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Prosecutors: Trio couldn't keep up with K2 demand

4/8/2013

By BILL DRAPER

By BILL DRAPER

Associated Press

KANSAS CITY, Mo. -- Demand for a synthetic marijuana concoction whipped up in an eastern Kansas warehouse became so strong that suppliers had a hard time filling orders, federal prosecutors said in a 64-page indictment charging three men with distributing misbranded drugs to customers around the globe.

The indictment filed last week against Bradley Miller, 55, of Wichita; his brother, Clark Sloan, 54, of Tonganoxie; and Sloan's son, Jonathan Sloan, 32, of Lawrence, details a cat-and-mouse game between owners of a Lawrence herbal shop and state and federal authorities trying to keep up with a rapidly evolving synthetic drug boom.

"Cases like this are important because these are chemists making synthetic drugs and trying to stay ahead of state and federal laws," U.S. Attorney Barry Grissom said Thursday. "You have a scenario in which a drug is in question, legislation is advanced to prohibit the drug, and chemists around the country are smart enough to stay ahead of the curve."

Miller introduced K2 as a product that could be sold at a Lawrence herb shop he co-owned, Persophone's Journey, in early 2009 after coming back from a trip to China, prosecutors said. K2 was billed as a safe, legal alternative to marijuana and immediately became wildly popular because of its euphoric characteristics, relatively cheap cost and lack of banned substances that could be detected in drug tests.

The defendants also marketed a Chinese-made diet drug called Que She, which had been banned in the U.S., prosecutors said. The drug sometimes was labeled as "health products" or "Garlic P.E." when shipped to the U.S., they said, and advertised as "a Revolution in Weight Loss" by Bouncing Bears Botanicals, a mail-order business owned by Clark Sloan and Miller.

The compound used to make K2 was not illegal when the men first started selling the fake pot, Grissom said. But mislabeling drugs is a federal crime, and that spawned other charges against the men, including conspiracy, mail fraud, smuggling, distributing misbranded drugs and conspiracy to commit money laundering, he said.

Tom Bath, an Overland Park, Kan., attorney who represents Jonathan Sloan, noted state charges against his client over products sold at his Lawrence shop had been dismissed in the past.

"We are in the process of going through the indictment and will be pleading not guilty in court and challenging the allegations," Bath said.

Miller's attorney said he couldn't comment, and Grissom's office did not know Thursday if Clark Sloan had obtained an attorney. None of the men have been taken into custody.

Prosecutors said Miller initially manufactured K2 in his garage before expanding to a warehouse in Oskaloosa, where he could produce 5 to 10 kilograms per night but still not come close to meeting worldwide demand. At one point, the men were bringing in $150,000 a week from K2 sales, prosecutors said, and made about $3.3 million overall from the sale of K2 and Que She.

In August 2009, while promoting K2 at a trade show in Las Vegas, Miller and Jonathan Sloan handed out single-gram samples under a banner that read "Smoke it, Feel it, Share it," prosecutors said. But after other participants at the show warned that marketing K2 as a smokable product was illegal, Jonathan Sloan had the banner taken down and afterward marketed K2 as "incense," according to the indictment.

The indictment includes email exchanges among the three men that suggest they knew their lucrative business venture probably wasn't going to last long.

In one such exchange, Clark Sloan sent an email to his son December 31, 2009, warning him that efforts to ban K2 were heating up and they need to be careful, prosecutors said.

"I read just yesterday that law/bill (whatever it is), that makes everything illegal if it is trying to simulate the illegal drug," the senior Sloan wrote. "If it wasn't for that, I'd say milk K2 for a few more months. $150,000 a week isn't too bad. And it keeps going up. So, get a couple million over the next few months. Then sell it at an even higher price. But... . Too scary. Not worth 20 years in San Quentin."

Instead of rushing to stop K2 sales, Jonathan Sloan testified Jan. 18, 2010, before the Kansas Legislature against a proposal to designate the chemical compounds used in making K2 as a Schedule I drug. During his testimony, Sloan said K2 had those compounds and insisted they had health benefits that include being useful for pain and insomnia.

Clark Sloan sent the men another email Jan. 27, 2010, telling them he had decided that selling fake marijuana went against the mission of Bouncing Bear Botanicals, which was to provide natural herbs to its customers.

"BBB is now just a huge drug dealer," he wrote. "When pointing out that the feds are breathing down BBB's neck, it is just 'we got a new synthetic we'll use, and just invent another fake drug.' ... 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."