Fresno-area woman pleads guilty to laundering profits from synthetic drug sales

FRESNO, Calif. — A Clovis woman has pleaded guilty to laundering proceeds from the sale of synthetic drugs, commonly known  as “spice,” following a probe by federal and state investigators as part of an Organized Crime Drug Enforcement Task Force (OCDETF).

Natalie Middleton, 30, of Clovis, appeared in federal court Monday. According to court documents, Middleton purchased a Lake Tahoe time share with proceeds obtained from the sales of smokable synthetic cannabinoids. Middleton’s plea agreement states that, from January through March 2013, she was employed as a national sales representative for ZenBio LLC (ZenBio). ZenBio was a “spice” manufacturing and distribution business that started in Pensacola, Florida, in November 2012. It continued the operations of another “spice” company, known as Zencense IncenseWorks LLC, which processed the drug in warehouses in Stockton and Millbrae.

The drugs were sold under the brand names “Bizarro,” “Orgazmo,” “Headhunter,” “Defcon,” “Neutronium,” “Sonic Zero,” “Sonic Boom,” “Sonic Blast,” “Shockwave,” “Hampster,” and “Posh.” ZenBio distributed these drugs during its approximate five-month lifespan. ZenBio generated in excess of $33 million from the sale of at least 24 tons of synthetic drugs. During the investigation of this case, law enforcement seized over $6 million in cash and assets derived from drug proceeds.

The charges against Middleton are the result of a probe involving U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the Fresno County Sheriff’s Office. The Food and Drug Administration also provided substantial assistance with the case.

Court documents reveal that, prior to her position with ZenBio, Middleton worked as a manager at the Stuffed Pipe, a chain of smoke shops located in Fresno, Visalia, and Bakersfield. The Stuffed Pipe previously sold ZenBio and Zencense “spice” products.

“Spice” refers to a smokable organic plant leaf that is laced with a synthetic cannabinoid, which is often a controlled substance or a controlled substance analogue. Public health and law enforcement agencies have seen the emergence of synthetic drug use. State and local public health departments note that synthetic cannabinoids cause serious adverse health effects, including agitation, anxiety, nausea, vomiting, tachycardia, elevated blood pressure, tremor, seizures, hallucinations, paranoid behavior, and even death.

Middleton is scheduled for sentencing Oct. 11. She faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain from the crime. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Last month, one of Middleton’s co-conspirators, Timothy New, 33, of Pensacola, Florida, pleaded guilty to the fraudulent interstate shipments of misbranded drugs. Two other co-defendants, Douglas Jason Way, 41, of Evanston, Illinois, and Timothy Ortiz, aka Michael Fitton, 45, of Waukegan, Illinois, have pleaded not guilty to various drug charges and are scheduled for a status conference Sept. 12. They face a maximum penalty of 20 years in prison and a $10 million fine.

Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.