When local law enforcement and federal agents raided a dozen head shops in the Treasure Valley last May, they didnt just seize a marijuana-like substance called Spice. They seized thousands of dollars in what they believed to be profits from the illicit sales. They seized cash from shop owners homes and cleaned out bank accounts containing hundreds of thousands of dollars.
If the suspects are convicted of crimes, more than $415,000 could be distributed among local and federal law enforcement through a legal process that involves forcing people by court order to relinquish cash and other property. Done locally and at the federal level, forfeitures have long been a way for authorities to go after what drives so many crimes: money.
The U.S. attorneys office in Idaho has seized more cash from criminals in the past three years than ever before, including $1.9 million for fiscal year 2011.
And if forfeitures continue at the current pace, that record could quickly be surpassed police in northern Idaho seized more than $400,000 during a routine traffic stop last May.
Now federal prosecutors in Boise are seeking to ensure the driver in that case and his presumed drug trafficking cohorts never see the cash again, and theyre doing the same with the shop owners charged in May. Local agencies who assist in forfeiture-related investigations get a portion of the money, depending on their role, and the rest goes to Washington, D.C. Federal and state laws require forfeitures drug proceeds be spent on drug enforcement.
Prosecutors routinely seek cars, electronics and other items believed to be connected to illegal activity. The U.S. attorneys office in Boise is currently seeking the Hogg Road property in Marsing where fugitive Boston mobster Enrico Ponzo lived as Jay Pace for 10 years before his arrest last fall, along with $120,000 found in the home.
Unless you can take the money out of the organization and punish whoever the individual is as far as sentences are concerned youre really just leaving the fuel for continued fire, said Rafael Gonzalez, first assistant U.S. attorney in Boise. Youre just in essence letting the individual suffer for the organization and letting the organization keep its proceeds.
But William Oldenburg, the 65-year-old owner of two businesses targeted in the Spice raids, said the governments actions have crippled his ability to hire a lawyer of his choice.
And he says it happened without justification: He has yet to be convicted of a crime and plans to fight the 11-count grand jury indictment at a trial scheduled for Nov. 27. Oldenburg, who retired from the Air Force as a colonel after nearly 30 years of service and has no criminal record, estimates the government has seized more than $2 million in assets from him, including control of dozens of rental properties his lawyer says he acquired during his military service. He describes himself as a taxpaying citizen who follows the law. Hes out of jail awaiting trial, and his stores remain open.
This is more of the government attempting to disrupt the hard work of a retired Air Force colonel than actually punishing somebody for selling drug paraphernalia, said Oldenburgs court-appointed lawyer, Dennis Charney of Eagle. The government has taken somebody who was pretty well off and could have afforded an attorney and has instead required the taxpayers to pay for his attorney. Its ridiculous.
SPICE: ILLEGAL OR NOT?
The high-profile raids in May were touted in the U.S. attorneys office as targeting the illegal sales of Spice, which essentially is synthetic marijuana, but none of the 17 people indicted in U.S. District Court were charged with anything related to Spice until a grand jury indictment filed Friday. Previous charges related only to drug paraphernalia.
Ten people charged have accepted plea deals. Three have avoided federal prison and been sentenced to probation and community service or home detention; others are awaiting sentencing or trial.
Oldenburg and his business partner and son-in-law, Donovan Johns, are charged with conspiracy to sell drug paraphernalia and offering drug paraphernalia for sale, both which carry up penalties of to three years in prison. Oldenburg also is charged with six drug felonies related to the Spice sales as well as conspiracy to launder money. Oldenburg and Johns each are charged with conspiracy to structure transactions, which carries a maximum 10-year sentence. The charge essentially accuses the men of manipulating their business finances to avoid reporting all their assets to the government.
Pamela Bearg, spokeswoman for the U.S. attorneys office, declined to comment on the ongoing case.
According to court documents, federal agents bought Spice at several of the stores, including from Oldenburg. But Charney said the substance they seized wasnt illegal it was part of a new formula created in response to the Spice ban. Manufacturers simply change the formula to circumvent the new bans. The product often is sold as incense or potpourri.
Charney says Oldenburg, aware of the controversy surrounding the product, met with Boise police months before the investigation began and showed them the substance marketed to him as potpourri, and they told him it was legal.
This has been a game of legal cat and mouse for several years, Charney said. The issue is the DEA doesnt like the fact that people who were selling Spice were doing so legally, because they felt it should be illegal.
Lynn Hightower, spokeswoman for the Boise Police Department, declined to comment, saying she couldnt respond to issues that might be raised at trial.
That will have to come from court, Hightower said.
A LENGTHY INVESTIGATION
The DEA began investigating the head shops in November 2011 in conjunction with other law enforcement agencies after fielding complaints about Spice and drug paraphernalia sales, according to court documents.
While businesses across the country advertise and sell as tobacco products pipes, bongs and other paraphernalia typically associated with marijuana consumption, federal law prohibits sales of items designed specifically for drug use. Some business owners also sell Spice and other illegal substances as legal potpourri or incense and label the packages not for human consumption to avoid law enforcement scrutiny.
Undercover federal agents visited the shops and noted pipes and bongs with Bob Marley stickers and references to 420, which has long been a reference to smoking marijuana. Those items are crucial to the governments argument that Oldenburg and Johns knew they were selling items that would be used for marijuana.
In prepared statements released the day of the May 10 raids, DEA Special Agent in Charge Matthew Barnes referred to the shops as criminal organizations that masquerade as legitimate storefronts to sell drug paraphernalia to our children and U.S. Attorney for Idaho Wendy Olson praised the investigation as an ongoing effort to attack drug trafficking on all fronts.
In another statement released Friday, Olson said, We are committed to attacking drug trafficking on all fronts. Although we dont yet know the full toll that these substances that mimic cannabis have taken on users, we do know that emergency room workers, parents and law enforcement officers all have terrifying stories of medically dangerous and sometimes deadly reactions. In Idaho, we are proud to stand with DEA and our colleagues throughout the nation in taking these strong steps to combat this growing drug problem.
But Charney said authorities are trying to shift personal responsibility from the person misusing the product to the person selling the product.
I could go into Evans Building Center here in Eagle and buy the materials necessary to make myself a little bong, Charney said. That doesnt mean Evans Building Center is liable for my choice to use items I purchased there in an illegal manner.
Its unclear how much money local agencies could receive from the forfeitures because it depends on the outcome of the trials.
The bulk of the cash about $253,000 came from bank accounts connected to Boise Beverage and Tobacco and the Pit Shop Express, owned by Oldenburg and Johns. Most of the other shops targeted in May have closed.
Oldenburgs forfeiture case is not the only cash forfeiture related to the Spice cases, but its by far the largest.
Troy Rawlings and his brother-in-law, Jason Guerrero, who owned the Smoke Shack and the Smoke Shack 2, could lose at least $171,000 $60,000 of which was found in Rawlings home in south Meridian. The rest of the money was found in five bank accounts associated with the businesses. Both men are out of jail awaiting trial. Guerreros trial is scheduled for March 12.
The vast majority of these types of situations tend to end up with some sort of plea, but were not there yet, said Guerreros lawyer, Jeffrey Heineman.
Heineman said a suspects decision to accept a plea deal could depend on how much the government is seeking in forfeiture.
Its always a balancing act between your liberty and the money and property you may be losing, Heineman said.
Meghann M. Cuniff: 377-6418