FRESNO - Douglas Jason Way, aka Jason Way, 45, of Evanston, Illinois, was sentenced Monday to eleven years in prison following his conviction by a jury on five felony drug charges and two fraudulent misbranded drug charges, announced United States Attorney McGregor W. Scott; Special Agent in Charge Christopher Nielsen, Drug Enforcement Administration (DEA), San Francisco Field Division; and Special Agent in Charge Tara Sullivan, Internal Revenue Service-Criminal Investigation (IRS-CI), Oakland Field Office. The convictions concerned the manufacture and distribution of 24 tons of synthetic cannabinoids or designer drugs, commonly known at the street level as “spice,” “K2,” “herbal incense,” or “potpourri.”
Way was convicted following a four-week jury trial in federal court in Fresno in June and July 2018. Following his release from prison, Way will serve a three-year term of supervised release. As a further part of the sentence, U.S. District Judge Dale A. Drozd ordered a money judgment of $589,199.48 against Way. In addition to this money judgment, the U.S. Attorney’s Office previously forfeited more than $6.5 million of drug proceeds: $6,488,000 in cash and $191,000 in other assets, including a 2013 Ford F350 pickup truck and a 2014 Airstream travel trailer.
“Way led an illegal business manufacturing and distributing large quantities of harmful, mislabeled synthetic cannabinoids nationwide for profit,” said United States Attorney Scott. “The sentence imposed today reflects the seriousness of that crime and the danger these drugs pose to our communities. I am grateful to the dedicated efforts of our federal law enforcement partners, who conducted an intensive two-year investigation that led to Way’s prosecution and conviction, as well as the disgorgement of his illegally-gotten gains. We will continue to investigate and prosecute drug traffickers who masquerade as legitimate businessmen.”
“Synthetic cannabinoids are dangerous designer drugs that destroy lives. Today, Way is being held accountable for producing this poison and distributing it in communities throughout the country,” stated DEA Special Agent in Charge Chris Nielsen. “The success of this extensive investigation can be attributed to strong law enforcement partnerships and good police work.”
The trial evidence established that Way was the Executive Leader of ZenBio, LLC, a company that manufactured and distributed misbranded synthetic cannabinoids throughout the country, including to Stuffed Pipe smoke shops and other retail establishments in the Central Valley. The processing labs were located in Millbrae and Stockton, California, where raw synthetic drugs from China would be diluted with acetone and mixed in cement mixers with flavoring and smokeable dried plant material.
The finished product would be packaged in opaque metallic bags and sold as “potpourri” or “incense” under various brand names, including Bizarro, Headhunter, Neutronium, Sonic Zero, and Orgazmo. Documents found at the processing labs and in their computers showed that Way understood that XLR11, also known as 5-F-UR-144, one of the synthetic substances used in ZenBio products, were controlled substance analogues, that is, designer drugs that were substantially similar in chemical composition and pharmacological effect to a schedule I controlled substance. Way took significant steps to evade detection by law enforcement.
After law enforcement seizures of raw chemicals and finished synthetic cannabinoid products, he would reship the substances using a different carrier. He would not disclose the ingredients or potential adverse effects of the products. In fact, he would send lab reports with purchased goods that indicated what substances were not contained in the shipment. When confronted by DEA and IRS agents, he insisted that he was selling incense and that the drugs in China were added for a “smoldering” effect.
During the brief lifespan of ZenBio, Way made $589,199.48 in three months, and the company earned over $32 million. ZenBio employed about 200 employees who manufactured, shipped, and sold their products. The evidence at trial also showed that Way negotiated for the purchase of large quantities of XLR11 from China to manufacture the finished smokeable product.
At Way’s sentencing, Dr. Jordan Trecki, a DEA pharmacologist, testified that XLR11 can cause severe toxic effects, including acute kidney damage, organ and respiratory failure, rapid heartbeat, hypothermia, and death. The drug first made its appearance in the United States in 2011 and was scheduled by the DEA as a Schedule I controlled substance in May 2013.
This case was the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the DEA, IRS Criminal Investigations, and Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration (FDA), and the Fresno County Sheriff’s Office. Numerous other law enforcement agencies assisted in follow-up investigation, including the St. Cloud, Minnesota Police Department; Mars Hill, North Carolina Police Department; Montgomery County, North Carolina Sheriff’s Office; Buncombe County, North Carolina, Sherriff’s Office; and Willis, Texas Police Department.
The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General’s drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises. This OCDETF investigation was also part of a nationwide law enforcement effort coordinated by the DEA’s Special Operations Division. Assistant United States Attorneys Karen A. Escobar and Vincenza Rabenn prosecuted the case.
