Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man pleaded guilty in federal court today to his role in a $6.7 million scheme that involved the distribution of approximately 2,253 kilograms of synthetic marijuana, commonly referred to as K2.
Douglas K. Franklin, 56, of Springfield, pleaded guilty before U.S. District Judge M. Douglas Harpool to conspiracy to commit mail fraud and to conspiracy to commit money laundering.
Franklin’s son and co-defendant, Brandon D. Franklin, 28, of Springfield, pleaded guilty to the same charges on Sept. 17, 2014. Charges against Douglas Franklin’s daughter, Caitlyn E. Franklin, 26, of Springfield, were dismissed following a pre-trial diversion agreement. Co-defendant DeWayne T. Barnhart, 37, of Joplin, pleaded guilty to receiving and distributing misbranded drugs and was sentenced to a term of probation.
Both Douglas and Brandon Franklin admitted they engaged in a mail fraud scheme by selling and shipping (via FedEx) Kryp2nite products, which were falsely labeled as “incense” and “not for human consumption,” but in reality contained a synthetic cannabinoid that was intended for human consumption as a drug. They manufactured and distributed K2 to retail outlets in Springfield, Joplin and elsewhere through their Springfield business, ThirdEye.
Douglas and Brandon Franklin deposited $2,933,854 in proceeds from the distribution of synthetic marijuana into bank accounts between Oct. 29, 2009, and April 30, 2011, when Douglas Franklin left the conspiracy. Brandon Franklin continued to distribute synthetic marijuana and deposited an additional $3,826,187 in proceeds into his bank accounts until Nov. 6, 2012 (for total deposits of $6,760,041). Based upon a review of invoices seized during the investigation, the Franklins charged approximately $3 per gram of synthetic cannabinoid. Therefore, Douglas Franklin distributed approximately 977 kilograms of synthetic cannabinoids during the time he participated in the conspiracy and Brandon Franklin distributed a total of approximately 2,253 kilograms of synthetic cannabinoids.
Douglas and Brandon Franklin also admitted to their roles in a money laundering conspiracy related to conducting financial transactions involving the proceeds of unlawful activity, which were designed to conceal or disguise the nature, location, source, ownership and control of the proceeds.
Under the terms of their plea agreements, Douglas and Brandon Franklin must forfeit to the government real estate in Springfield, Mo., Rogersville, Mo., Springfield, Ore., and Redding, Calif. Douglas Franklin must also forfeit to the government $802,632 as well as an unspecified amount of funds and monetary instruments contained in several bank accounts. Brandon Franklin also must forfeit to the government a money judgment of $6,760,041; the funds contained in several bank accounts totaling more than $535,000; and investment funds totaling $267,632.
Under federal statutes, Douglas and Brandon Franklin are each subject to a sentence of up to 40 years in federal prison without parole, plus a fine up to $750,000. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
These convictions are the result of a large-scale investigation by local, state and federal law enforcement agencies into the distribution of K2, the slang term for synthetic cannabinoid products. K2 is a mixture of plant material that has been sprayed or mixed with a synthetic chemical compound similar to THC (tetrahydrocannabinol), the psychoactive ingredient in marijuana. K2 products are often labeled as “incense,” but in reality are intended for human consumption as a drug.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Drug Enforcement Administration, the FDA Office of Criminal Investigations, IRS-Criminal Investigation, the Jasper County Drug Task Force, the Jasper County, Mo., Sheriff’s Department, the Joplin, Mo., Police Department, the Webb City, Mo., Police Department, the South Central Drug Task Force, the Missouri State Highway Patrol, the Springfield, Mo., Police Department, the Newton County, Mo., Sheriff’s Department and the Greene County, Mo., Prosecuting Attorney’s Office.