Fourteen Individuals Charged With Conspiracy To Distribute A Controlled Substance In Major Utah Spice Case
Utah case is a part of Project Synergy, a nationwide initiative
targeting synthetic drug trafficking organizations
ST. GEORGE, UT – A federal complaint unsealed Wednesday morning in St. George, Utah, charges 14 individuals in St. George and Salt Lake City with conspiracy to distribute spice. The charges arise from an investigation that started in December when Illinois officials discovered packets of spice which appeared to be shipped from St. George to Illinois smoke shops. The charges were announced at a press conference Wednesday afternoon in St. George.
The Utah case is a part of “Project Synergy,” a nationwide enforcement operation targeting designer drug trafficking organizations. Nationwide, more than 300 federal and state search warrants and 150 arrest warrants were executed Wednesday morning with enforcement actions in 33 states. These series of enforcement actions included retailers, wholesalers, and manufacturers. Project Synergy was coordinated by DEA’s Special Operations Division working with the DEA Office of Diversion Control. The national initiative includes cases led by DEA, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI); IRS-Criminal Investigation; and the FBI.
In addition to the complaint in the Utah case, 43 seizure warrants and one civil forfeiture complaint were filed this week. Law enforcement officers executed 21 search warrants. Agencies involved in the Utah investigation include DEA, IRS-Criminal Investigation, HSI, BLM, the Washington County Drug Task Force, the Washington County Sheriff’s Office, the St. George Police Department, and the Hurricane Police Department.
Illinois officers, conducting a Spice investigation connected to a chain of smoke shops, contacted DEA agents in St. George when searches executed as a part of their investigation turned up 9,644 packets of Spice which appeared to have been shipped to Illinois from St. George. The Spice packets were marketed under brands called “Gods of Spice” and “Blue Heaven.”
Based on the information from Illinois officials, federal, state, and local law enforcement agencies in the St. George area launched an investigation. According to the complaint, the investigation shows that beginning in about March 2011, a group of co-conspirators in St. George and Salt Lake City began manufacturing large amounts of illegal Spice in Washington County and distributing it primarily to smoke shops around the United States using commercial couriers such as FedEx and UPS. These smoke shops, in turn, sell the Spice to individual customers. As an example, according to the complaint, the Illinois investigation showed that illegal Spice comprised about 90 percent of the smoke shops’ sales. It also showed that the smoke shops were obtaining nearly all of their Spice from the Washington County organization.
Since April 1, 2011, the Utah co-conspirators have distributed roughly 2,652 pounds of finished Spice product.
Independent of the investigation launched by the information from Illinois, HSI agents seized two packages of Spice chemicals coming into the country to co-conspirators in the case, including a shipment from China.
“Often, when we talk about drug investigations in Utah, we are talking about drugs that are manufactured and shipped into Utah from other countries. Today’s complaint alleges co-conspirators in St. George, Utah, were involved in the manufacturing and distribution of drugs that were then shipped to states around the country,” U.S. Attorney David B. Barlow said today. “These synthetic drugs are illegal and dangerous. Those who use them have no idea what they are putting into their body or what chemicals have been used to manufacture them. The availability of these drugs, often sold in false and misleading packaging, makes them more dangerous. Those who use them may believe that if they can purchase them at a store or online, they must be legal and safe. They are neither, and those who manufacture or distribute these drugs in Utah will face prosecution.”
Charged in the complaint are Brian Merrill, age 27; Joshua Davis, age 37; Buck Andersen, age 33; Joseph Givogre, age 42; Gary Jolley, age 58; Alicia Brandom, age 31; Curtis McOsker, age 40; Malin Pavelka, age 34; Jennifer Barlow, age 22; and Richard Lewis, age 61; all of the St. George area. Defendants in the complaint from the Salt Lake City area are David Flores, age 32; James Hardwick, age 27; David Carter, age unknown; and Becky Young, age 36.
"Today DEA and our partners cut the head off of the snake. By decimating this massive drug distribution ring in St. George, we have stopped a constant flow of Spice to retailers in over 20 cities across the United States," said DEA Rocky Mountain Division Special Agent in Charge Barbra Roach.
“What hasn’t changed since Al Capone and Mickey Cohen is the effectiveness of IRS Criminal in relentlessly following the money trail to topple criminal enterprises. In this case, our financial sleuthing showed over $12 million in alleged proceeds deposited in and transferred between various accounts,” said Paul Camacho, Special Agent in Charge of the IRS Las Vegas Field Office.
“This is another major blow to an illicit industry that masquerades as being safe and legal,” said Kumar Kibble, Special Agent in Charge of HSI Denver, who oversees Utah investigations. “HSI is committed to working with our law enforcement partners to bring the synthetic drug industry to its knees.”
The complaint alleges Merrill, Davis, Andersen, Flores, Hardwick, Givogre, and Jolley were the organizational leaders. Among other things, they obtained the raw chemicals and materials, employed other people, organized the distribution of the finished products, and laundered money. The complaint alleges the other individuals were employed by the leaders or otherwise assisted in the manufacturing and distribution of Spice and in laundering money.
According to the complaint, the leaders of this alleged drug-trafficking organization used corporations registered in Utah and Nevada which gave legitimacy to business transactions such as renting warehouses, shipping packages, receiving wire transfers, and depositing and withdrawing cash. Eight corporations are referenced in the complaint, including GOS Distributing, LLC; BH Wholesale; PFM Wholesale; DVS Wholesale; GRS Distributing; Zodiac Mortgage; Zodiac Companies Corp.; and Bad Habitz. Various defendants, including Davis, Merrill, Andersen, Givogre, Jolley, Flores, and Hardwick are listed as operators of the corporations.
According to the complaint, investigators learned that Spice was being manufactured at a warehouse in Hurricane. In late March, the Washington County Drug Task Force executed a search warrant at a residence in Santa Clara. Merrill signed the rental agreement for the residence, which was occupied by McOsker and Brandom. Inside the residence, officers found several items which they believe co-conspirators were utilizing to manufacture Spice, including four 50-gallon barrels of Ethanol 200, a binding agent; more than 300 kilograms of Damiana, a plant material; and seven bags containing white powder believed to be Spice chemicals.
In the days following the search of the residence in Santa Clara, the complaint alleges Davis and Merrill began removing large amounts of documents and other material from the Hurricane warehouse. Law enforcement officers followed Davis to the Washington County Landfill where they were able to recover evidence of the conspiracy to distribute Spice, including Gods of Spice packaging, bottles of flavoring, an operating agreement for Gods of Spice showing Andersen, Flores, and Davis as each 33 percent owners; hundreds of invoices; payroll summaries; and customer invoices.
The complaint outlines investigative tools used during the investigation to track the activities of the alleged co-conspirators, including business records seized through trash collections; monitoring of package shipments; surveillance; and search warrants. For example, from July 2012 through October 2012, the complaint alleges Davis, Andersen, and Merrill shipped hundreds of FedEx packages to smoke shops located in California, Florida, Iowa, Idaho, Illinois, Maine, Michigan, North Carolina, Nevada, New York, Oklahoma, Virginia, and Washington using company names GOS, PFM, and BHW. During the same time period, Jolley, using Zodiac Company, sent hundreds of packages to smoke shops in Alabama, Florida, Georgia, Illinois, Maine, Minnesota, Missouri, North Carolina, and Washington.
The complaint alleges that Merrill, Davis, and Andersen have deposited more than $5,640,728 in suspected drug proceeds into bank accounts under their control from April 2011 through March 2013. Hardwick and Flores have deposited more than $3,556,615 in suspected drug proceeds into bank accounts under their control from April 2011 through March 2013, the complaint alleges. Jolley, who the complaint identifies as a redistributor for Merrill, Davis, and Andersen, has deposited more than $2,418,263 in suspected drug proceeds in bank accounts under his control.
The potential maximum penalty for a conviction of conspiracy to distribute a controlled substance is 20 years in federal prison. Initial appearances for defendants arrested in St. George will be at 1:30 p.m. Thursday.
Complaints are not findings of guilt. Individuals charged in complaints are presumed innocent unless or until proven guilty in court.
(In addition to the PIO contacts listed above, questions for IRS-CI can be directed to Supervisory Special Agent Jared Halper at 801-318-6634. The HSI media contact is Andrew Munoz who can be reached at 206-442-1450.)