseded in May 2017, and charged Smith and Phillips with conspiring to distribute synthetic cannabinoids, maintaining premises for the purpose of distributing synthetic cannabinoids, and participating in a conspiracy to launder drug proceeds. According to the superseding indictment, between Feb. 2010 and Feb. 2016, Smith and Phillips participated in a conspiracy to distribute synthetic cannabinoids from three businesses in New Mexico and Arizona owned by Smith that were jointly managed by Smith and Phillips
The superseding indictment alleged that Smith and Phillips used the three businesses – “Smokin Body Jewelry” stores located in Las Vegas, Raton and Kingman – to sell synthetic cannabinoids. Employees at the stores allegedly sold synthetic cannabinoids to customers while acting at the direction of Smith and Phillips. The superseding indictment included information about two alleged drug transactions occurring on Sept. 29, 2015; the first involved the sale of $1,687.46 of synthetic cannabinoids by an employee at the Raton store, and the second involved the sale of $1,556.91 of synthetic cannabinoids by an employee at the Las Vegas store. The superseding indictment included forfeiture allegations seeking forfeiture of property and other assets constituting the proceeds of the drug trafficking offenses charged in the superseding indictment or that were used to facilitate those crimes including seven parcels of real property located in New Mexico and Arizona, funds in 20 bank accounts, a safety deposit box, and four vehicles.
During law enforcement operations executed on Feb. 18, 2016, law enforcement agents and officers seized 18 bank accounts, a safety deposit box and the eight parcels of real property identified in the indictment. They also executed six search warrants, including search warrants for each of the three stores, a second commercial property in Kingman, and two residences. The estimated aggregate value of the real property, currency and other assets seized on Feb. 18, 2016, exceeded $2.3 million, including approximately $380,000 in cash. The agents and officers also seized approximately 11 kilograms (24.2 pounds) of precursor chemicals allegedly shipped from China in the primary residence of Smith and Phillips. In addition, approximately 25 kilograms (55 pounds) of suspected synthetic cannabinoids with a street value of $250,000 were seized from the three stores and the residence of Smith and Phillips.
On Nov. 2, 2017, Smith pled guilty to four counts of the superseding indictment charging him with conspiracy to distribute synthetic cannabinoids, two counts of maintaining a drug-involved premises, and conspiracy to commit money laundering. In entering the guilty plea, Smith acknowledged that from Feb. 2010 through Feb. 2016, he was the founder, owner and proprietor of “Smokin’ Body Jewelry,” which operated at various times from 2010 through 2016 in New Mexico and Arizona. Smith admitted that during that timeframe, he conspired to sell large quantities of synthetic cannabinoids to the general public.
Smith further admitted that synthetic cannabinoids were “Smokin Body Jewelry’s” best-selling item, and that he engaged in the routine practice of mixing, transferring and spreading deposits throughout personal and business bank accounts in order to conceal the source of his revenue as primarily derived from the unlawful sale of synthetic cannabinoids. Smith admitted he used revenue from the sale of synthetic cannabinoids to pay for his personal salary and the salaries of store employees, and to purchase several parcels of land, property and vehicles.
Phillips has entered a plea of not guilty to the charges in the superseding indictment and is scheduled for trial in May 2018. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the DEA’s offices in Albuquerque, N.M., and Flagstaff, Lake Havasu and Yuma, Ariz., with assistance from the Raton Police Department and the Mohave Area General Narcotics Enforcement Team. Assistant U.S. Attorneys Shaheen P. Torgoley and Joel R. Meyers are prosecuting the case.
The synthetic cannabinoids charged in the indictment are commonly referred to as “spice.” According to the DEA, over the past several years, there has been a growing use of synthetic cannabinoids. Smoke-able herbal blends marketed as being “legal” and providing a marijuana-like high have become increasingly popular because they are easily available and, in many cases, more potent and dangerous than marijuana. These products consist of plant material that has been coated with dangerous psychoactive compounds that mimic THC, the active ingredient in marijuana. These substances, however, have not been approved by the Food and Drug Administration for human consumption, and there is no oversight of the manufacturing process. Synthetic cannabinoids often are labeled as incense to mask their intended purpose.