http://www.stltoday.com/stltoday/ne...are+accused+of+diverting+pills+to+meth+labs++
Dozens are accused of diverting pills to meth labs
By Matthew Hathaway
Of the Post-Dispatch
Drug investigators in southwest Missouri said Thursday that they had cracked an elaborate crime ring devised to divert bulk quantities of over-the-counter cold pills to illegal methamphetamine labs.
On Wednesday, authorities in Springfield, Mo., unsealed federal drug, weapons and money-laundering indictments against 38 suspects, including at least nine store owners and two wholesale distributors. Authorities allege the targets of these indictments were involved in the illegal sale of cold pills.
Nick Console, an agent with the federal Drug Enforcement Administration in Springfield, called the indictments "the first of their kind in the nation" and said the operation will provide a road map for drug investigators elsewhere.
The case highlights the growing, illegal diversion of pseudoephedrine, the active ingredient in more than 80 over-the-counter cold remedies and an essential ingredient in most of the recipes for meth, a powerful and highly addictive stimulant that has soared in popularity in recent years.
Missouri leads the nation in raids on meth labs and meth-related dumpsites. Recently, the St. Louis area has been a hot spot for meth production.
In Missouri, it's illegal for retailers to sell more than two boxes of the pills to an individual, and Illinois Attorney General Lisa Madigan proposed similar legislation this week. On Monday, Oklahoma Gov. Brad Henry is scheduled to sign the nation's toughest restrictions on pseudoephedrine. The legislation would label most pseudoephedrine cold pills "scheduled" narcotics, sold only at pharmacies and only if customers agree to have their purchases - and their identities - recorded in a statewide database.
The federal indictments - as well as several state charges expected to be filed soon - are the product of a two-year investigation called Operation Ice Palace. The investigation takes its name from a street term for meth, which also is called ice, glass, crystal and crank.
Authorities said the operation exposed dozens of retailers who were knowingly selling enough pseudoephedrine to make hundreds of thousands of meth doses. Those indicted included:
Roy James Hudspeth, 39, vice president and chief executive officer of Handi-Rak Service Inc., who police say made at least $287,000 supplying dozens of retailers with massive quantities of cold pills that were then sold directly to meth cooks.
David Deputy, 51, the owner of a drug paraphernalia shop and body-piercing parlor in Taney County, who police say made more than $900,000 after he started a company dedicated to selling bulk quantities of pseudoephedrine to meth cooks and crooked retailers.
Owners of nine liquor stores, convenience stores and other shops that sold - in some cases - thousands of cold pills to police who had posed as meth cooks.
Fourteen store clerks and nine others who worked for Hudspeth and Deputy.
Todd P. Graves, U.S. attorney for the Western District of Missouri, said the indictments "send a message to all business owners" that his office will prosecute suppliers of meth ingredients as aggressively as meth cooks themselves.
"The legitimate sales of over-the-counter products can't be used as a smokescreen for an illicit black market," Graves said.
Operation Ice Palace revolves around two companies that allegedly supplied large quantities of undocumented pseudoephedrine to a network of dozens of retailers frequented by meth cooks.
Although the DEA tracks legal distribution of the cold pills from manufacturers to retailers, investigators say the two companies got around that federal oversight by keeping separate books and - when pressed by authorities to account for discrepancies - claiming that illegally diverted pills actually were stolen from warehouses or were never received from manufacturers.
Police say they began to suspect the distributors - Handi-Rak, based in Brookline, Mo., and D&D Distributing, of Forsyth, Mo. - after tracking the purchases of some off-brand pseudoephedrine that kept turning up in raids on meth labs.
When suspects told police where they bought the pills, undercover officers visited the stores posing as meth cooks. According to police, most of the stores sold the officers whatever they wanted - even multiple cases containing several thousand cold pills.
For decades, Handi-Rak has supplied motels, convenience stores and other businesses with novelty products, over-the-counter medications and personal hygiene supplies. When the company started, the products were sold on consignment and stored on a single rack, which gave the business its name.
According to police, Hudspeth - the son of the Handi-Rak founder - realized that in southwest Missouri, pseudoephedrine was a hot commodity.
Hudspeth was indicted on charges of conspiracy to distribute pseudoephedrine and three counts of money laundering. Police say he aggressively marketed the cold pills to shops that were popular with meth cooks, and eventually agreed to sell cold pills off the books so retailers could sell large quantities of pills at a premium without drawing any suspicion from police and federal regulators.
When reached by telephone Thursday, Hudspeth said he was aware the company was being investigated, but he denied any wrongdoing. He said he didn't know he was indicted.
According to investigators, Deputy ran an unusual shop called The Castle. Police said the building featured medieval-style ramparts and was surrounded by a moat. An investigator said as many as 20 meth cooks would line up outside The Castle every Thursday to buy cold pills.
State and federal authorities said cold pills sold in bulk on the "gray market" for as much as four times the retail price - a premium meth cooks would pay because it allowed them to spend less time finding ingredients and more time making drugs, police said.
Capt. Tom Jackson, commander of the St. Louis County drug task force, said that drug investigators in this area have a good relationship with most stores that sell the cold pills but that some smaller, independent shops will "buy as much pseudoephedrine as they can and sell to whoever they can for as much as they can."
Reporter Matthew Hathaway
E-mail:
[email protected]
Phone: 636-500-4108
