------------------------------------------------------------------------------------------------------
International Ephedrine Smuggling and Money Laundering Ring Sentenced to Prison
Defendants forfeited profits of over $4,000,000 in bank accounts, real estate, an airplane, and luxury vehicles from the sale of precursor chemicals to Mexican methamphetamine manufacturers
PORTLAND, Ore.
UNITED STATES ATTORNEY'S OFFICE
District of Oregon
AUG. 04, 2011
– The last of five defendants involved in smuggling large quantities of ephedrine from India into the United States, Subhash Nathani, 40, of Noida, India, was sentenced today by U.S. District Judge Anna Brown to 54 months in prison. Naithani joined four co-defendants who were recently sentenced: Antonio Gonzalez, 57, of Tijuana, Mexico, 96 months in prison; Verlyn “Craig” Payton, 47, of Forest Grove, Oregon, 48 months in prison; Manoj Kovummal, 42, of Bangalore, India, 48 months in prison; and Sachin K. Sharma, 35, of Bombay, India, 54 months in prison. All five defendants were convicted of conspiracy to illegally import and distribute ephedrine, while Gonzalez and Payton were also convicted of conspiracy to commit money laundering. Ephedrine is the main precursor chemical necessary for the production of the controlled substance methamphetamine. As residents of India, Naithani, Kovummal, and Sharma were ordered deported to their native country when their sentences have been served.
Federal agents from Immigration and Customs Enforcement (ICE) and the Internal Revenue Service (IRS) began investigating this group during 2008 for suspicious banking activity involving Mexico, Forest Grove, and India, and for smuggling liquid ephedrine disguised as “green tea extract” into Chicago’s O’Hare International Airport directly from India. The investigation revealed that Antonio Gonzalez, a licensed U.S. Customs broker, from his locales in Tijuana, Mexico, and San Diego, together with Craig Payton of Forest Grove, Oregon, illegally imported over 50 shipments of mislabeled ephedrine products from India into the United States. After importation, the ephedrine products were sent to Gonzalez in the San Diego area for exportation to methamphetamine manufacturers in Mexico who in turn would send their illicit product back to the U.S. In November of 2009, all five defendants were arrested in Las Vegas, Nevada, where they were attending an international chemical extract conference. Search warrants were executed in Las Vegas, Forest Grove, and San Diego following their arrests. Law enforcement officials conservatively estimated that the ephedrine shipments would produce at least 2,500 pounds of pure ephedrine, 1,250 pounds of pure methamphetamine, and a gross profit of $20,000,000 to $38,000,000 from the sale of methamphetamine. Naithani acquired the ephedrine from a company in Bangalore, India, where co-defendant Kovummal worked and co-defendant Sharma was affiliated. Over a two and a half (2 ½) year period, Gonzalez through Payton’s business, Spring Dragon Sourcing, sent over $7,000,000 to India to purchase ephedrine. Another indicted conspirator, Fabian Samuel of Bangalore, India, was arrested in May of this year in Geneva, Switzerland, on similar ephedrine-smuggling conspiracy charges arising out of this investigation. He is currently in custody in Switzerland and fighting extradition to the United States. This Oregon-based investigation spawned similar ephedrine importation conspiracy investigations around the nation as federal agents detected various ways foreign nationals were working with U.S. citizens to circumvent strict ephedrine bans in both the United States and Mexico.
As part of the sentence, the court forfeited approximately $4,200,000 in assets. Among the assets forfeited were Gonzalez’ Cessna airplane, his luxury cars, including a Tesla electric roadster, real estate, and about $2,200,000 in bank and investment accounts. About 90% of the assets seized belonged to Gonzalez.
“This is the largest precursor chemical conspiracy ever prosecuted in Oregon, and one of the largest in the nation. With over $4,000,000 in assets seized, this is also one of the largest forfeitures we have ever had in this office. Stopping the flow of such enormous quantities of ephedrine into Mexico goes a long way toward stemming the tide of the poison methamphetamine’s return to the streets of the United States,” said United States Attorney Dwight C. Holton.
“These sentencings illustrate that greedy drug smugglers will ultimately pay a high price for their crimes,” said Leigh Winchell, Special Agent in Charge of ICE HSI in Seattle. “Methamphetamine is a vicious drug that destroys lives and ruins communities, and by bringing significant quantities of its dangerous precursor into our midst, the defendants seriously compromised the public’s safety and well-being. By sharing information and resources and following the money trail, HSI and its law enforcement partners have successfully dismantled this criminal organization’s heinous activities.”
“There were over 100 methamphetamine-related deaths last year in Oregon alone,” said Marcus Williams, the IRS Special Agent in Charge of the Pacific Northwest. “Prosecutions like this one are critical to stem the tide of pain and suffering that this drug brings. It took a financial investigation and good old fashioned police work to bring these defendants to justice.”
ICE and IRS agents were assisted in this investigation by United States Customs and Border Protection and the Drugs and Vice Division of the Portland Police Bureau. This case was an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF is a federally-funded program established in 1982 whose mission is to support comprehensive, multi-agency investigations designed to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations. This case was also an investigation under the Oregon High Intensity Drug Trafficking Area (HIDTA) program, a federally funded operation sponsored by the White House’s Office of National Drug Control Policy (ONDCP). HIDTA is a counterdrug grant program that provides funding, coordination, and intelligence resources to multi-agency drug enforcement task forces seeking to disrupt or dismantle local, multi-state, and international drug trafficking and money laundering organizations.
The case was prosecuted by Assistant United States Attorneys John F. Deits, Kathleen Bickers, and Leslie Westphal from the District of Oregon, with assistance from the U.S. Attorneys offices in Las Vegas and San Diego.
