SPRINGFIELD, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Camdenton, Mo., man was sentenced in federal court today for a mail fraud scheme that involved the distribution of more than $1.2 million of synthetic marijuana, commonly referred to as K2, from a head shop in Lebanon, Mo.
Stephen Brian Reynolds, 36, of Camdenton, Mo., was sentenced by U.S. District Judge Beth Phillips to six years in federal prison without parole. The court also ordered Reynolds to forfeit to the government $1,167,990, which was obtained from the distribution of K2, as well as real estate in Eldridge, Mo., funds in bank accounts, approximately $128,000 that was seized from Reynolds’s residence and a safe deposit box, a 2012 Jeep Grand Cherokee, a 2007 Ducati 1098 motorcycle, three pistols, two rifles and a shotgun.
Reynolds, the owner of Lucky’s Novelties in Lebanon, pleaded guilty on Aug. 15, 2014, to participating in a conspiracy to commit mail fraud and to one count of money laundering.
His brother, Eric Scott Reynolds, 33, of Lebanon, was employed at Lucky’s Novelties. Eric Reynolds has also pleaded guilty to his role in the mail fraud conspiracy and to participating in a money-laundering conspiracy. Eric Reynolds, whose bond has been revoked, remains in federal custody pending his sentencing hearing.
Stephen and Eric Reynolds both admitted they participated in a conspiracy to commit mail fraud from March 1, 2011, to Dec. 11, 2012. They defrauded the Food and Drug Administration and the public by using mail deliveries in a conspiracy to distribute several products that were labeled as “incense" or “potpourri" and “not for human consumption," when in reality these substances were synthetic marijuana intended for human consumption as a drug.
Between Sept. 15, 2011, and July 25, 2012, Stephen and Eric Reynolds deposited $1,245,761 in proceeds from the distribution of K2 into bank accounts and a safety deposit box. Based upon DEA undercover purchases, they charged approximately $1 for every 300 mg of K2. Therefore, they distributed approximately 373 kilograms of K2.
Reynolds was also part-owner of a Springfield, Mo., head shop known as Doobies, which he supplied with wholesale quantities of synthetic marijuana for distribution and from which he received 40 percent of the profits. His partners have also been sentenced in a separate but related case for their roles in a mail fraud conspiracy. Travis Basford, 30, of St. Robert, Mo., was sentenced to six years in federal prison without parole. Kerry Lee Long, 24, of Springfield, was sentenced to two years and six months in federal prison without parole.
Today’s sentencing also reflects the court’s finding that Stephen Reynolds was in possession of firearms in connection with the offense. When DEA agents searched his residence, they seized a Smith and Wesson.380-caliber pistol, a Ruger.380-caliber pistol, an FHN 5.7-caliber pistol, a Ruger AR-15 rifle, a Bushmaster ACR rifle, a Winchester 12-gauge shotgun, body armor and ammunition. Agents also seized cardboard boxes containing synthetic cannabinoids weighing approximately 58 kilograms. Agents also seized $7,506 from a safe in the garage. Law enforcement officers also executed a search warrant at Lucky’s Novelties and seized a handgun.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Drug Enforcement Administration, IRS-Criminal Investigations, the Laclede County, Mo., Sheriff’s Department, the Lebanon, Mo., Police Department and the Lake Area Narcotics Enforcement Group (LANEG).
Source: U.S. Department of Justice, Office of the United States Attorneys
