Men charged with organized crime violations in ‘spice’ cigarette scheme

DENVER – Two Jefferson County men and their respective businesses face racketeering and other charges for selling herbal cigarettes laced with “spice,” seemingly unbeknownst to their customers.

A First Judicial District grand jury indicted Michael Jamal Whitney, 35, John Palmer Swanson, 33, and their respective businesses last week on 169 counts that include violations of the Colorado Organized Crime Control Act, the sale of synthetic cannabinoids and money laundering, in addition to the racketeering charges.

Both men were arrested Aug. 25.

The indictment alleges the two men used their businesses to manufacture herbal cigarettes called “Next Best Thing” that were sprayed with the cannabinoids, which were not listed in the cigarettes’ ingredients.

The Whitney-owned Integral Industries, LLC was the primary manufacturer of the cigarettes, and Swanson’s company, WUTB Distributing, LLC, served as the distributor.

National smoke shop chain Smoker Friendly was the primary seller of the cigarettes, and according to the indictment paid $6.2 million to WUTB between April and October 2015. It says a “significant portion” of that money was spent primarily on the “spice”-laced cigarettes.

Swanson’s company paid Integral $2.5 million for the cigarettes in that period, and Integral sold another $737,000 of the product in what the district attorney determined was a racket.

“This is an unusual situation to find illegal drugs following a legitimate, traditional retail supply route to consumers,” said First Judicial District Attorney Pete Weir in a statement.

Whitney and Swanson are being held at the Jefferson County jail on $1 million bonds. They are set to be arraigned Oct. 21.