Three men behind a Lawrence herbal shop and mail order business, including a Tonganoxie, Kan., man, were indicted in federal court Wednesday, accused of running a worldwide synthetic marijuana operation that brought them more than $3 million.
Clark Sloan of Tonganoxie; his son, Jonathan Sloan of Lawrence; and Clark Sloan’s brother, Bradley Miller of Wichita, are charged with conspiracy, distribution of misbranded drugs, mail fraud and smuggling. The indictment alleges they manufactured and distributed K2 as an “all natural” product, but in reality it contained synthetic chemicals that mimic the effect of marijuana, as well as solvents and other additives.
The men were co-owners of two Lawrence businesses that specialize in exotic herbal and other products: Persephone’s Journey on Massachusetts Street and Bouncing Bear Botanicals, which operated out of the basement before expanding to a warehouse in Oskaloosa, Kan. Persephone’s Journey later changed its name to The Sacred Journey.
The indictment alleges the illegal scheme to defraud the government and the public began in 2009 and involved not only K2 but also “Que She,” a misbranded drug from China that contains at least one substance whose approval by the U.S. Food and Drug Administration was pulled for safety concerns. The defendants allegedly marketed and distributed Que She as an “all natural” weight loss product.
The defendants also are said to have mixed synthetic compounds with dried herbs to create at least four types of K2 products with varying flavors and potencies. They also allegedly used a solvent such as Everclear or acetone on the herbs.
Miller, 55, allegedly developed recipes for and manufactured the K2, producing 5 to 10 kilograms per night, working at night because of the odor of the solvents. Clark Sloan, 54, allegedly developed and monitored the Bouncing Bear Botanicals’ website and worked in marketing. Jonathan Sloan, 32, allegedly was responsible for daily business operations and finances.
The indictment says Miller and Jonathan Sloan claim to own the trademark K2, which is named after the world’s second-highest mountain, an appellation allegedly meant to suggest its users could get high. K2 is now illegal in both Kansas and Missouri.
According to the indictment, the defendants marketed, sold and distributed their products to wholesalers and retailers in and outside the United States, building a chain that reached from South America to Asia and Eastern Europe.
The K2 products were falsely referred to as incense and labeled “not for consumption” for the purpose of trying to avoid regulatory requirements, prosecutors say, but brochures touted their potential health benefits. Instead, K2 has been known to cause heart and respiratory problems and can lead to convulsions.
Emails among defendants, included in the indictment, allegedly indicate they were aware they were playing a dangerous game trying to stay ahead of federal investigators.
A January 2010 email allegedly from Clark Sloan to the other defendants read: “I know that money looks good. But, I think it is walking a shaky line. Playing one step ahead of the feds is whacked out. They know who you are. They are watching you.”
Potential penalties include up to 20 years for each count of mail fraud, smuggling and conspiracy to commit money laundering.