By Andrew Knittle, The Oklahoman
WOODWARD, Okla. —
A warrant has been issued for a Woodward couple authorities say made more than $1 million selling synthetic marijuana at their novelty shop, and their attorney said the two are on the run.
Adam and Tracy Daniels are accused in a 33-count indictment of money laundering and selling synthetic marijuana from Sugar Lips, their shop in downtown Woodward. The indictment claims the couple were selling the products for at least two years.
The Internal Revenue Service on April 5 filed a property seizure warrant, and an arrest warrant also is on file for the two, authorities said.
According to court records, the couple were buying synthetic marijuana from suppliers in Louisiana, Arizona and North Carolina.
“Tracy Daniels would provide samples ... to friends to smoke to see if it was ‘good,’ meaning it made them high,” the indictment states. “If the product was ‘good,’ it was sold at Sugar Lips.”
Chelsea Cook, 29, also was indicted with the couple. An attorney representing Adam and Tracy Daniels described Cook as “a stepdaughter.”
Court records show Cook and the couple share the same address in Woodward. Cook is accused of selling several packs of the synthetic marijuana in May 2012 during a controlled purchase made by investigators.
‘Large amounts of money’
According to the indictment, the couple made a substantial fortune selling products with names such as “No More Mister Nice Guy” and “Rack City.”
Bank records reviewed by investigators show the couple deposited $374,884 into a bank account from February 2010 to December 2011.
In another bank account, which was open between March 2011 and July, the couple deposited $724,813, mostly in cash, the records show.
“This analysis showed large amounts of money going from this bank account to different companies and individuals to purchase inventory for Sugar Lips,” an IRS investigator wrote in a seizure warrant.
Authorities seized nearly $40,000 in cash when Sugar Lips was raided in July.
The federal government also is in the process of seizing a boat, trailer and real estate purchased by the couple for about $90,000.
Sold as incense
A former Sugar Lips employee, Debbie Ingersoll, told a Drug Enforcement Administration agent working the case the store was well-known for selling synthetic marijuana, which is marketed and sold as incense or potpourri.
“Ingersoll stated people came from all over to buy the herbal incense and that some came from Texas and Kansas,” the DEA agent reported after an interview with Ingersoll in August.
“Ingersoll was asked about the herbal incense products sold at Sugar Lips and stated, ‘It’s bad stuff ... I did not like what it was doing to people.’ “
According to court records, many of the products purchased at Sugar Lips by undercover agents contained XLR-11, a chemical compound that will be added to Oklahoma’s controlled substance list in November.
XLR-11 is listed as the “synthetic cannabinoid identified from clinical specimens” of several patients who were hospitalized with kidney failure in 2012, according to the Centers for Disease Control and Prevention.
Oklahoma City attorney Lance Phillips, who is representing the couple, confirmed the two are on the run.
“I haven’t heard from them in a while,” Phillips said. “I don’t know where they are.”
Phillips said the couple initially turned themselves in to authorities, but they since have disappeared.
Like others arrested on selling synthetic marijuana complaints in Oklahoma in recent years, Adam and Tracy Daniels are claiming they didn’t do anything wrong — at least not intentionally.
“They honestly believed they were selling a legal product,” Phillips said. “That’s the whole defense.”