The owner of Puff N Snuff LLC, with locations in Camdenton and Eldon, pleaded guilty Wednesday to his role in a money-laundering conspiracy related to the distribution of synthetic marijuana, commonly known as "K2."
Charles Sterling Austin Jr., 63, St. Charles, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth and, as the business owner, also pleaded guilty on behalf of the company to the same charge.
By pleading guilty, Austin admitted buying the synthetic marijuana from several sources, then selling it in his smoke shop, said Tammy Dickinson, the U.S. attorney for Western Missouri.
Austin knew his customers were using these synthetic cannabinoids as a drug, Dickinson said.
The packages of synthetic cannabinoids were sold under several trade names, such as "Mayan," "Island Breeze," "4bidden," "Remix," "Cheap Trip," "Dr. Feel Good," "White Rabbit," "XXXtreme Bliss Blueberry Sky" and "Deathgrip," among others.
Dickinson said the packages also bore false representations the contents were "incense" and "not for human consumption" when, in fact, the synthetic cannabinoids were intended for use as a drug.
The U.S. attorney said the false labeling was intended to defeat the Food and Drug Administration's regulations and assure customers they were not purchasing an illegal high.
According to a plea agreement, Austin made at least 28 bulk purchases of synthetic cannabinoids from at least two sources, totaling $707,412, between Aug. 3, 2012, and Feb. 19, 2013.
During the four-month period from Aug. 27 through Dec. 30, 2012, Austin deposited $1,687,180 into Puff N Snuff's bank account from the proceeds of the sale of synthetic cannabinoids, commingling the money with the proceeds from the sale of other products.
Undercover law enforcement agents purchased synthetic cannabinoids from Puff N Snuff on multiple occasions during 2012 and 2013.
On Sept. 10, 2013, law enforcement officers seized $423,327 from the business bank account. Austin must forfeit those funds to the government, under the plea agreement terms.
The plea agreement also said Austin wrote seven checks from Puff N Snuff's bank account totaling $134,750 as payment for construction of the Puff N Snuff building in Eldon.
Austin admitted the purchase of the land and the building construction costs were paid with proceeds from the sales of synthetic cannabinoids. He will forfeit the property to the government, as well as a money judgment of $707,412.
Under federal statutes, Austin is subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $500,000.
And the business, Puff N Snuff, is subject to a sentence of up to five years of probation and a fine up to $500,000.
A sentencing hearing will be scheduled after the completion of the U.S. Probation Office's pre-sentence investigation.