Federal Authorities Charge Texas Retail Chain Owner in Connection with Synthetic Marijuana Investigation

JWH-018.jpgThe owner of a Texas-based chain of retail stores, along with multiple store managers and others, is facing federal drug charges arising from an investigation by the Drug Enforcement Administration (DEA) into the alleged production, importation, and sale of synthetic marijuana. United States v. Gas Pipe, Inc., et al., No. 3:14-cr-00298, superseding indictment (N.D. Tex., May 6, 2015). The investigation became public last year, and an indictment was filed under seal at some point in 2014. In addition to drug-related charges, the defendant is charged with conspiracy to defraud the United States and money laundering.

The defendant owns and operates a chain of stores known as the Gas Pipe, which has locations in the Dallas/Fort Worth area, Austin, and Albuquerque, New Mexico. He opened his first location in Dallas in 1970 as a head shop, which sells smoking-related products. He and his company have reportedly had problems with law enforcement at various times since then, usually involving drug paraphernalia allegations. He faced forfeiture actions in 1981, 1982, and 1994. Each time, he recovered most or all of the seized property. A forfeiture lawsuit filed by federal prosecutors in 2006 resulted in a settlement.

DEA agents seized 10 of the chain’s 14 locations last year, along with almost $3 million from company bank accounts, after claiming that undercover agents purchased synthetic marijuana at those locations. “Synthetic marijuana” refers to a number of chemical substances that can mimic the effect of marijuana. They are often sprayed onto plant material and packaged under names like “K2” and “Spice.” Law enforcement officials state that synthetic marijuana has been connected to numerous hospitalizations and several deaths. Officials claimed that the product labeling identified it as “incense” and stated that it was “100% cannabinoid free” and “Not fit for human consumption.”

In addition to seizing the store locations and bank accounts, agents seized personal property owned by the defendant, as well as the Ridgelea Theater in Dallas. The defendant purchased the historic theater in 2010 and restored it. The National Park Service added it to the National Register of Historic Places in 2011.

Federal prosecutors charged the defendant and the company with multiple offenses in a sealed indictment in 2014. They also charged his daughter, who allegedly ran much of the business operations, and 26 other individuals, most of whom worked as store managers. The defendant and his daughter turned themselves in on May 13, 2015. All of the defendants were released on bond by a federal judge.

A superseding indictment filed in early May lists 17 counts and a forfeiture notice. Drug-related charges against the defendant include conspiracy to distribute a controlled substance, 21 U.S.C. § 846; conspiracy to distribute a controlled substance analogue, id.; distribution of a controlled substance near a public playground, 21 U.S.C. § 841(a)(1); importation of a controlled substance analogue, 21 U.S.C. § 952; maintaining drug-involved premises, 21 U.S.C. § 856(a)(1); and maintaining drug-involved premises in or near a public playground, id. The defendant is also charged with conspiracy to defraud the U.S. in connection with the alleged labeling of synthetic marijuana products, 18 U.S.C. § 371; and conspiracy to commit money laundering, 18 U.S.C. § 1956(h).

These blog posts are meant to be illustrative only. Unless expressly stated to the contrary herein, these matters are not the result of any legal work of Michael J. Brown, but are used to communicate a particular point of view. Michael J. Brown does not claim credit for any legal work done by any lawyer or law firm either generally or specifically, with respect to the matters contained in this blog.

Board-certified criminal defense attorney Michael J. Brown has represented defendants charged with alleged drug offenses in west Texas for more than 20 years. To schedule a confidential consultation with a member of our team, contact us today online or at (432) 687-5157.

More Blog Posts:

Legal Status of Marijuana Under Review by Texas Legislature, Texas Criminal Lawyer Blog, April 10, 2015
“Fair Sentencing” Laws Eliminate Mandatory Minimum Sentences, Sentencing Disparities for Certain Drug Offenses, Texas Criminal Lawyer Blog, January 26, 2015
Police Officer Helps Relative Obtain Illegal Drugs, then Uses that Information to Obtain a Search Warrant, Texas Criminal Lawyer Blog, December 17, 2014
Photo credit: By Psychonaught (Own work) [Public domain], via Wikimedia Commons.