Watch CBS News

Owner Of Illegal Millbrae Drug Lab Pleads Guilty To Federal Charges

FRESNO (CBS SF) -- An Illinois man has pleaded guilty to running illegal drug labs in Millbrae and Stockton where tons of smokeable synthetic cannabinoids were created and distributed throughout the United States, according to U.S. Attorney Phillip A. Talbert.

Timothy Ortiz, who also went by the name of Michael Fitton, faces a maximum statutory penalty of three years in prison and a $250,000 fine, or twice the gross gain from the crime. Ortiz has also agreed to forfeit $137,110.

His 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.

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.

The drugs commonly known as "spice" or "K2" were sold under various brand names such as "Bizarro," "Orgazmo," or "Headhunter." They were distributed to the Stuffed Pipe smoke shops in the Central Valley and to numerous retail establishments throughout the United States.

Federal prosecutors said Ortiz set up the Millbrae processing lab and served as its director of operations and production manager.

Investigators said 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.

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, also known as Jason Way, 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.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.