Four of the nine men indicted in the Curious Goods case have accepted plea bargains, but high-profile criminal defense attorney Daniel J. Stanford says it'll be a cold day in hell before he pleads guilty.
Daniel Stanford is a criminal defense lawyer, but in the eyes of the federal government, he's no different than some of the clients he represents. In other words, the feds believe he, too, is a criminal.
By Patrick Flanagan
December 2012
Daniel Stanford is a criminal defense lawyer, but in the eyes of the federal government, he's no different than some of the clients he represents. In other words, the feds believe he, too, is a criminal.
Daniel J. Stanford
At least that's how a recent federal grand jury indictment makes it seem.
That grand jury indictment was unsealed by the U.S. Attorney's Office on Oct. 2, alleging Stanford and eight others were involved in a high-stakes money laundering conspiracy to distribute and market the synthetic marijuana "Mr. Miyagi" - also known as potpourri or fake weed - through the guise of the Lafayette smoke/head shop Curious Goods.
Four of the nine alleged co-conspirators have pleaded guilty in exchange for reduced charges. Those four individuals represent what appears to be the upper echelon of a multi-state synthetic drug ring.
With the office of U.S. Attorney Stephanie Finley mostly keeping quiet, ABiz's knowledge of the case has largely come from defendant Stanford, court records, and Lance Dyer of Bremen, Ga. Dyer is involved in the federal case as a witness, and as the father of 14-year-old Dakota Dyer - so far, the only documented victim of Mr. Miyagi. Dyer has been in contact with ABiz and its sister publication, IND Monthly, for several weeks, most recently on Tuesday Nov. 13, to say he had just heard from a federal agent that defendants Joshua Espinoza and Boyd Anthony Barrow, both of Georgia, had pleaded guilty early that afternoon.
Finley's office confirmed that information in a press release issued about 24 hours later on Wednesday, Nov. 14.
Using chemicals purchased from NutraGenomics - the company owned by Drew Green and Tommy Malone, the first two defendants to plead guilty - Barrow and Espinoza, through their company, Pinnacle, manufactured and distributed Mr. Miyagi, their line of synthetic marijuana. They advertised it as a "non-consumable" type of air freshener or "Potpourri." Of the numerous businesses supplied by Barrow and Espinoza, their biggest customer was Curious Goods. In court documents, the feds say that from March 2011 to early December of that year, Pinnacle was paid about $3.3 million from the sale of Mr. Miyagi. They received about half of that amount, $1.5 million, from Curious Goods, according to the feds.
Finley's press release that evening also contained some new information regarding attorneys Stanford and Barry Domingue of Carencro, also an alleged conspirator. Domingue is the lawyer/business partner of Curious Goods owner Richard Buswell.
Stanford has been cooperating with ABiz's ongoing look into the federal conspiracy case. The most recent plea agreement, however, contains information that doesn't jibe with what Stanford has been saying about how he got pulled into this synthetic marijuana case, why he was paid hundreds of thousands of dollars by various parties involved in the case and how he came to be named one of nine alleged conspirators by the feds.
Yet, aside from determining who's telling the truth - Stanford or the defendants seeking favorable sentencing - the bigger question is whether it's a crime for a criminal lawyer's legal fees to be paid with drug proceeds.
The Stanford-Buswell Connection
Stanford says he and Buswell first crossed paths on the outside of a boxing ring in July 2011, introduced by a fighter Buswell sponsored and Stanford trained. A month later, the U.S. Attorney's Office unsealed a 28-count grand jury - not the one mentioned above - against Buswell for his role in a securities fraud scheme in which he allegedly made millions of dollars by bamboozling hundreds of local investors.
From the time of Buswell's indictment in August 2011 through late September of that year, the relationship between the two remained "peripheral," Stanford says, focused mostly on their connection with a number of local fighters (boxing and training fighters is a longtime hobby for the attorney). After several discussions about the securities fraud matter over that period, Stanford says Buswell asked for his legal services, and a contract was signed Sept. 29, 2011.
"I basically have 14 boxes of papers dumped on me, so I start trying to understand everything as fast as I can about the case," Stanford recalls. Shortly after an arraignment hearing where Buswell pleads not guilty, Stanford says holes in the federal government's case began to emerge. "I realize Buswell is being set up as a fall guy for these broker/dealers and several Lafayette investors who have very strong connections," Stanford says. "I then bring this up with the U.S. attorney because one of these dealers - Advanced Blast - is still doing it, so I ask why aren't you going after them. The prosecutor's answer: We're just interested in the local bad guy.'"
On Dec. 8, a day after Stanford attended what he calls the "notorious" meeting between Curious Goods franchise owners and employees held at Buswell's house (a meeting prosecutors reference in their indictment of Stanford et al), the feds launch an all-out raid of every Curious Goods retail store, arresting employees, and, eventually, Buswell. On Dec. 9, U.S. Magistrate Patrick Hanna sends Buswell back to jail for violating the terms of his release in the federal securities fraud case.
According to Stanford, here's where the story gets interesting.
In addition to the securities fraud charges, Buswell now faced state charges for distributing Mr. Miyagi and for filing a false public record against two witnesses in the alleged investment scheme.
Stanford says that prompted two federal DEA agents to pay Buswell a visit at the Iberia Parish Jail on April 5, claiming they were serving him with a state Civil Forfeiture document.
"Why would two federal agents need to go to Iberia Parish Jail to serve Buswell with a state document? The DEA didn't need to serve Buswell. They were trying to get him talking and to implicate me," Stanford says.
For Stanford, that discovery did not come until late June, when he received wire-taped recordings taken by the federal agents during their visit with Buswell in April, which coincided with a motion being filed by federal prosecutors to have Stanford removed from the securities fraud case, citing a conflict of interest.
Several days after obtaining the taped conversations, transcripts of which were viewed by the publication, Hanna issued a ruling disqualifying Stanford from continuing his representation of Buswell. According to the transcripts of the federal wiretapping, Buswell repeatedly told agents that Stanford is not the lawyer for Curious Goods. He says Barry Domingue, Buswell's business partner, is the attorney for Curious Goods, and that Stanford only represents him in the federal fraud case.
"By the end of the May 14 hearing, the federal prosecutors are arguing that I shouldn't be representing Richard Buswell because we are both targets of the fed's criminal investigation into Curious Goods," Stanford notes. "They claim if Richard is allowed to cooperate he will implicate me, and the judge issues a ruling that the DEA agents did nothing wrong by serving him. But not once did they tell the judge they taped their interview. But they did. They were all wired up when they went to Iberia Parish Jail. That's a violation of his 6th Amendment rights because he did not have a lawyer present."
Stanford eventually is granted a rehearing by federal Judge Richard Haik on his disqualification from being Buswell's lawyer. But the rehearing is considered moot after Stanford is listed in the federal grand jury's indictment for the Curious Goods conspiracy, unsealed Oct. 2. Now Stanford faces a slew of conspiracy charges ranging from money laundering to distribution of illegal substances, but he will not get his day in court for at least another year.
"This is corruption in the sense of a misuse of power by the U.S. Attorney's Office and the DEA," argues Stanford. "And yes, I think my representation of Richard in the securities fraud issue is the reason I was indicted in the Curious Goods case. I think the two cases are directly connected, and they're using this to open a new front in their War on Drugs."
A 6th Amendment Rights Issue?
Bill Goode, a former federal magistrate who has worked as a criminal defense attorney since 1987, says the feds' case against Stanford all boils down to how you interpret "attorney's fees" and the 6th Amendment, which entitles all defendants, whether they're guilty or not, to legal representation.
"If a drug dealer hires you as a lawyer and he pays you with money that came from drugs, the drug dealer has laundered money," says Goode. "And if you the lawyer know that money is tainted, then you also are complicit." Goode, who leases office space to Stanford, says the issue of lawyers representing drug dealers recently went before the Department of Justice.
"Based on a Department of Justice provision, money laundering doesn't apply to Daniel Stanford because you can't prosecute a lawyer for money he receives for 6th Amendment purposes," says Goode. "All the money Daniel Stanford received from Richard Buswell was for attorney's fees for the securities fraud case. The feds say Daniel was paid with checks from Curious Goods, but what's to question about getting paid from a client's business? It happens all the time. As far as the cash, Daniel has receipts proving it was never his cash. I've had clients bring me cash money so in case they get arrested I'll be able to bail them out. Possessing cash for a client is not illegal."
Goode also questions if Mr. Miyagi, the synthetic marijuana sold by Curious Goods, is even illegal. He points to an emergency ban passed by the federal government on March 1 of last year outlawing five substances used to make synthetic marijuana. Mr. Miyagi contains none of those substances, but Goode says federal prosecutors are basing their argument on the 1986 Federal Analog Act, which allows any chemical considered "substantially similar" to a controlled substance to be treated as such.
"Not once did the feds go to Curious Goods and say, Hey we got this emergency ban, and we think Mr. Miyagi may be an analog of those banned substances,'" says Goode. "They could've said, Take it off the shelves, and we'll test the product and see if there's a problem.' Curious Goods is like any other business; they use a credit card machine, they pay their property taxes, their sales taxes. It's not like you're having to go meet someone in the shadows of some parking lot to make some shady deal. But no, instead of giving these people the opportunity to know they may be doing something wrong, the feds just go bust in and arrest everyone."
Goode says the grand jury process is a one-sided affair that allows only the prosecution to present its side of the case, oftentimes presenting illegal evidence like hearsay. "If you're indicted, even if you're innocent, you're going to be in for one helluva ride."
Research Chemicals - A New Realm of Criminal Litigation
Stanford does admit to developing an interest in the so-called "research chemical industry" - responsible for the substances used in synthetic drugs - between October and November 2011, but only through a legal context, he says.
"I start learning about these new chemicals coming out, and how there's not even a study conducted to prove these chemicals are bad, but the government, instead of trying to understand, just starts trying to regulate these compounds that are being made by chemists. Before, I wasn't aware there was even this industry. And as a lawyer, I see a whole new area of criminal litigation that would be coming out of this."
Hoping to seize the opportunity, Stanford starts researching the issue, and eventually meets co-defendant Dan Francis of Georgia, the founder of a pro-synthetic cannabinoids group in California that Stanford claims is attempting to work in unison with legislators and law enforcement agencies.
On Nov. 28, Stanford opened a Louisiana version of the group, called RCA, or the Retail Compliance Association.
"The Louisiana version of RCA was incorporated but never got off the ground," says Stanford. "The idea was to work [together] with our law enforcement and legislators."
However, the newest information released by the feds in a press release announcing the Nov. 13 guilty pleas shows Stanford did receive RCA membership dues and legal fees from defendants Barrow and Espinoza. In previous interviews with ABiz, Stanford acknowledged meeting Barrow, but made no reference to their financial relationship.
During the Nov. 13 hearing, Barrow and Espinoza admitted to writing Stanford a series of checks through Pinnacle. The checks, totaling $39,171, are dated between Oct. 28 and Dec. 6, 2011. They testified in court that the checks were for legal services Stanford provided to Pinnacle and for dues to Stanford's RCA. Barrow and Espinoza admitted in court that all of the money they paid to Stanford and attorney Domingue were proceeds from the sale of Mr. Miyagi.
Here's the full list of checks Barrow and Espinoza said they wrote to Stanford:
(Oct. 28, 2011) - $12,500 check from Pinnacle to Stanford. "Retainer" written in the memo line of the check.
(Nov. 3, 2011) - $6,250 check from Pinnacle to Stanford. Memo line reads "RCA Dues."
(Nov. 21, 2011) - $13,000 check from Barrow to Stanford. Memo line reads "Legal."
(Dec. 6, 2011) - $7,421.69 cashier's check from Pinnacle to Stanford.
Yet the question raised by attorney Goode still remains: By accepting legal fees derived from the sale of Mr. Miyagi, was Stanford acting like a criminal, or a businessman?
"Being a criminal lawyer is a business. If you're not hired, you die financially," Goode says. "And for defendants, I don't care how bad the act you committed is, you're still entitled to a lawyer. It's your constitutional right."
Stanford maintains his involvement was in a legal capacity. "They're saying that by giving advice as a lawyer, I'm in violation of the law and assisting in some type of conspiracy," says Stanford. "Their indictment against me and the others smacks of intimidation. The case is not fact-based; it's based on belief and shoddy investigation techniques."
According to court documents, both Barrow and Espinoza acknowledged that the packaging of Mr. Miyagi was "designed and placed on the product to be intentionally misleading as to both what was in the product and what the product's intended use was knowing full well that it would be ingested by humans."
And though the indictment alleges Stanford aided in the packaging process, he vehemently denies the claim.
"I never once had anything to do with the packaging of Mr. Miyagi," he says. "I've never even handled a Mr. Miyagi package. Plus, I didn't meet [Curious Goods owner] Richard until July, and the packaging never changed between March and December, so what impact could I have even had on how they packaged it?"
The feds have moved to seize more than $20 million in cash the defendants received either directly or indirectly from the drug trafficking ring, a 2006 Mercedes Benz X65 sedan, a 2005 Baja Outlaw speed boat, a 2002 Pontiac Firebird (the owners were not listed), and Stanford's home at 120 Branton Drive in Lafayette. According to the tax assessor's office, the home is valued at $572,000.
Stanford says he is innocent and has no plans of taking a plea deal in exchange for reduced charges.
The War's First Casualty: Dakota Dyer
Dakota Dyer was 14 years old when he smoked Mr. Miyagi for the first time on March 10, 2012. According to records, within two hours, Dyer found a pistol and took his own life, making him, as far as this paper could determine, Mr. Miyagi's first documented victim.
Haralson Country Coroner Daniel Hutcheson tells ABiz he remembers investigating Dakota's death, which he says is the first and only case of its kind in the rural Georgia community. Dakota's official cause of death is listed as "self-inflicted," Hutcheson says. "The official cause of death does not mention synthetic marijuana," the coroner says. "But based on the evidence collected from my investigation, my report does mention the role synthetic marijuana played in Dakota's death." Hutcheson's report names Mr. Miyagi specifically as the chemical responsible for inciting the "psychotic" episode experienced by Dakota Dyer right before his suicide.
Dakota's father, Lance Dyer, is coming to Lafayette in July to testify against the remaining five defendants.
"I've come from the dark side, and I hope these narco-terrorists and merchants of death realize they're staring down the barrel of federal time," Dyer says.
For Dyer, lawyers Stanford and Domingue are just as guilty as the manufacturers and distributors of synthetic marijuana. The lawyers, Dyer argues, are essentially instructing these "so-called businessmen" on how to break the law. "Those lawyers are just as bad as the drug dealers," says Dyer.
The next year for Dyer will be busy compiling a database for the victims of research chemicals, a project he is spearheading through the Dakota Dyer Foundation.
"Our organization is in the process of compiling all the names, ages, locations, what products they used and what mental or physical repercussions came of it," says Dyer. "Us, and eight similar organizations throughout the country are sending out blanket contact to the parents of victims. The information we're looking for, we'll get it."