MS official pleads guilty, admits buying kilo of drugs for CBD and kratom sales in MS, NC

Biloxi Councilman Robert Leon Deming III pleaded guilty to a federal drug charge Wednesday for selling products containing synthetic cannabinoids at his CBD and kratom stores in Mississippi and North Carolina.

Deming arrived at the federal courthouse in Gulfport early, and soon, over 20 supporters, including family and friends, followed him into the courtroom for his plea hearing.

Deming stood before U.S. District Judge Taylor McNeel and pleaded guilty to one count of conspiracy to distribute a controlled substance at his nine Candy Shop stores.

In his plea, he specifically admitted to selling products containing synthetic cannabinoids at his store on U.S. 90in Ocean Springs.

Had the case gone to trial, Assistant U. S. Attorney Jonathan Butler said prosecutors would have been able to show that Deming knew, or should have known, that synthetic cannabinoids had been added to some of the vape products sold at his stores.

In addition, Buckner said, investigators found that Deming personally paid $2,200 for a kilo of the synthetic cannabinoids added to some of his vape products.

Deming opened his CBD and kratom stores in Mississippi and North Carolina in 2019, the prosecutor said. Federal and state drug agents launched a year later, in 2020, because of reports of customers getting sick after using drug-infused vape products.

Authorities later obtained products sold at the stores and subsequent testing showed some of the products contained the Schedule I controlled substances.

During the two years that followed the launch of the criminal investigation, Buckner said, investigators determined that Deming had personally purchased some of the drugs that were used as additives in the products.

The sale of such products, the prosecutor said, brought in as much as $2 million from the stores.

Though the federal charge Deming pleaded guilty to carries a maximum sentence of up to 20 years, prosecutors agreed to recommend a sentence ranging from 5 to 7 1/2 years in prison.

Judge McNeel pointed out that he was not bound to follow the recommendation.

In exchange for his plea, prosecutors dismissed two additional charges, one for drug conspiracy and another for the destruction, alteration or falsification of records in a federal investigation.

“A public official’s side job should not be running a business that distributes millions of dollars in illegal controlled substances and endangers the health and safety of its customers,” said U.S. Attorney Todd Gee. “We appreciate the hard work of investigators with the DEA, FDA, and MBN to put a stop to the distribution of these dangerous vape additives.”

A deferred sentencing

After entering the plea, Judge McNeel deferred sentencing until Aug. 13 pending a pre-sentence investigative report.

Deming’s attorney then asked the judge to consider allowing Deming to remain free under house arrest pending his sentencing and assignment to a federal prison.

The judge agreed to do so because Deming, a longtime lawyer, needed more time to close out the cases of about 40 clients he had been representing before his guilty plea.

In addition, Deming is working to resolve any tax obligations before he is sent away to prison.

Deming told the Sun Herald, before and after court, that he was going to hold off on any comments, but would address the matter at a later date.

Because Deming is now a convicted felon, he is not eligible to serve in public office, though it’s unclear when he plans to resign from the City Council.

The investigation

After agents with the Drug Enforcement Administration clamped down on their criminal investigation into The Candy Shop and its owners, identified as Deming and Damion Fletcher, and employees, suppliers, and alleged co-conspirators, they soon confirmed the drug sales at the CBD and kratom stores.

Because authorities knew customers were getting sick from some of the products sold at the stores, they did a financial records check and learned that Deming’s stores were bringing in significantly larger profits from sales at the nine Candy Shop stores compared to businesses that sold similar products.

In addition, the investigators found it suspect that Deming had made high-end purchases with cash, like $500,000 he paid for a Biloxi home and other cash he spent on fancy cars.

Eight months after the January 2023 raids, authorities arrested Deming in a traffic stop in Biloxi.

Shuffling money around and co-mingling funds

After he got out of jail, Deming closed his personal bank accounts and his attorney trust account.

Five days later, Deming opened new accounts at other banks and shuffled the money around. Federal investigators said the money had been co-mingled with proceeds from the illicit drug sales.

Seizing over cash and property

In the days ahead of the plea hearing, federal authorities outlined their plans to seize over $2 million in cash, and more, from Deming.

The forfeitures include over $1.8 million in cash seized for Deming’s Biloxi home, one personal vehicle and a 2000 Ford-350 “Monster” truck that was used for store promotions.

The federal investigators found the money and other items during the January 2023 simultaneous raids of his stores in two states and home.

In addition, federal authorities provided specifics about the other cash and property up for seizure, as listed below:

• $73,328.24 in cash from the Candy Shop store in Ocean Springs.

• $21,597 in cash from a Wells Fargo bank account in the name of Robert L. Deming.

• $56,214 in cash from a Wells Fargo bank account in the name of Robert Deming Attorneys at Law.

• $26,667 in cash from a Woodforest National bank account in the name of DK Marine LLC, a business for which Deming is listed as the registered agent and owner.

The DEA, MBN and the officers with U.S. Food and Drug Administration Office investigated the case.

Buckner and Assistant U.S. Attorney Lee Smith prosecuted the case.