Under federal statutes, Schrage could be subject to a sentence of 28 years in federal prison without parole, plus a fine up to $1 million. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Schrage was the owner of an underground lab in Missouri that imported raw steroid powder from China and manufactured steroids for distribution on the Internet and elsewhere under the label Powerline Laboratories (PL); Powerline was purportedly a Mexican veterinarian pharmaceutical company complete with Spanish text on the labels. Powerline advertised various oral and injectable anabolic steroid products such as PL Oxandrozolic and PL PowerTest 400 on website at ‘powerlinemex.com’ and ‘powerline.com.mx’. Maverick also owned various bodybuilding websites such as ‘renegademuscle.com’ and ‘meatheadz.com’ and had many connections in the world of bodybuilding.
Schrage aka Maverick aka Powerline Labs was busted on September 1, 2007. It was on this date that he was caught speeding in his 2002 Cadillac Escalade returning to Nixa from Florida. He was taken into custody by the Missouri Highway Patrol on an outstanding warrant for his arrest. After Trooper Mandy Kahler arrested Schrage, she discovered approximately 1,000 vials of Powerline branded injectable anabolic steroids and approximately 5 pounds of raw steroid powders (”Man from Nixa pleads guilty to steriod smuggling and sales,” July 18).
By pleading guilty today, Schrage admitted he participated in a conspiracy to import steroids from China between Nov. 1, 2004, and Sept. 20, 2007. Schrage placed numerous orders via e-mail for steroids in raw form, using fictitious names to send wire transfers to his Chinese suppliers. He then manufactured the raw form into steroids that he sold over the Internet and shipped to customers throughout the U.S.
Schrage also admitted that he dispensed misbranded prescription drugs (steroids) without the prescription of a licensed practitioner. On June 15, 2007, an undercover law enforcement officer purchased steroids from a steroid broker in Arizona that were shipped by Schrage from Springfield. The steroids were labeled in Spanish in violation of federal requirements that all prescription medication be labeled in English. No instructions for use were located on the labels of the product. Schrage dispensed the steroids to the steroid broker without determining that the customer had a valid physician’s prescription for the prescription drug. Schrage also pleaded guilty to a money-laundering conspiracy. He admitted that he conducted financial transactions that involved the proceeds of criminal activity with the intent to promote the unlawful distribution of steroids.
Mikal Schrage will receive his sentence once the United States Probation Office concludes their presentencing investigation.
China announced the revocation of the GeneScience Pharmaceutical license to manufacturer Jintropin brand human growth hormone. This represents a major success in efforts towards the internationalization of steroid and doping law by the United States. The U.S. federal government indicted CEO Lei Jin and GeneScience Pharmaceutical Inc. last fall as part of Operation Raw Deal (”China Cracks Down on Drug Companies,” June 19).
One of the drugmakers that China named Wednesday was GeneScience Pharmaceutical, which is based in northern China and run by an American-educated executive. Last September, a federal grand jury in Rhode Island indicted the company for illegally distributing millions of dollars in human growth hormones in the United States. The company had denied the allegation, but its American agent pleaded guilty in February to conspiracy to distribute H.G.H.
Anthony Roberts posted an entry in his blog about ongoing investigations resulting from Operation Raw Deal. I spoke with him on the phone and he informed me that federal agents with the FDA Office of Criminal Investigations and the Postal Inspection Service have recently made several informal “knock and talk” visits with customers (end users) who purchased steroids domestically from remailers. It appears that the feds are not targeting end steroid users (which is consistent with our sources involved in other investigations resulting from Operation Raw Deal.
Keep in mind that while Operation Raw Deal in large part crippled the steroid underground lab industry, authorities did not arrest a handful of large steroid remailers with connections to indicted UGLs. As there are still ongoing investigations, it is too soon to assume these remailers have escaped prosecution; there is the likely possibility that the feds are still building cases against them. Not everyone indicted as part of Operation Raw Deal has been sentenced leaving open the possibility that several are cooperating defendents in related cases.
Anthony Roberts tells me to expect a new series of Operation Raw Deal related steroid busts in the coming weeks. Otherwise, these remailers will likely become DEA confidential sources and informants in future federal steroid crack-downs in coming years.
Jeff Beaty aka “The Priest” pleaded guilty on Friday, February 15, 2008 to the charge of conspiracy to distribute and possess with intent to distribute anabolic steroids. Beaty was arrested and indicted as part of Operation Raw Deal.
Newspapers have identified Jeff Beaty of Nashville, Tennessee as an MMA fighter. He trained at Nashville MMA. His MySpace page has been inactive since last fall.
Assistant U.S. attorney Brian McEvoy described the “significant assistance” provided by Beaty to the Florida Times-Union with use of his internet handles:
He allowed [federal] agents to use his online identity and identified cellular telephone numbers that led to [several] convictions.
The plea agreement details Beaty’s cooperation as follows:
The defendant agrees to cooperate fully and testify truthfully against any and all persons as to whom the defendant may have knowledge whenever called upon to do so with regard to the facts underlying the information in this case, as well as the government’s continuing investigation into the circumstances underlying the information. The defendant understands that this agreement does not require the defendant to “make the case” against any particular person or persons. Rather it requires the defeant to be truthful and to testify truthfully whenever called upon. The defendant agrees to fully and truthfully respond to all questions asked by law enforcement officers. Defendant agrees to a polygraph examination if deemed necessary by the government to verify the truthfulness of information the defendant is supplying pursuant to the cooperation provision of this plea agreement.
Beaty faced up to 5 years imprisonment and up to $250,000 fine. As part of his plea agreement, prosecutors recommended probation. The court granted the “motion for downward departure” on Friday. Beaty was sentenced to 5 years probation:
Sentence: 5 Years Probation with standard conditions of probation. urine testing, prohibition against possession of any firearm or other dangerous weapon and against the violation of any law. DNA sample as directed by the USPO. deft shall participate in a program of testing for drug and alcohol abuse and if necessary, participate in program for treatment. 150 hrs of community service during the first 18 months of probation. Deft shall submit his person, residence, office, or vehicle to a search conducted by a USPO at a reasonable time and in a reasonable manner. Court accepts the plea agreement.
Real journalists are supposed to rely on verifiable facts when writing news stories. Michael Brick of the New York Times appears to be guilty of sloppy fact-checking in his coverage of the federal steroid investigations down in Texas.
A black Hummer pulled into the Hooters parking lot as dusk fell. Arthur Dale Atwood, a professional bodybuilder with a 61-inch chest, opened the tailgate for a police informant to deliver more than 100 bottles of fake drugs made from vegetable oil.
The story implies that Art Atwood was selling and dealing “fake” steroids. Court documents which provide details of the sting operation indicate that federal investigators gave the police informant fake steroids in place of real steroids as part of the Atwood sting operation. “Fake” steroids are often used in sting operations to establish conspiracy and possession with intent to distribute.
Furthermore, the police informant involved in the federal steroid sting operation was Art Atwood’s best friend; Atwood had no reason to suspect he was being sold fake steroids. His best friend had been acquiring steroids from David Jacobs who was distributing legitimate steroids imported from China according to independent sources.
Prosecutors could have tried Atwood and Jacobs on multiple counts of drug conspiracy, seeking to make an example of two bodybuilders suspected of distributing steroids. But instead, they made deals that could keep both men from serving any prison time.
Art has informed MESO-Rx that he had not entered into a plea agreement with federal investigators and the New York Times assertion of such a deal was categorically false. Atwood has not been charged with a crime and it remains to be seen if charges are filed against him for his involvement.
Atwood and Jacobs were enlisted to cooperate in Operation Raw Deal, the federal government’s most aggressive drive yet to interrupt the importation and traffic of performance-enhancing drugs through nutrition stores, gyms and Web sites. In September, authorities in 10 countries coordinated the arrests of more than 120 people, seized more than $6 million and collected 11 million steroid doses, 3 boats and dozens of weapons.
While the Texas investigation is a complex and interconnected case, Atwood explains that his involvement in the case is different from Jacobs; Atwood does not have the same connections e.g. with NFL football players, nor does he have a plea agreement with prosecutors assuring him that he will avoid jail time. The facts involving Atwood’s case are significantly different and will be judged independently, contrary to suggestions by the New York Times of similarities between the Atwood and Jacobs cases. As he told the local CBS affiliate, “David did his own thing; I was my own entity.”
Through the summer, six other people connected to Atwood and Jacobs were arrested and charged with conspiracy to distribute steroids. Most have pleaded guilty to the federal distribution charge. In interviews, investigators and defense lawyers described the six as bodybuilders who were supplied by Atwood and Jacobs and who were familiar with one another partly through competitions and mostly through online sales.
The New York Times implies that six bodybuilders were arrested as the result of Art Atwood’s cooperation with federal investigators. Atwood strongly denies the truth of this allegation; the implication that they were “turning people in left and right” is untrue. Furthermore, none of the six indicted co-conspirators of David Jacobs have accused Atwood as being responsible for their arrests.
While the parties affected by the federal steroid investigation in Texas are restricted by what they can say to the press by legal considerations, the full truth and details of this large scale investigation will become a matter of public record soon - most likely upon sentencing of the parties involved. MESO-Rx tries to provide additional information as it becomes available but the details are incomplete and we should be cautious before we rush to judgment in the absence of all of the facts.
Another internet-based anabolic steroid source arrested in Opeartion Raw Deal in the fall of 2007 has pleaded guilty. Robert Cashmon of New Hampshire pleaded guilty to six counts including “possession of anabolic steroids with intent to distribute,” “conspiracy to distribute anabolic steroids,” “receipt in interstate commerce of misbranded drugs” and “laundering of monetary instruments.” Specific steroids sold by Cashmon as cited in the indictment include oxymetholone, methandrostenolone and misbranded stanozolol (misbranded as CP Winstrol).
Cashmon is scheduled for sentencing on April 28, 2008.
