PORTLAND, Ore. – Officials released details Friday of a federal grand jury indictment stemming from a probe led by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) that charges four defendants for crimes surrounding the manufacture and distribution of synthetic drugs sold under the brand name "K2."
Lead defendant Alexander Dimov, 33, of Molokai, Hawaii, and Ryan A. Scott, 31, of Vancouver, Wash., were arrested Tuesday by Portland-based HSI special agents. Special agents seized hundreds of pounds of dried plant materials, packaging equipment and chemicals from Scott's residence.
Dimov and Scott, along with two other co-defendants, are charged with conspiring to manufacture and distribute synthetic cannabinoid controlled substances, various synthetic cannabinoid analogues and the synthetic cathinones. These synthetic compounds are commonly known as synthetic marijuana, "spice," and by the defendants' brand name "K2."
HSI and Internal Revenue Service (IRS) special agents, with financial analysts from the Organized Crime and Drug Enforcement Task Force, have been investigating the group since early 2011. According to the indictment, the four conspirators mixed chemical compounds together with herb extracts and marketed the "K2" products as incense. Additionally, it is alleged they used the Internet to market and distribute "K2" and purchased dozens of domain names, including "k2drugs.com" and "k2incense.org" to monopolize the K2 market.
"With these arrests, HSI has halted a multi-million dollar business that we believe was a threat to public health and safety," said Brad Bench, acting special agent in charge of HSI Seattle. "The public should be aware that these synthetic drugs are just as dangerous, and now just as illegal, as similar controlled substances."
The group is also charged with illegal importation, smuggling, distributing misbranded drugs and money laundering.
"Individuals who manufacture and distribute synthetic drugs in an attempt to get around the law are not fooling law enforcement," said Kenneth J. Hines, the IRS special agent in charge of the Pacific Northwest. "Illegal drugs are illegal drugs, plain and simple. We will continue to work with our law enforcement partners to stop the flow of drugs that harm our communities."
Dimov, a Bulgarian national currently in overstay status, appeared in federal court in Honolulu and was detained for transport to Oregon. Scott was arraigned in Oregon Wednesday where he pleaded not guilty and was released on conditions pending trial. Trial is set for July 10 at the Portland federal courthouse.
The conspiracy charge carries a maximum sentence of 20 years in prison and a $1 million fine. An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.
In March 2011, the U.S. Drug Enforcement Administration (DEA) exercised its emergency scheduling authority to control five chemicals (JWH-018, JWH-073, JWH-200, CP-47,497, and cannabicyclohexanol). The DEA administrator exercised the emergency scheduling powers based on a finding that the placement of these synthetic cannabinoids into Schedule I of the Controlled Substances Act was necessary to avoid an imminent hazard to the public safety. Schedule I is the most restrictive category under the Controlled Substances Act and is reserved for those substances with a high potential for abuse, no accepted medical use for treatment in the United States and a lack of accepted safety for use of the drug under medical supervision.
The case is being prosecuted the U.S. Attorney's Office for the District of Oregon.