U.S. News

06.16.14

Feds Smoke Out Synthetic Weed Dealers’ Online Empire

They allegedly ran their far-flung, online drug-slinging operation like a buttoned-down business—until it all unraveled.

On December 6, 2011, Sean Libbert and Kyle Kledzik of Orange County, California, mailed 6 grams of a synthetic drug mixture which contained “a detectable amount” of AM-2201—a synthetic cannabinoid, which mimics the effects of marijuana—to a customer. The customer, identified by the U.S. Attorneys office California’s Central District only as “C.G.” suffered bodily injury so severe, that if Libbert and Kledzik are responsible, they could face a mandatory minimum sentence of life in prison.

C.G. was collateral damage in an online drug ring specializing in “spice,” “bath salts,” and the chemicals those substances consist of, that allegedly stretched from the Golden State, to Virginia, and all the way to Beijing, China.

On Friday, southern California arrested Libbert and Kledzik after a nearly three-year investigation into the drug empire they allegedly led with the help of co-conspirators Craig Neil, Jeremy Jennings, and Gabriel Afana. The synthetic drug prosecution was the first of its kind in southern California.

Synthetic drugs are substances which mimic the effects of Schedule 1 drugs like marijuana, cocaine, and methamphetamine, but the chemical compounds are slightly different, allowing manufacturers to circumvent drug laws and sell the products legally in places like gas stations. And the nonthreatening names on the labels like “Mr. Smiley” and “Scooby Snax” do nothing to scare off potential consumers. But because the contents of synthetic, or “designer,” drugs are often a mystery, their effects can’t be measured, and it often comes at a devastating cost to users’ health—and the substances are getting more popular everyday.

As The Daily Beast’s Abby Haglage reported in May:

In 2011 alone (the most recent year for which there is data), there were nearly 39,000 trips to the emergency room for [Spice, or synthetic marijuana], and more than 7,000 calls to poison control centers in the U.S. The side effects from the dangerous cocktails of synthetics range from psychosis to death. Almost daily, a news report will surface of a young teen who acted erratically while using fake pot. On Thursday, the focus was a 20-year-old in Detroit who hanged himself after ingesting Spice that he bought at a gas station.

Carol Chen, an Assistant U.S. Attorney in California, told The Daily Beast, “One of the potential hurdles of prosecuting these types of cases is just the unknown nature of these types of drugs.” Chen said, “Synthetic drugs are kind of like a new animal,” and producers are “constantly trying to get ahead of the law by tweaking different drugs just a little bit, thinking they’re going to avoid prosecution.”

Libbert, 38, of Newport Coast, has an extensive criminal resume, including grand theft and drug offenses dating to 2002. He was found to be heavily armed, possessing a .233 caliber CMMG AR-15-style rifle, a Benelli 12-gauge shotgun, a Smith & Wesson M&P 9mm pistol, a Smith & Wesson M&P 45-caliber pistol, and hundreds of rounds of ammunition.

But Libbert and his co-defendants didn’t act like typical, street-level dope slingers. “These individuals are, in effect, very savvy businessmen,” Chen told The Daily Beast. “These are sophisticated individuals—formally educated—nothing like the random street drug dealer on the corner.”

Libbert would purchase controlled substance analogues from domestic and international manufacturers “for the purpose of resale and usage in the manufacture of synthetic marijuana for human consumption,” according to the 54-page indictment.

On trips to Hong Kong and Beijing, the indictment adds, Libbert conspired with Jin Liu, Thomas Lau, “Wu,” “Simon,” and Andrew Zhang to bring the chemical products to the U.S., using “false and fraudulent invoices, declarations, affidavits” and “shipping and product packaging and labels, which were false and fraudulent in that they misrepresented the nature of, and severely devalued, the chemical products.”

Libbert would train his Chinese co-conspirators on smuggling and importing the products—and it worked. Between March 2010 and June 2012, Libbert allegedly smuggled and imported 300 kilograms of chemical products into the U.S., at a cost of $1.4 million.

Libbert then sold the analogues to others, including his co-conspirators, who would “then create synthetic marijuana for sale.”

Libbert created a company, RCS Labs Inc., and two websites, ResearchChemicalSupplier.com and RCSChemicals.com, where he would sell the analogues to customers in California, Florida, New Mexico, Idaho, Virginia, Georgia, New York, Illinois, Oregon, and even Alaska.

The synthetic marijuana was given the brand name “Da Kine Blend.”

They incorporated companies in states like Wyoming, and opened up numerous bank accounts—where they would often wire tens of thousands of dollars—and private mailboxes.

“These individuals are, in effect, very savvy businessmen. These are sophisticated individuals--formally educated--nothing like the random street drug dealer on the corner."

According to prosecutors, Libbert and his crew would email one another on weekly sales totals, invoices for the cost of marketing their product, the hours worked and the hourly rates earned by their employees, and they would discuss balancing the books. In an email between Libbert and Neil, Libbert warned of “the need to be careful to not issue commission checks based on sales from credit card transactions not yet finalized, in light of ‘sensitivity’ of banks with respect to insufficient accounts and bad checks.”

They were careful. Chen told The Daily Beast that in emails, “they often spoke in coded, vague terms…(referring to customers as ‘researchers,’ for example).”

Libbert’s cautious behavior even extended to the product packaging. He included, Chen said, “‘not intended for human consumption’ labels on the packages he sold throughout the United States,” and he used “false labels and invoices” when smuggling chemicals.

But they were, obviously, not careful enough.

The emails that helped run the business smoothly also helped take it out swiftly. “The emails we obtained pursuant to search warrants helped to uncover the smuggling conspiracy; the identities of some of his co-conspirators…the fact that it was an international scheme and Chinese nationals were involved; and the means by which he was smuggling the chemicals, selling them throughout the United States on drug websites, and also manufacturing his own brand of synthetic marijuana and their attempts to expand the empire,” Chen told The Daily Beast. “It led us to bank accounts, rental private mailboxes, and companies, all of which we followed up on.”