Guilty verdicts for 3 involved in Duluth synthetic drugs trial

Published 9:22 am Tuesday, October 8, 2013

MINNEAPOLIS — A Minnesota head shop owner was convicted Monday of almost all counts against him in a closely watched federal case involving the sale of synthetic drugs.

Jim Carlson, who defiantly operated the Last Place on Earth shop in Duluth through multiple federal raids, was found guilty on 51 of 55 counts. The complex indictment included multiple charges of dealing in misbranded drugs as well as conspiracy counts.

The federal jury that heard the case found Carlson’s girlfriend, Lava Haugen, guilty on all four counts she faced and convicted his son, Joseph Gellerman, on two of four counts.

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The trial was seen as one of the first major tests in federal court of how effectively authorities can combat synthetic drugs, commonly labeled as “incense,” “spice” or “bath salts,” which occupy a legal gray area that’s difficult for authorities to regulate due to their constantly changing formulas.

Prosecutors contended the defendants knew they were selling recreational drugs that people would use to get high. Carlson never denied selling the products, but the defense argued that he did nothing illegal.

Carlson’s attorney, Randall Tigue, said they were disappointed by the verdicts and will ask U.S. District Judge David Doty to grant a new trial.

“Mr. Carlson was forced to go to trial with his hand tied behind his back,” Tigue said. He explained that the defense was prohibited under the judge’s rulings from telling the jury about statements from U.S. Sen. Amy Klobuchar and other officials who have said the problem with combating synthetic drugs is that they’re often legal.

Acting U.S. Attorney John Marti said prosecutors could not comment on the verdicts because of the federal government shutdown. The lead prosecutor, Assistant U.S. Attorney Surya Saxena, said they can perform only essential public safety functions.

Doty didn’t set a sentencing date but told both sides it was likely several weeks away. The various counts carry maximum potential sentences ranging from three to 20 years. Doty took under advisement Saxena’s motion for an order that Carlson forfeit $6.5 million, including about $4 million worth of cash and assets authorities already have seized.

Carlson and Haugen kissed before federal marshals took him into custody. Doty allowed Haugen and Gellerman to remain free pending sentencing. Haugen’s attorney, John Markham, had asked Doty to allow Carlson to remain free, too, saying she suffers from multiple sclerosis and he’s her main caregiver.

Carlson, 56, was charged under several federal laws including one against “analogue” drugs, defined as substances with similar chemical structures and effects to controlled substances already on the government’s official list. Makers of synthetic drugs constantly tweak their molecules to try to stay ahead of the law.

Last Place on Earth did a brisk business in synthetic marijuana and other substances before authorities shut it down in July after a long battle that included several raids and seizures of drugs, cash and guns. In public statements before trial, Carlson said he made millions of dollars, selling $16,000 worth on an average day.

Duluth officials tried to rein in Carlson’s business multiple times before finally using a novel ordinance requiring a license for selling synthetic drugs.

Rag-tag customers would line up before the store opened — even in cold or rainy weather and sometimes with kids in tow. Nearby businesses complained the head shop scared their customers away. At one point, a judge ordered Carlson to pay for stationing two police officers outside.

Prosecutors haven’t said what they’ll seek for sentences. Tigue said it’s hard to predict how much prison time Carlson might be facing.

“It depends on the quantity of drugs,” he said. “There is basically no precedent for sentencing with these kinds of drugs.”

Markham, who also plans to ask Doty for a new trial, said analogue drugs are a “very complicated area” and it’s hard to know what’s legal and what isn’t.

“I would ask the government: If a drug is illegal say something,” he said.