Nederland family indicted and arrested for drug trafficking

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On Wednesday of last week the U.S. Attorney for the Eastern District of Texas, Stephen J. Cox announced that eight persons were arrested at a Nederland fireworks stand on federal drug trafficking and money laundering charges. According to Davilyn Walston, Public Affairs Officer for the Office of the U.S. Attorney for the Eastern District of Texas, the eight arrested individuals were arrested pursuant to a federal grand jury indictment handed down on June 3, 2020 for 24 counts of alleged drug crimes and money laundering crimes.

Ms. Walston listed the criminal suspects as follows; Kip William Daughtry, age 46, of Vidor, TX; Joseph Ellis Daughtry, age 64, of Nederland, TX; Sandra Miller Daughtry, age 72, of Nederland, TX; Jake Ellis Daughtry, age 34, of Nederland, TX; Jordan Lee King, age 31, of Nederland, TX; Tanner John Jorgensen, age 28, of Nederland, TX; Austin Wayne Dial, 28, of Nederland, TX and Jesse Lee Hackett, age 37, of The Woodlands, TX.

Walston said that the indictments charge the defendants with conspiracy to possess with intent to distribute, and distribution of a controlled substance analogue, resulting in death; conspiracy to possess with intent to distribute, and distribution of, a date rape drug over the internet to an unauthorized purchaser; maintaining a drug-involved premises; possession with intent to distribute, and distribution of, a controlled substance analogue; and money laundering.

The eight suspects were arrested by a joint law enforcement task force in a raid on Wednesday, July 15, 2020 and were scheduled to make initial appearances in federal court on Wednesday afternoon, July 15, 2020, and on Thursday, July 16, 2020. A ninth defendant is already in custody.

According to Ms. Walston, these suspects are alleged to be part of a chemical trafficking organization or “CTO Cell” operating on a national scale.

Walston indicated that criminal investigation into this “CTO Cell” began in 2018 when the DEA (Drug Enforcement Agency) - West Palm Beach, Florida - intercepted mail parcels of a chemical identified as 1,4 butanediol, commonly referred to as “BDO.” BDO is a chemical manufactured only for industrial or laboratory use as a floor stripper or vehicle wheel cleaner and is not intended for human consumption. Investigators determined that when BDO is ingested, it immediately metabolizes into GHB (a known date-rape drug) with the same effects, causing potential overdoses, addiction, and possible death.

The DEA traced the seized parcels to their origination point, Right Price Chemicals, a business located on Twin City Highway in Nederland, Texas, and owned by Jake Daughtry, Joe Daughtry and Sandra Daughtry. Also located at Right Price Chemicals is a seasonal fireworks business called “Jake’s Fireworks.” Agents determined that since 2016, Right Price Chemicals has distributed approximately 7,000 gallons of BDO over thousands of orders, and that those sales generated $4.5 million.

Walston went on to say that investigating Agents additionally determined that “Jake’s Fireworks” operated as a front for Right Price Chemicals, allowing individuals to purchase BDO on a walk-in basis. Customers could also obtain BDO from “Jake’s Fireworks” through Internet orders, and have the chemical shipped to their homes. Right Price Chemicals also distributed bulk quantities BDO to mid-level dealers, who, in turn, sold or distributed the chemical to users. Investigators determined that at least two deaths—one in Virginia and one in Florida—were directly caused by BDO sold by Right Price Chemicals. Right Price Chemicals distributed BDO in 48 states across the country.

Investigators have also determined that the proceeds from the distribution and sale of BDO, which total over $1 million, have been laundered through several bank and retirement accounts throughout Southeast Texas. Those accounts have now been seized.

Ms. Walston said that, if convicted of the criminal charges, the defendants face a minimum term of 20 years, and up to life, in federal prison.

In addition to pursuing criminal charges, on July 13, 2020, the Eastern District sought and obtained a temporary restraining order against Jake’s Fireworks and any other businesses housed within the Twin City Highway location in Nederland. This civil injunctive relief immediately shuts down operations of the business and any further distribution of BDO and other chemicals. Jake Daughtry, Joe Daughtry, Sandra Daughtry, and Kip Daughtry also face civil penalties under the Controlled Substance Act.

“I am proud of our team’s investigation and interdiction of this dangerous chemical trafficking organization,” said U.S. Attorney Steve Cox. “The joint efforts of our Criminal and Civil Divisions led to the arrest of suspected drug traffickers, the seizure of bank accounts, and the shutdown of a suspected drug front, making the Eastern District of Texas a safer place for all.”

“The DEA Miami and Houston Field Divisions combined forces to target and neutralize a Chemical Trafficking Organization that was responsible for the nationwide distribution of a chemical product, that when consumed, is immediately metabolized into GHB. This chemical, often used by sexual predators as a date-rape drug, can cause overdose, addiction and death,” stated DEA Special Agent in Charge Steven S. Whipple. “This investigation highlights DEA’s commitment to the protection of our communities by working alongside our state, federal and local law enforcement partners to identify the most significant threats to the public safety.”

Ms. Walston also added the following information about the investigation into these alleged crimes:

“This is an Organized Crime Drug Enforcement Task Force (OCDETF) case and is being investigated by the Drug Enforcement Administration West Palm Beach, Florida, and Beaumont; United States Postal Service; Internal Revenue Service-Criminal Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Jefferson County Sheriff’s Office. Essential support and coordination was provided by numerous components of DEA headquarters and the Department of Justice’s multi-agency Special Operations Division (SOD), including assigned attorneys from the Narcotic and Dangerous Drug Section (NDDS). This case is being prosecuted by Assistant U.S. Attorneys Michelle S. Englade and Robert Wells.”

Ms. Walston reminds our readers that an indictment, even a federal indictment, is not evidence of guilt. All defendants are presumed to be innocent until proven guilty beyond a reasonable doubt in a court of law.