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M&C Wholesale : The Dragon’s Den Smoke Shop (operation log jam)

  1. Basoodler
    Just-released records in Maryland’s federal court show the Dragon’s Den Smoke Shop in Fells Point and the Tobacco Shop in Bel Air are part of an ongoing drug investigation into the distribution of synthetic marijuana, sometimes marketed as “Spice” and “K2,” which was banned last year. The role each shop played is spelled out in a warrant for the seizure of more than $2.2 million from M&C Wholesale, a company in Laguna Niguel, Calif., south of Los Angeles, suspected of supplying synthetic marijuana to head shops, including the Dragon’s Den and the Tobacco Shop. The seizure occurred July 25, the same day a multi-agency federal crackdown on banned designer drugs descended on 91 communities in 31 states, according to a U.S. Drug Enforcement Administration (DEA) press release. Dubbed “Operation Log Jam,” the operation netted nearly 100 arrests and the seizure of more than $36 million and more than five million packets of synthetic weed and “bath salts,” designer stimulants that also were banned last year. Baltimore was not among Operation Log Jam’s long list of targeted communities, but Laguna Niguel was, perhaps due to the M&C Wholesale money seizure.

    Last winter, the Dragon’s Den was implicated in an undercover DEA operation that resulted in an indictment against a Baltimore man, Carlo D’Addario, for allegedly supplying bath salts to distributors in Virginia (“Undercover in the Dragon’s Den,” Mobtown Beat, May 30). The disclosure of the shop’s role in the fake-pot investigation came in court filings made public on the afternoon of Aug. 21, after City Paper went to press with an Aug. 22 article about the sentencing of Holly Renae Sprouse, D’Addario’s co-defendant in the Virginia bath salts case (“Bath Time,” Mobtown Beat, Aug. 22).

    Sprouse, after prosecutors filed a motion recognizing her “substantial assistance” in prosecuting D’Addario, received a lenient, 20-month prison sentence on Aug. 14 for her role in the alleged conspiracy. The trial in the case, initially scheduled for May, has since been rescheduled twice. D’Addario is currently set to stand trial starting on Oct. 22.

    The investigation leading to the M&C Wholesale seizure began last September, according to the warrant, when a DEA undercover officer entered the Tobacco Shop and purchased a gram of “Hysteria,” a fake-pot brand, for $20. In November, the same undercover officer returned to the shop and purchased another three grams of Hysteria for $47. The place was raided in December, turning up invoices for its wholesale purchases of the substances, branded not only as Hysteria, but also “Black Sabbath” and “Game Over.”

    Using contact information from the invoices seized from the Tobacco Shop, agents arranged for a confidential source to order fake-pot products from the wholesaler in early April, and have it delivered to the Dragon’s Den in Fells Point. Two packages arrived there on April 4 and 5, containing packages of “Dr. Feelgood,” “Game Over XXX,” “Brain Freeze,” and “Black Sabbath,” along with documentation of the purchases from M&C Wholesale.

    The operation then began surveillance of M&C Wholesale’s offices in Laguna Niguel, watching on June 11 and 12 as operators and employees managed incoming and outgoing deliveries. Later, in July, investigators were contacted by a courier-service employee that made and picked up deliveries there, and had seen its operations. The courier informed them that the only activity going on inside was “eight to 10 individuals seated around a table handling piles of a green herb-like substance.”

    The investigation also probed M&C Wholesale’s financial transactions, learning that it gets paid for providing supplies to smoke shops with names such as “Puff N Snuff,” “Happy Daze,” “Up in Smoke,” and “Sky High Smoking Accessories.” Payments would enter an M&C bank account at Wells Fargo. Then, on July 24—the day before the seizure—$2.2 million was transferred from that account to another Wells Fargo account, held in the name of individual who is a signatory of M&C Wholesale’s account.
    CP searched federal court records as well as those in Orange County, Calif., where Laguna Niguel is located, and found nothing to suggest M&C’s owners and operators have been charged with any crimes. Two phone numbers for them were included in the warrant. One of the numbers has been disconnected, and messages left at the other were not returned.

    According to the Operation Log Jam press release, the probe is a partnership of seven federal law-enforcement agencies—DEA, IRS Criminal Investigations, FBI, U.S. Immigration and Customs Enforcement, U.S. Postal Inspection Service, U.S. Customs and Border Protection, and U.S. Food and Drug Administration Office of Criminal Investigations—in tandem with “countless state and local law enforcement members.” DEA administrator Michele Leonhart is quoted, saying “this enforcement action has disrupted the entire illegal industry, from manufacturers to retailers,” and emphasizing that “we are committed to targeting these new and emerging drugs with every scientific, legislative, and investigative tool at our disposal.”



  1. Basoodler
    Undercover in the Dragon’s Den
    Virginia “bath salts” investigation nabs Fells Point smoke shop

    [imgl=white]http://www.drugs-forum.com/forum/attachment.php?attachmentid=30584&stc=1&d=1356448813[/imgl]Last December, about two months after synthetic stimulants used in “bath salts” were put in the same class of federally banned substances as heroin and cocaine, two customers plunked down $675 for some at the Dragon’s Den Smoke Shop in Fells Point. They did the same in January, buying packets of powder branded as “Speedy Gonzalez,” “Incredible Hulk,” “Taz,” and, during the January visit, “Bugs Bunny.” Each time, the guy they bought it from, Carlo D’Addario, explained that some people smoke the stuff while others snort it, according to court documents.

    Those two visits to the Dragon’s Den gave the “customers,” who were part of a drug probe and had recorded what transpired on audio and video, evidence for an indictment and search warrants. The court documents spell out how, since last July, law enforcers with the Augusta County, Va., Sheriff’s Office and the Richmond, Va., and Baltimore offices of the U.S. Drug Enforcement Administration (DEA) had targeted D’Addario, building a case that he is a source of now illegal bath salts sold in Virginia.

    On March 1, the investigation culminated with raids on the Dragon’s Den and D’Addario’s home on Pot Spring Road in Timonium and the unsealing of the indictment, first filed on Feb. 22, against D’Addario and his co-defendant, a Virginia woman named Holly Renae Sprouse.

    In the past two years or so, the sudden popularity of bath salts, which were lawful, taxed commodities typically found in convenience stores, gas stations, head shops, and the like, has coincided with a spike in medical emergencies reported as related to its abuse, including violent and self-destructive reactions that have grabbed headlines. The feds and many states have consequently outlawed them.

    The banned compounds have names comprised of lengthy combinations of numbers and letters, but popularly they are known as MDPV, 4-MEC, and MDMC (also called methylone). (For the hard-core chemists out there, who probably already know this, they are related to cathinones, alkaloids found in the khat plant.) The effects of these designer drugs are said to be similar to other stimulants such as methamphetamine and ecstasy, and are described in a DEA fact sheet as “feelings of empathy, stimulation, alertness, euphoria, and awareness of senses.” One of them, methylone, was patented in 1996 as an antidepressant.

    “First there was ‘K-2’ and ‘Spice,’” says Mark Campbell, supervisor of Virginia’s RUSH Drug Task Force, based in Harrisonburg, Va., referring to synthetic cannabis, which also became a craze, prompted scares due to reports of medical emergencies, and was listed as a controlled substance. “Now it’s ‘bath salts,” Campbell continues. “It’s the ‘in’ thing right now. The perception has been that it is legal and that there are no health issues, and that just couldn’t be further from the truth.” Users, Campbell says, tend to be young, and they don’t just snort or smoke bath salts, which come in powder form; they also “put it in a spoon, heat it up, and turn a solid to liquid” to inject intravenously, like heroin.

    Campbell says the profit margin from dealing bath salts is “ridiculous.” The court documents in D’Addario’s case say that street prices range from $40 to $100 per gram, and that each gram contains eight to 40 doses. At those prices, the 20.6 grams allegedly sold by D’Addario for $675 in the undercover operation at the Dragon’s Den on Dec. 13, 2011, at $33 a gram, could have been quite profitable.

    The take from the March 1 raids of the Dragon’s Den, according to court records, was prodigious: more than 100 containers—jars, packets, boxes, and the like—labeled with names such as “Dragon’s Breath,” “Bayou Blaster,” “Get Twisted,” “Zombie Matter,” and “Super Villain.” Among the items agents seized from D’Addario’s Timonium home are “suspected K-2 spice,” “tablets” of other drugs, a “tally sheet” of transactions, and an “undetermined” amount of U.S. currency in a “basement safe.”

    D’Addario’s co-defendant, Sprouse, pleaded guilty on May 8 and her sentencing is scheduled for August. The factual statement attached to Sprouse’s guilty plea does not name D’Addario, but mentions her “Baltimore supplier” and says she was arrested twice last year—in August and October—in connection with bath-salts possession, and after the second arrest she began to assist law enforcers in their probe. If D’Addario does not plead guilty, but instead chooses to assert his innocence before a jury, his trial is scheduled to take two days starting June 28.

    D’Addario’s attorney, Andrew Carter Graves, said he and his client would have no comment for this article. City Paper called the Dragon’s Den and spoke to a woman, who said she was the manager and called herself Chrissy. She offered to try to get in contact with D’Addario, whom she described as the shop’s owner, and put the call on hold. A few minutes later, a man picked up the phone, refused to disclose his first or last name, and explained, “We were told not to talk to you.” When asked who gave those instructions, he said, “the DEA guy in charge of the investigation.”

  2. Basoodler
    Bath Time
    Cooperator sentenced in Dragon’s Den bath salts case

    August 22, 2012

    When two customers purchased about 20 grams of “Speedy” for $675 at the Dragon’s Den Smoke Shop in Fells Point last December, the guy who sold it to them, Carlo D’Addario, told them that some people smoke the substance, while others snort it. Turns out, there’s another way to use “Speedy,” a brand name for the recently outlawed class of chemicals known as bath salts: intravenous injection.

    The customers were part of an undercover operation, and D’Addario was indicted in federal court in February, accused of supplying bath salts to distributors in Virginia, including to Holly Renae Sprouse, his co-defendant in the case (“Undercover in the Dragon’s Den,” Mobtown Beat, May 30).

    “Sprouse reports she used [bath salts] intravenously two to three times a day until her arrest in October of 2011,” court documents state.

    Sprouse, who has a prior state drug conviction for which she served two years in prison in the mid-2000s, pleaded guilty in May to one drug-conspiracy count. On Aug. 14, U.S. District Judge Michael Urbanski sentenced her to 20 months in prison, followed by five years of supervised release. She had faced a maximum sentence of 20 years, though federal sentencing guidelines recommended a range of 37 to 46 months of incarceration. Sprouse’s lenient sentence was due, in part, to assistant U.S. attorney Ronald Huber’s motion recognizing her “substantial assistance” in prosecuting D’Addario.

    Dealing with Sprouse appears to have been an adventure for investigators in the case, court records show. Her initial bath salts arrest, in Aug. 2011, resulted from a raid on her home in Craigsville, Va., near Shenandoah National Park, that turned up “numerous bags” of bath salts, along with “receipts and money orders from her supplier in Baltimore,” according to court records. She was charged in state court with numerous crimes—drug-dealing, obstruction of justice, and escape—and released on bail. On the afternoon of Oct. 28, she was arrested again—but did not go easily.

    “As I was walking back to Holly,” an Augusta County Sheriff’s officer wrote in a report about the incident, “I noticed that she had slipped out of one of the [hand]cuffs. She took off running. She ran across the interstate in front of moving traffic. Several cars and a tractor trailer almost hit the deputies in pursuit.”

    A portion of the report was made part of the record in the federal case against Sprouse, but it doesn’t indicate the interstate where the arrest took place. It does, however, state that “Holly made it across the interstate and median,” that officers tried unsuccessfully to Taser her, and that, when they finally were able to trip her, “her head and body fell just short of west bound traffic.” She “fought the officers on the ground,” but they were able to “gain control after a struggle.” Traffic was “shut down . . . causing quite a backup.”

    After her first arrest, Sprouse had provided information about her Baltimore supplier, but it was after her second arrest that Sprouse began to “cooperate with law enforcement,” according to court records. The search warrant used to justify March 1 law-enforcement raids on the Dragon’s Den and D’Addario’s home on Pot Spring Road in Timonium describes a cooperator, dubbed “CW1” (confidential witness 1), whose circumstances match up with those of Sprouse.

    CW1, the warrant explains, “purchased approximately forty packages of ‘White Horse’ bath salts” and “several packages of ‘Jack Rabbit’ bath salts” from D’Addario at his home last summer, as well as “packages of White Horse, Incredible Hulk, and Speedy Gonzales ‘bath salts’ from D’Addario at Dragon’s Den.”

    The two-day jury trial in the case was initially scheduled for May 8, but was reset for June 28-29 after Sprouse pleaded guilty. It has since been rescheduled again, with D’Addario set to go before jurors starting on Oct. 22.

    Sprouse’s attorney, Frederick Heblich, argued strenuously in court filings that his client should be sentenced to time served since her arrest last fall. He detailed her troubled personal history, including untreated mental-health problems and having had four children by four different men. She gave birth to one of them while in prison, and another was taken from her after she visited a hospital emergency room due to a reaction to bath salts she’d taken. Heblich wrote that Sprouse was introduced to abusing and dealing drugs by family members, including her father, an imprisoned methamphetamine dealer.

    “One would think,” Heblich argued, “the most important factor in a case such as this would be to bring the attention of the public, in general, and potential abusers, in particular, that although [bath salts] are advertised as being legal, or at least in some gray area between legal and prohibited, they are in fact illegal—not to mention dangers—to possess or distribute.”

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