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MORGANTOWN, WEST VIRGINIA - Civil actions have been filed against two Morgantown businesses that are alleged to have made millions of dollars by selling large quantities of synthetic marijuana.
United States Attorney William J. Ihlenfeld, II, was joined by other law enforcement leaders on Wednesday morning in announcing the action that was taken against businesses in Morgantown, West Virginia known as Mid-Nite Adult and the X-Hale Hookah Lounge. Federal search warrants were executed at each of the businesses on Tuesday afternoon, and on Wednesday morning Ihlenfeld filed civil complaints seeking to prevent X-Hale and Mid-Nite Adult from selling synthetic marijuana. The civil actions also seek to seize certain assets from the entities, including the business licenses of each as well as all inventory containing a controlled substance or a controlled substance analogue.
X-Hale is alleged to be owned and operated by Nicholas and Steven Graziano and is located at 218 Walnut Street, Morgantown, West Virginia. The business is incorporated under the name of Hookabuy, Inc., and was issued a business license by the State of West Virginia on July 20, 2010.
Mid-Nite Adult is alleged to be owned and operated by Daniel and Sally Kocan and is located at 275 Spruce Street in Morgantown. The business is incorporated under the name of Pit-ERI, LLC, and was issued a business license by the State of West Virginia on April 29, 2009.
The civil actions allege that both entities were selling significant amounts of synthetic marijuana, also known as synthetic cannabinoids. These are Schedule I controlled substances with similar effects as traditional marijuana. Synthetic cannabinoids are commonly packaged and labeled as “Spice", “Herbal incense", or “K2." As part of the investigation, undercover controlled purchases were made from both businesses and then the substances acquired were submitted to the DEA’s Mid-Atlantic Laboratory for analysis.
It is alleged that Mid-Nite Adult generated approximately $3.2 million over a 20 month period from the sale of synthetic marijuana. X-Hale is alleged to have generated just over $1 million over the same time period for selling the same product. The owners of X-Hale also are alleged to have purchased automobiles with proceeds from its enterprise, including a 2011 BMW 750I for $95,900.
In addition to searching Mid-Nite Adult and X-Hale, agents also searched the Morgantown business known as Dahlia’s on Walnut. Searches were conducted of the homes of the owners of the businesses, and bank accounts of the businesses and their owners were seized.
Ihlenfeld was joined in making the announcement on Wednesday by Chief Ed Preston of the Morgantown Police Department, Monongalia County Sheriff Al Kisner, and Jason Gandee, Supervisory Special Agent with Internal Revenue Service, Criminal Investigations.
“There is a common misperception that synthetic marijuana is safe to smoke," said Ihlenfeld. “In fact the opposite is true, as the substance is unpredictably dangerous and can cause serious medical problems, including excessive heart rate, kidney failure, seizures, and psychoses. And because every batch is different, and because there is no regulation or oversight, there’s no way for a user to know what effect it will have until it’s too late."
“Synthetic marijuana is a public health risk, and the action taken by law enforcement this week provides us with an excellent opportunity to educate the public about the harm that it can cause," said Chief Preston.
As a result of the searches on Tuesday evidence was recovered and is being processed by the Mon Valley Drug Task Force, which is leading the investigation. The Task Force consists of officers and agents from the Morgantown Police Department, the Monongalia County Sheriff’s Department, and the DEA. Agents from Internal Revenue Service- Criminal Investigations, and the Three Rivers Drug Task Force are also assisting with the matter. Officers from the Greater Harrison County Drug and Violent Crime Task Force assisted with the execution of the search warrants.
According to Ihlenfeld, no criminal charges have been filed, and the investigation is ongoing.
Source: U.S. Department of Justice, Office of the United States Attorneys
