Armed with the spoils of a successful international drug smuggling operation, members of the ring began indulging themselves in a little of the good life — buying a Ferrari 599, a Lamborghini Gallardo, a BMW 550i and two Mercedes-Benz S550s.
Now those lavish vehicles, along with four shared bank accounts, property holdings and more than $1 million in cash, are part of the federal government’s case against 11 people in Oklahoma, Las Vegas, California, New Mexico and Louisiana — two from Baton Rouge, two from New Orleans and one from Denham Springs — accused of smuggling chemicals under fake invoices and shipping manifests into the United States from China.
Once the chemicals arrived at their destination, members of the ring combined them to create different permutations of synthetic marijuana to sell at businesses in Baton Rouge and across the country.
The federal grand jury indictment, unsealed in conjunction with raids Tuesday after being handed down July 9, charges the 11 with conspiracy, smuggling and money laundering.
Two Baton Rouge residents — Tim Minh Tran, 42, and Ariel N. Dunn, 21 — were arrested Tuesday and accused of participating in the drug funneling scheme stretching from China to Louisiana to New Jersey. They were booked into the West Baton Rouge Parish Jail.
The Denham Springs man, Stanley Wayne Gunter, is incarcerated on different charges, a spokeswoman with the U.S. Attorney’s Office in Northern Oklahoma said, though she admitted she did not know where he was being held or what the charges are.
Agents in New Orleans on Tuesday arrested Liem Thanh “Johnny” Vu, while agents in Huntington Beach, California, arrested his brother, Duc Huy “Joe” Vu.
The indictment lays out a three-year operation.
Money transfers were made from American banks to banks in Hong Kong and other areas in China to purchase chemicals created in clandestine labs.
To get the goods to the U.S., the drug ring created fake shipping invoices and other paperwork to conceal the contents of the packages from U.S. customs agents, the indictment says. The shipping documents routinely stated the contents were food additives, dairy product stabilizers or cosmetics ingredients.
Agents used the money transfers along with text messages sent among the members to piece together the case.
Between April 8, 2011, when Tran ordered the first shipment of chemicals, and July 2013, ringleaders in the U.S. wired more than $1.3 million to their contact in China, Chen Cui “Helen” Feng, the indictment says.
Text messages showed the group used East Coast addresses for the deliveries so the packages would go through customs checks on the East Coast, which were seen as easier to pass than others, the indictment says. Then the conspirators would change the address where the package was headed in mid-delivery so it would go to whichever person paid for the chemicals.
Terry Davis, a spokesman for the Drug Enforcement Administration’s New Orleans office, said chemicals used to make synthetic marijuana are usually shipped in bulk from overseas in a powdered form, then put through a chemical process, which he would not divulge, to turn the powder into liquid.
The main chemicals are illegal in the United States, forcing enterprising dealers to look overseas, Davis said.
Once the powder is turned into a liquid, the chemicals are combined, sprayed onto a leafy, plantlike material, then dried before being packaged and sold.
The chemicals are cheap to obtain, creating the potential for massive profit margins, Davis said, pointing to a case in which a man bought 2 kilograms of powdered chemicals for $300, then made about $8,000 to $12,000 in profits.
In the early stages of the operation, Tran made most of the orders from China, including a shipment that federal Department of Homeland Security agents intercepted on July 22, 2011, the indictment says.
They learned the package contained about 70 ounces of AM-2201, one chemical in synthetic marijuana, and handed the package to Baton Rouge police narcotics detectives, according to an affidavit of probable cause for a prior arrest of Tran.
Four days later, detectives delivered the package to Tran’s Florida Boulevard business, Tim’s Warehouse, then stormed the business, armed with a search warrant, 15 minutes later.
Inside the warehouse, detectives found roughly 12 ounces of synthetic marijuana ready to be sold. Tran admitted to selling the marijuana, claiming he did not know it was illegal. He was sentenced to one year of probation.
Tran, however, continued ordering chemicals from China for the production of synthetic marijuana, with the next order coming on December 29, 2011, when he deposited more than $95,000 into a Regions Bank account for the purchase, the indictment says.
Soon, other defendants began ordering chemicals. Ban Lam, of Broken Arrow, Oklahoma, is accused of having eight packages shipped to his house in October 2012 and, a month later, of coordinating the shipment of 29 packages containing various chemicals from China to businesses in Baton Rouge, Las Vegas, California, Oklahoma and New Jersey.
The indictment does not indicate how agents learned about the drug ring.
The culmination of the investigation came Tuesday when agents executed three search warrants in Baton Rouge, including a raid on Tran’s recently built Centurion Avenue mansion, which is just off O’Neal Lane north of Interstate 12, and his business, Tim’s Wholesale, at 4000 Florida Boulevard.
Tran owned several limited liability companies based at 4000 Florida Boulevard, including THC ETC, Kush Herbal Incense and Novelty Worldwide, according to corporate filings with the state Secretary of State’s website.
“This comes as a big surprise to me,” Tran’s attorney, Lance Unglesby, said Wednesday of the federal allegations. “I’ve always known Tim to run a legitimate business, Tim to be a legitimate businessman.”
Unglesby said Tran’s family will be allowed to stay in the house during the criminal proceedings.
Dunn owned Kreative Kreole LLC, a smoke shop on O’Neal Lane, and formerly worked at The Attic 2, another smoke shop on O’Neal Lane. Both stores are named in the indictment as businesses participating in the operation.
At a hearing Wednesday in federal court in Baton Rouge, federal Magistrate Judge Stephen Riedlinger ordered Dunn released on her own recognizance with certain conditions, such as submitting to substance abuse testing.
“She certainly has not imported any goods into this country,” Dunn’s attorney, Townsend Myers, said outside the courthouse.
She is due for an initial appearance July 28 in federal court in Oklahoma, where the case will be prosecuted by federal prosecutors with the U.S. Attorney’s Office for the Northern District of Oklahoma.
This is not Dunn’s first run-in with law enforcement over synthetic marijuana.
In January, Dunn pleaded guilty in Caddo Parish to one count of possession of synthetic cannabinoids from an April 2013 incident. She was sentenced to a six-month suspended sentence and given one year of probation, according to the Caddo Parish Clerk of Court’s Office.
Follow Ryan Broussard on Twitter, @RyanMBroussard, and Ben Wallace on Twitter, @_BenWallace.