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Illinois resident sentenced for synthetic drug conspiracy

(FRESNO, Calif.) –Timothy Ortiz, 47, of Waukegan, Illinois, was sentenced today to three years in prison for conspiring to ship misbranded synthetic drugs in interstate commerce with intent to defraud, U.S. Attorney McGregor W. Scott and Drug Enforcement Administration Special Agent in Charge John J. Martin announced.

On August 14, 2017, Ortiz pleaded guilty. According to court documents, from December 2011 to October 2013, he, along with his co-defendants, Douglas Jason Way, 44, of Evanston, Illinois: Timothy New, 35, of Pensacola, Florida; and Natalie Middleton, 32, of Clovis, California, were involved in the importation of chemicals from China that were substantially similar in structure and pharmacological effect to a Schedule I controlled substance. Ortiz and his associates then diluted the chemicals with acetone and mixed it with dried plant material to produce a smokeable synthetic drug commonly known on the street as “spice.”  The drugs were packaged and falsely labeled to say that the contents were legal and were not intended for human consumption, when in fact they were illegal and were intended for human consumption.

Ortiz and his associates then shipped the drug from warehouses in Pensacola, Florida and Millbrae and Stockton, California to smoke shops, gas stations, and retail outlets throughout the United States. Ortiz, utilizing an alias of Michael Fitton, set up and managed the Millbrae processing lab after the synthetic drug company was purchased by the owner of multiple smoke shops in the Central Valley operating under the name of The Stuffed Pipe that sold the synthetic drugs.

According to the plea agreement, Ortiz and his co-defendants shipped at least 24 tons of misbranded smokeable synthetic cannabinoids that contained the synthetic drugs AM-2201 and XLR11 to smoke shops and retail outlets throughout the United States. They generated in excess of $33 million in sales. At the time of the illicit enterprise, AM-2201 was a schedule I controlled substance and XLR11 was a controlled substance analogue that was placed under schedule I as a controlled substance in May 2013.  In sentencing Ortiz, District Judge Dale A. Drozd also ordered Ortiz to forfeit $109,590, which Ortiz had derived from his four-month participation in the illegal operation.

This case is the product of an investigation by the Drug Enforcement Administration, Internal Revenue Service, Criminal Investigation, and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration and Fresno County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. As a result of this investigation, law enforcement agencies seized and forfeited over $6.6 million representing drug proceeds.

Co-defendant New previously entered a guilty plea to the fraudulent shipment of misbranded drugs and is currently serving a 30-month sentence. Middleton previously entered a guilty plea to money laundering, was sentenced to four months in prison, and is currently under supervised release for two years. Way has requested a jury trial, which is set for June 16, 2018. Way is charged with multiple controlled substance offenses, in addition to the misbranding charge, and faces a maximum penalty of 20 years in prison and a fine of $10 million. The charges against him are only allegations; Way is presumed innocent until and unless proven guilty beyond a reasonable doubt.


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