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Owner, employee of Jake's Fireworks face 20-year sentence after pleading guilty to drug trafficking violations

Court documents say Jake Daughtry and Kip Daughtry are the leaders of a Chemical Trafficking Organization cell operating on a national scale.

NEDERLAND, Texas — The owner and an employee of Jake’s Fireworks in Nederland pled guilty to federal drug trafficking violations in the Eastern District of Texas.

Jake Ellis Daughtry, 35, of Nederland, pleaded guilty to "conspiracy to possess with intent to distribute a date rape drug over the internet to an unauthorized purchaser." Kip William Daughtry, 48, of Vidor, pleaded guilty to "possession with intent to distribute a controlled substance analogue."

The defendants were indicted by a federal grand jury on June 3, 2020, and face up to 20 years in federal prison.

Court documents say Jake Daughtry and Kip Daughtry are the leaders of a Chemical Trafficking Organization cell operating on a national scale.

RELATED: Eight face federal charges as 'head' of chemical trafficking organization following on Nederland fireworks retailer

An investigation into the organization began in 2018 when federal agents with the United States Drug Enforcement Administration in West Palm Beach, Florida intercepted mail parcels of a chemical identified as 1,4 butanediol, commonly referred to as BDO.

The federal government alleges the Nederland business acted as a front for Right Price Chemicals.

The DEA traced the seized parcels to their origination point, which was Right Price Chemicals. Agents confirmed Right Price Chemicals is a business located on Twin City Highway in Nederland, and it's owned by Jake Daughtry. The seasonal fireworks business called Jake’s Fireworks is also operated at that location.

“After being notified by Florida law enforcement that this dangerous and lethal chemical was being sold to users for a nefarious purpose, East Texas law enforcement agencies took action to protect the public and prevent others from falling prey to the sale and use of this dangerous substance,” said U.S. Attorney Brit Featherston.

RELATED: Jake's Fireworks attorneys allege government altered emails to support guilt in chemical trafficking case

Prosecutors said the Daughtry’s continued to sell BDO even after becoming aware that some customers were ingesting the substance for its narcotic effect rather than using it for its intended commercial purpose. 

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. When BDO is ingested, investigators said it immediately metabolizes into a known date-rape drug, GHB. It can cause potential overdoses, addiction, and death, according to a Tuesday news release from U.S. Attorney Brit Featherston.

An investigation showed that since 2016, Right Price Chemicals has distributed approximately 7,000 gallons of BDO through thousands of orders across the nation. Those sales generated $4.5 million, the release says.

RELATED: Judge prohibits Nederland fireworks company from resuming business following July raid

Eight people were arrested on federal drug trafficking and money laundering charges following the raid on Jake's Fireworks retailer on July 15, 2020.

The U.S. Attorney's Office in the Eastern District of Texas obtained a temporary restraining order under the Controlled Substances Act on July 13, 2020, on the grounds that Jake’s Fireworks was a drug-involved premise, according to U.S. Attorney Stephen Cox.

In order to grant the injunction, Judge Michael Truncale said in a file 12News story that the evidence must show the following:

  • Right Price Chemicals ordered and shipped BDO out of the Jake’s Fireworks premises.
  • BDO was stored in and around the Jake’s Fireworks premises.
  • Right Price Chemicals’ business offices and operations were situated within the Jake’s Fireworks building.
  • Employees of Right Price Chemicals, including Jake Daughtry, knew that BDO was a “controlled substance analogue” and that customers were using BDO for human consumption.
  • Right Price Chemicals continued to sell BDO for human consumption despite knowing it was being used illegally.

The July 13, 2020, temporary restraining order immediately shut down operations of the business and any further distribution of BDO and other chemicals by Jake Daughtry, Joe Daughtry, Sandra Daughtry, and Kip Daughtry. 

They have since agreed to a permanent injunction that prohibits any of them or Right Price Chemicals, from ever selling or distributing BDO to anyone in the future.

It is unclear what charges have been filed against the other defendants. 

Read full news release here...

Two Jake’s Fireworks defendants, including the owner of the Nederland business, have pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Jake Ellis Daughtry, 35, of Nederland, pleaded guilty to conspiracy to possess with intent to distribute a date rape drug over the internet to an unauthorized purchaser. Kip William Daughtry, 48, of Vidor, pleaded guilty to possession with intent to distribute a controlled substance analogue.

According to information presented in court, Jake Daughtry and Kip Daughtry are the leaders of a Chemical Trafficking Organization (“CTO”) cell operating on a national scale.  Investigation of the organization began in 2018 when DEA 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 death.

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.  A seasonal fireworks business called “Jake’s Fireworks” is also operated at that location.  Customers from all over the United States were able to order quantities of BDO from the Right Price Chemicals website in small amounts to use for personal consumption. The Daughtry’s continued to sell BDO even after becoming aware that some customers were ingesting the substance for its’ narcotic effect, rather than using it for its intended commercial purpose.  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.

The defendants were indicted by a federal grand jury on June 3, 2020 and face up to 20 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

In addition, Jake Daughtry, Joe Daughtry, Sandra Daughtry, and Kip Daughtry agreed to the entry of a permanent injunction that prohibits them, or Right Price Chemicals, to ever sell or distribute BDO to anyone, anywhere, at any point in the future.

“After being notified by Florida law enforcement that this dangerous and lethal chemical was being sold to users for a nefarious purpose, East Texas law enforcement agencies took action to protect the public and prevent others from falling prey to the sale and use of this dangerous substance,” said U.S. Attorney Brit Featherston.  “This was a complicated investigation involving numerous investigative agencies and both the criminal and civil divisions of the U.S. Attorney’s Office.  Their collaborative efforts have made our community and country a safer place to live.”

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case is being investigated by the Drug Enforcement Administration West Palm Beach, Florida, and Beaumont; U.S. 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).  This case is being prosecuted by Assistant U.S. Attorneys Christopher Rapp, Donald Carter and Robert Wells.

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This is a developing story. We will update with more if and when we receive more confirmed information.

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