Two brothers from Laclede County pleaded guilty to mail fraud and money laundering charges in federal court. The scheme involved more than $1.2 million of synthetic marijuana, commonly referred to as K2, from a store in Lebanon.
Eric Reynolds, 32, of Lebanon pleaded guilty this week to conspiracy to commit mail fraud and conspiracy to commit money laundering. His brother, Stephen Reynolds, 35, of Eldridge, pleaded guilty in August to his role in the mail fraud conspiracy and to one count of money laundering.
Stephen Reynolds is the owner of Lucky’s Novelties in Lebanon, which distributed K2. Eric Reynolds is employed at Lucky’s Novelties.
By pleading guilty, Eric and Stephen Reynolds admitted they participated in a conspiracy to commit mail fraud from March 1, 2011, to Dec. 11, 2012. They defrauded the Food and Drug Administration and the public by using mail deliveries in a conspiracy to distribute several products that were labeled as “incense” or “potpourri” and “not for human consumption,” when in reality these substances were synthetic marijuana intended for human consumption as a drug.
Between Sept. 15, 2011, and July 25, 2012, Eric and Stephen Reynolds deposited $1,245,761 in proceeds from the distribution of K2 into bank accounts and a safety deposit box. Based upon DEA undercover purchases, they charged approximately $1 for every 300 mg of K2. Therefore, they distributed approximately 373 kilograms of K2.
Eric and Stephen Reynolds must forfeit to the government $1,167,990, which they obtained in proceeds from the distribution of K2, real estate in Eldridge, funds in bank accounts, approximately $128,000 that was seized from Stephen Reynolds’ residence and a safe deposit box, a 2012 Jeep Grand Cherokee, a 2007 Ducati 1098 motorcycle, three pistols, two rifles and a shotgun.