FRESNO, Calif. — Timothy Ortiz, aka Michael Fitton, 46, of Waukegan, Illinois, pleaded guilty today for his role in a large-scale smokeable synthetic cannabinoids trafficking organization that shipped misbranded synthetic drugs interstate from a processing lab in Millbrae, California, U.S. Attorney Phillip A. Talbert announced.
Smokeable synthetic cannabinoids, commonly known as “spice” or “K2,” is falsely touted as legal alternatives to controlled substances. In some instances, they are far more lethal.
In pleading guilty, Ortiz acknowledged that from 2011 to 2013, he was involved in the importation of raw synthetic cannabis from China that was processed and distributed from warehouses in Pensacola, Florida and Millbrae and Stockton, California. Ortiz set up the Millbrae processing lab and served as its director of operations and production manager. The drugs were sold under various brand names such as “Bizarro,” “Orgazmo,” or “Headhunter.” To evade detection by federal law enforcement, Ortiz and his co-defendants deliberately misbranded and marketed their product as “potpourri” or “herbal incense” that they claimed was “not for human consumption,” even though they knew that it would be used as an intoxicant.
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. Ortiz has agreed to forfeit $137,110, which represents the proceeds that he derived during his participation in the illegal operation. Ortiz and his co‑defendants distributed the drugs to the Stuffed Pipe smoke shops in the Central Valley and to numerous retail establishments throughout the United States.
This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the Drug Enforcement Administration; the Internal Revenue Service, Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration and the Fresno County Sheriff’s Office. 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 U.S. Attorney General’s 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 U.S. Attorney Karen A. Escobar is prosecuting the case.
Ortiz is scheduled for sentencing on October 30, 2017. He faces a maximum statutory penalty of three years in prison and a $250,000 fine, or twice the gross gain from the crime. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Co-defendants Timothy New, 34, of Pensacola, Florida, pleaded guilty to the fraudulent shipment of misbranded drugs, and Natalie Middleton, 31, of Clovis, pleaded guilty to money laundering. In December 2016, New was sentenced to two and a half years in prison and Middleton was sentenced to four months in prison. Douglas Jason Way, aka Jason Way, 44, of Evanston, Illinois, is scheduled for a jury trial in February 2018. Way is charged with multiple controlled substance offenses and the misbranding charge, and if found guilty, faces a maximum penalty of 20 years in prison and a $10 million fine. The charges against him are only allegations; Way is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Department of Justice
Office of the U.S. Attorney
Eastern District of California