The Dark-World with U-47700 and Bitcoin

Congress should sanction China operations due to synthetic opioid production and should also list all variants of synthetic opioids as weapons of mass destruction under the chemical and biological weapons convention. DEA now has offices in China to work with officials there and investigation trafficking patterns.

The United States consumes 85% of all the world’s natural and synthetic opiates, which in 2015 factored in 33,091 U.S. deaths, up more than 4000 from the previous year, according to the U.S. Centers for Disease Control and Prevention. Opioid overdoses have quadrupled since 1999. When average U.S. life expectancies for men and women edged downward last year, for the first time in decades, many health professionals blamed opiate abuse.

The opium poppy is no longer the starting point for many of the opiates on the street. The new compounds, often sold mixed with heroin, originate in illicit labs in China. “For the cartels, why wait for a field of poppies to grow and harvest if you can get your hands on the precursor chemicals and cook a batch of fentanyl in a lab?” says Tim Reagan, resident agent in charge of the U.S. Drug Enforcement Administration’s (DEA’s) Cincinnati office.

In late 2015, the drug agency persuaded its Chinese counterpart to add 116 synthetic drugs to its list of controlled substances; fentanyl and several analogs were included. In response, underground Chinese labs began tweaking the fentanyl molecule, which is easy to alter for anyone with basic knowledge of chemistry and lab tools. By adding chemical groups, unscrupulous chemists have created new, unregulated variants, some of them even more potent than the original.

Hoping to stem the tide of synthetic opiates, DEA has taken the fight to China, as prolific a maker of illicit drugs as it is of legitimate chemicals. According to a U.S.-China Economic and Security Review Commission report last month, “China is a global source of illicit fentanyl and other [new psychoactive substances] because the country’s vast chemical and pharmaceutical industries are weakly regulated and poorly monitored.” In response to U.S. pressure, China has scheduled fentanyl and several other derivatives. More here.

U-47700
COMMON NAMES
U-47700
EFFECTS CLASSIFICATIONS
Opioid
CHEMICAL NAME
3,4-dichloro-N-[2-(dimethylamino)cyclohexyl]-N-methylbenzamide
DESCRIPTION
U-47700 is a short-acting synthetic opioid analgesic that first became available via online vendors in late 2014. It has only a short history of human use. U-47700 has been detected in counterfeit pharmaceutical opioids and associated with deaths.BASICS EFFECTS IMAGES HEALTH DOSE CHEMISTRY
Mar-Apr 2016 – Fake oxycodone tablets containing U-47700 are seized by law enforcement in Ohio and fake Norco tablets containing U-47700 and fentanyl appear in the Sacramento, CA area.

An 18-Year-Old Girl Died From a Synthetic Opioid She Bought Online. Here’s How Portland Police Cracked the Case.

A fatal overdose in East Portland leads detectives into the Dark Web, where lab-created opioids are bought with Bitcoin.

Courtesy of Jessica Collins

Even by Portland standards, the weather was dreary on the day Aisha Zughbieh-Collins died.

It was late morning Feb. 16 when Jessica Collins drove through a 40-degree drizzle to the pink and yellow townhouse on Southeast 84th Avenue, where Aisha, her 18-year-old daughter, lived.

Collins drove gingerly down the rutted, dead-end gravel street. It’s the kind of street that’s often lined with abandoned shopping carts.

She got out of her truck, walked into Aisha’s townhouse and climbed the stairs with a sense of dread. For the past 12 hours, Collins had been unable to reach her daughter.

Just two weeks earlier, Aisha had overdosed, her life saved when a roommate called paramedics.

As Collins entered her daughter’s bedroom, Aisha was sitting lotus-style on her bed.

“Each step closer I could tell something was really wrong,” Collins recalls.

Aisha had a syringe in her right arm, and a shoelace tourniquet tied around her biceps. She wasn’t breathing. Her skin was cold.

“I know it sounds strange,” Collins says, “but a sense of peace came over me—that she’s OK now—even though she was dead in front of me.”

Drug overdoses now kill more people than firearms or automobile crashes in Oregon, according to state figures, and are the largest cause of accidental death in the U.S. As the country’s overdose death total continues to soar, Oregon officials have responded far more effectively than officials in most states (see chart below).

Source: Centers for Disease Control
While opioid overdose deaths nationally rose 57 percent from 2010 to 2015, they actually dropped slightly in Oregon over the same period. Source: Oregon Health Authority
While opioid overdose deaths nationally rose 57 percent from 2010 to 2015, they actually dropped slightly in Oregon over the same period. Source: Oregon Health Authority

But even in Portland, which has slowed overdose deaths resulting from heroin and prescription opioids such as oxycodone, Aisha’s death is part of a new and dangerous development.

The drug that killed her was a potent “synthetic” opioid manufactured in China—a drug so new that narcotics investigators and Portland’s public health officials had never encountered it before.

“What we don’t have a lot of here yet is the synthetics,” says Dr. Paul Lewis, the Multnomah County health officer. “That could change.”

When Portland Police Bureau detectives arrived at Aisha’s townhouse, they were initially stymied. Their investigation would eventually lead them across the country and into the deepest recesses of the internet: places where the common currency is Bitcoin, and where buyers and sellers are anonymous and far removed from each other.

The trail would take them to a condo in South Carolina, and to one of the Dark Web’s most prolific synthetic opioid sellers.

“We’d never done a case like this,” says the Police Bureau detective who led the investigation. “We weren’t familiar with the substance. And we had no idea where it came from.”

Aisha Zughbieh-Collins traveled a long way in a short life that started on the Gulf Coast of Florida.

She was petite—barely 5 feet 4 inches tall, with a quick smile. She loved animals: She used to have a cat named Bebe and a Burmese python named Applejack. She liked sushi and Thai food, root beer and cream soda. She listened to Bright Eyes and Nirvana.

In November 2015, Aisha ran away from a foster-care facility in Baltimore, where her mother says she’d been assaulted. Aisha reconnected with her mother, who was also living in Maryland but who had lost custody of Aisha three years earlier.

Rather than return Aisha to foster care, the pair decided to head west to begin new lives. They left shortly before Thanksgiving. “We didn’t know where to go, but we wanted warm weather,” Collins says.

They drove west in a sunflower-colored Nissan Xterra, using throwaway phones and paying cash at cheap motels. They feared authorities might be looking for Aisha, who was 17 years old and still a ward of the state.

They arrived in Oregon in February 2016, and Collins found work as a host in a remote campground in Mount Hood National Forest.

They liked the woods, but for Aisha, there was little in the way of entertainment—nobody her age, nowhere to eat, and no WiFi. “It was hard for Aisha to be without the internet,” Collins says.

In May of that year, Aisha found a place to live on Craigslist and moved to the Brentwood-Darlington neighborhood just east of 82nd Avenue, sharing with several housemates the townhouse where she would eventually die.

Collins says her daughter had been using hard drugs in Maryland, and had started using again when Collins moved to Portland, living near Aisha.
She told her mother she was using a drug called U-47700.

U-47700, known sometimes as U4 or “pink,” was developed by the pharmaceutical company Upjohn in 1976 as an alternative to morphine but never received U.S. Food and Drug Administration approval. As a result, it was never placed on the FDA’s schedule of illicit drugs, so for decades there was no prohibition on its manufacture or distribution. It existed in a gray zone—neither approved for use nor specifically illegal.

And while Upjohn never manufactured the drug, laboratories in China—where law enforcement officials say many synthetic opioids are made—figured out how to do so.

U-47700 is also lethal—nearly eight times more potent than heroin. Records show the feds first became aware that people were using U4 to get high in October 2015, although they weren’t sure where the drug was coming from.

In the next year, they recorded 46 overdose deaths, most on the Eastern Seaboard. In November 2016, the U.S. Drug Enforcement Administration, “responding to the imminent threat to public health and safety,” made U-47700 a schedule I substance, classifying it among the most dangerous street drugs.

“I told Aisha U4 was suicide,” Collins recalls. “You can’t choose whether you live or die. It’s like Russian roulette.”

Rising Synthetic Tide: Overdose deaths from synthetic opioids rose much faster last year than overdose deaths from heroin or prescription pain pills. 

Source: Centers for Disease Control
Source: Centers for Disease Control

The day Aisha died, Portland narcotics detectives arrived at her townhouse. The lead detective is a stocky cop, with salt-and-pepper hair and, considering his job, a cheery demeanor.

The detective later spoke to WW but insisted on anonymity because he works undercover. He sees a lot of dead bodies: There are about two fatal overdoses a week in Portland, most opioid-related.

But this one stood out, the detective says, not only because he’d never heard of the drug that killed Aisha, but also because she was a woman, and so young—the average overdose victim in Oregon is a man over 35.

The house where Aisha Zughbieh-Collins died. (Hilary Sanders)
The house where Aisha Zughbieh-Collins died. (Hilary Sanders)

Portland’s approach to overdose deaths changed in 2007, when Kraig Crow, a Lincoln High School graduate, fatally overdosed.

“Our policy here is different from other jurisdictions’,” the detective says. “Before, we just walked away and let the medical examiner handle it.

“After the Lincoln case,” he continues, “we started asking, ‘What can we find at the scene that can allow us to investigate further?'”

When Portland detectives respond to an overdose death now, they are looking for witnesses, phones and the packaging in which drugs are delivered.

In the Crow case, prosecutors won convictions of six defendants, including what’s called a “Len Bias conviction” for the top dealer.

That law, named after University of Maryland basketball star Len Bias, who died of a cocaine overdose in 1986 after being picked second overall in the NBA draft, became a potent tool for prosecutors because it replaced lighter sentences with a 20-year prison term for those who deal drugs leading to a death.

Federal prosecutors in Oregon are recognized as national leaders in bringing Len Bias cases.

Investigators try to determine how the fatal dose moved from the original source to the consumer, establishing a chain of custody. “Every person in the chain is potentially liable for the overdose death,” says Steve Mygrant, an assistant U.S. attorney who has prosecuted several dealers in fatal overdose cases. (Local and federal officials often cooperate on Len Bias cases.)

Aisha’s mother told detectives she thought her daughter bought U4 online, and she provided them with Aisha’s email address.

The detectives also found unusual materials in Aisha’s bedroom—distinctive packaging suggested someone had carefully disguised the U-47700 to send it through the mail.

The drug Aisha bought had been hidden in a VeriQuick brand pregnancy test kit—sold only at Dollar Tree stores—and appeared to have arrived from an unknown seller in a U.S. Postal Service shipping envelope from South Carolina.
Those were clues. But the detectives couldn’t work their way up the usual chain of delivery as they do in heroin cases.

“Our calls usually come from people complaining about a neighborhood drug house,” the detective says. “This online stuff is at a completely different level.”

The next day, the detectives asked for help from federal experts who knew how to navigate the deepest recesses of the internet.

In 2013, federal agents busted Silk Road, a vast online bazaar for drugs, child pornography, illegal weapons, stolen credit cards, valuable personal information, hacking services and even contract killers.

Silk Road operated on what’s called the Dark Web. That’s the term used to describe the vast array of websites that operate out of reach of the average web surfer.

The internet is like an iceberg: Experts say less than 5 percent of websites are visible using typical browsers such as Safari, Firefox or Chrome.

Some of what’s under the surface is benign material that is simply password-protected: legitimate financial and medical records, for instance, that are shielded for privacy reasons. But it is also used by dissidents in countries where free speech isn’t allowed—and by criminals of all kinds.

Dark Web users need a couple of things to access such sites: a specialized (and easily downloadable) browser called Tor and, if they want to remain anonymous, a tool that encrypts their communications and preserves their anonymity. Aisha used what’s called a PGP (“pretty good privacy”) key to hide her activity.

And for people who wish to buy or sell goods or services on the Dark Web, using Bitcoin or another virtual currency adds another layer of anonymity. Bitcoin, which Aisha used, allowed her to purchase drugs without creating the kind of easily traceable trail that credit or debit cards leave behind.

“But once you clear the smoke,” says George Chamberlin, chief of the FBI’s Oregon Cyber Task Force, “it’s not that different from the visible internet.”
When Silk Road disappeared because of the indictment and conviction of its creator, other Dark Web marketplaces took its place. One, called AlphaBay, offers a staggering array of illicit drugs.

Sellers hawk their wares aggressively and encourage buyers to rate their experiences just as customers do on conventional sites such as Amazon, Yelp or Trip Advisor. But instead of rating tacos or hotel rooms, buyers are rating heroin, meth or the newest kind of illicit narcotic, synthetic opioids.

“The game is changing,” the FBI’s Chamberlin says, “especially because of synthetics. They are different because of their potency and because they are trafficked on the Dark Web.”

Detectives found that Aisha had written an alphanumeric code on a pad in her bedroom. That code identified her PGP key.

They determined that Aisha’s PGP key had been used to buy drugs on AlphaBay.
The detective learned that, using her PGP, Aisha had purchased U-47700 on Feb. 11, five days before her death, from a vendor who called himself “Peter the Great”—like the Russian emperor.

A U.S. postal inspector determined the envelope found in Aisha’s bedroom had a fictitious return address but was purchased at a post office in Greenville, S.C.

In April, the Portland detective bought U4 over the Dark Web from Peter the Great. The drugs arrived, wrapped in material from Dollar Tree.

The person who purchased the shipping labels—presumably Peter the Great—used secure email addresses. The investigators then filed a subpoena for all records related to those addresses.

They turned up a name: Ted Khleborod, a resident of Greenville.

Peter the Great—who detectives now believed was Khleborod—was a prolific salesman: Figures on AlphaBay showed he’d done 9,553 transactions.

The Portland detective contacted federal officials in South Carolina. “We scared the crap out the assistant U.S. attorney back there when we told him about the substance and volume of sales,” the detective says. “This guy was sending out the equivalent of bombs.”

Ted Khleborod (Spartanburg County Sheriff’s Office)
Ted Khleborod (Spartanburg County Sheriff’s Office)

Khleborod, now 28, was born in Moldova, part of the former Soviet Union. When he was in high school, records show he spent time on bodybuilder chat boards, discussing the benefits of steroid use and posting as “Arnoldismyhero,” a tribute to former California governor and champion body builder Arnold Schwarzenegger.

He later studied at the University of South Carolina, where, according to his Facebook page, he was pre-med. He graduated in 2016.

Khleborod lived well for a college student, records show, driving a BMW—with a vanity plate that read “TEDALICUS”—and a Ducati motorcycle.

In late April, Portland detectives flew to Greenville to coordinate with local police.

For three days, they staked out Khleborod at his condo. They saw his girlfriend, Ana Barrero, leave his place twice to mail dozens of parcels, with labels matching those they’d found earlier in Aisha’s room and identical to those matching labels from the drugs that investigators bought over the Dark Web from Peter the Great.

They also obtained video of Barrero buying 71 VeriQuick pregnancy test kits at a Dollar Tree in Greenville.

On April 26, officers arrested Khleborod as he left work at an urgent care clinic. “He was a quiet guy, contemplative,” says the Portland detective. “I don’t think he used his own product, and based on his numbers, he could have made a million bucks in the past couple years.”

Khleborod, who is now in custody, faces federal charges in South Carolina. (His attorney did not respond to a request for comment.)

When officers served a search warrant on Khleborod’s condo, they wore hazmat suits to guard against the toxicity of U-47700. They hauled away 9 kilos of the drug, worth $270,000.

They also found a book, written for prospective doctors, called Kill as Few Patients as Possible.

The Portland detective says Aisha’s case revealed to him a new world of synthetic opioids and the Dark Web. He says he also realized that despite all the technically sophisticated tools dealers like Peter the Great employ, they are subject to human mistakes.

“Internet privacy—even with encryption—is not as great as you think,” the detective says. “People on the Dark Web still leave breadcrumbs we can follow.”
Jessica Collins says she’s happy police arrested Khleborod. But she remains heartbroken over her daughter’s death.

“I feel like she’s with me every day,” Collins says, “and I worry about how many other families this might happen to.”

Cam Strahm, the DEA chief for Oregon, applauds the police work that led to Khleborod’s capture. But he says after 26 years of chasing drug dealers, he’s come to understand the limits of that work.

“Addiction is a treatable disease,” he says, “and we’re facing an epidemic. We can’t arrest our way out of it.”

Aisha Collins (Courtesy of Jessica Collins)
Aisha Collins (Courtesy of Jessica Collins)

The Wages of Synthetics

The new challenge from synthetic opioids marketed over the Dark Web comes at a time when the trend in overdose deaths in Oregon is relatively positive.

Opioid deaths here have declined in recent years, while the trend in the rest of the country is still sharply upward. (The New York Times recently reported deaths jumped nearly 20 percent nationally in 2016.)

“When you look at the rest of the country, flat is good,”says Multnomah County Health Officer Dr. Paul Lewis.

There are two reasons for the good news. The first is naloxone, marketed under the brand name Narcan, a nasal spray that reverses overdoses. Under the leadership of former Multnomah County Health Officer Dr. Gary Oxman, the Portland area was a national pioneer in making naloxone widely available (“Who Wants to Save a Junkie?WW, March 13, 2013).

And Oxman’s successor, Lewis, pushed large metro-area medical systems to decrease the number of opioid pain pills prescribed to patients. That number has decreased each of the past five quarters.

Together, those two developments have caused the number of overdose deaths in Oregon to decline, a result most states would envy.

But deaths such as Aisha Zughbieh-Collins’ highlight a new danger: synthetic opioids such as fentanyl, carfentanil and U-47700 that are not prescribed by physicians but instead manufactured and sold illegally.

Lewis says there have been just two confirmed deaths in the metro area in the past 18 months in which U-47700 was the primary cause. But synthetic opioids are now the nation’s fastest-growing cause of overdose deaths. The death toll in some states is extraordinary: Last year, for instance, there were 34 deaths from synthetics in Oregon in 2015—and 949 in Massachusetts.

“The synthetic thing is new to everybody,” Lewis says. “We thought heroin was the foe, but now these synthetics come along. It’s a new chapter, and we don’t know how it ends.”

Cam Strahm of the U.S. Drug Enforcement Administration notes that synthetics such as fentanyl and carfentanil are dozens or even hundreds of times stronger than heroin.

Strahm says synthetics are also less predictable than heroin, which is now fairly standard in quality and potency. The dealers who sell synthetics often mix them in nonstandard “cocktails” and also frequently misrepresent what they are selling.

“When you are making illicit purchases from anonymous sources, you can’t depend on purity or that what you think you are buying is what you actually get,” Strahm says. “You really don’t know what you are purchasing. It’s like going on a vacation without knowing your destination.”

Posted in China, Citizens Duty, Department of Homeland Security, DOJ, DC and inside the Beltway, Drug Cartels, FBI, Gangs and Crimes, government fraud spending collusion, Legislation, The Denise Simon Experience, Treasury, Trump Administration, Whistleblower.

Denise Simon

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