Feds Seize Over $2 Million from Retired Air Force Colonel Accused of Selling Synthetic Pot

Next week retired Air Force colonel William Oldenburg will go on trial for selling Spice, a synthetic marijuana product that he says police had told him was legal, at his two Boise, Idaho, stores: Pit Stop Express and Boise Beverage and Tobacco.

The U.S. Drug Enforcement Agency and local police raided the stores in May after a "multi-year" investigation of over a dozen tobacco stores and head shops in the Boise area. "Operation Not Fit For Human Consumption" netted 17 arrests.

Oldenburg, 65, along with a business partner, is also charged with selling drug paraphernalia, money laundering, and structuring transactions, a charge that contends he deposited money in amounts too small to trigger federal reporting requirements. Being convicted on the structuring charge alone could mean 10 years in jail and/or a $500,000 fine.

From the Idaho Statesman:

[Oldenburg] has no criminal record [and] estimates the government has seized more than $2 million in assets from him, including control of dozens of rental properties his lawyer says he acquired during his military service. He describes himself as a taxpaying citizen who follows the law. He's out of jail awaiting trial, and his stores remain open.

"This is more of the government attempting to disrupt the hard work of a retired Air Force colonel than actually punishing somebody for selling drug paraphernalia," said Oldenburg's court-appointed lawyer, Dennis Charney of Eagle. "The government has taken somebody who was pretty well off and could have afforded an attorney and has instead required the taxpayers to pay for his attorney. It's ridiculous."

…According to court documents, federal agents bought Spice at several of the stores, including from Oldenburg. But Charney said the substance they seized wasn't illegal—it was part of a new formula created in response to the Spice ban. Manufacturers simply change the formula to circumvent the new bans. The product often is sold as incense or potpourri.

Charney says Oldenburg, aware of the controversy surrounding the product, met with Boise police months before the investigation began and showed them the substance marketed to him as potpourri, and they told him it was legal.

Reason's Mike Riggs has the story on Spice, or K2, which was created with federal funding by the National Institute on Drug Abuse. Click here for more Reason coverage of criminal structuring.