The owner of the Capitol Petro chain of convenience stores, under investigation since 2015 for the sale of banned substances purported to mimic the effects of marijuana, agreed this week to plead guilty to two felonies, according to court documents filed late Tuesday by federal prosecutors.
A plea agreement states that Farooq Shahzad, 49, of Madison, will plead guilty to a charge of conspiracy to possess and distribute controlled substances and a charge of purchasing or possessing contraband tobacco. The charges were detailed in a document, known as an information, filed Tuesday in U.S. District Court in Madison, along with a plea agreement that Shahzad signed on Tuesday.
The filing of an information as a charging document in federal cases generally signals that a defendant has agreed to plead guilty to charges without a formal indictment by a grand jury.
No date for a plea hearing was listed in the case record on Wednesday.
Shahzad’s lawyer, Stephen Hurley, did not immediately respond to a message.
Last year, Shahzad agreed to pay $1.3 million in civil forfeitures, assessments and costs as part of a consent judgment approved by a Dane County judge, settling a separate civil forfeiture case brought against him by the state Department of Agriculture, Trade and Consumer Protection over the sale of so-called synthetic cannabinoids. Those products, generally sold under names like “Spice,” “K2” and “Kush,” are said to mimic the effects of marijuana, but law enforcement has warned often in recent years that chemicals in the products pose grave health risks to users.
Court documents in the forfeiture case state that on June 25, 2015, Madison police executed search warrants at Capitol Petro locations at 2702 and 3505 E. Washington Ave., seizing nearly all of the stores’ “Spice” inventory. More than a year later, Internal Revenue Service agents and officers from other agencies executed search warrants at six Capitol Petro locations.
A federal investigation followed, and court documents from the state civil forfeiture case indicated in 2016 that Shahzad had received a letter from the U.S. Attorney’s Office in Madison informing him that he was the target of a federal criminal investigation.
Documents filed in the federal case on Tuesday provide little detail about the crimes to which Shahzad has agreed to plead guilty. The information states that Shahzad “knowingly and intentionally conspired” with three people identified only by their initials “and others to distribute and possess with intent to distribute mixtures and substances containing detectable amounts” of several controlled substances in a list that followed.
The plea agreement states that the case involves the sale of synthetic cannabinoids.
The second count charges that Shahzad knowingly bought and possessed contraband smokeless tobacco, “specifically, a quantity of 720 single-unit consumer-sized packages of smokeless tobacco.”
Under the plea agreement, Shahzad will plead guilty to both counts. The controlled substances charge carries a penalty of up to 20 years in prison and a $1 million fine, while the tobacco charge carries up to five years in prison and a $250,000 fine.
Under the agreement, Shahzad and prosecutors will jointly ask U.S. District Judge James Peterson, who is assigned the case, to impose a $1 million fine, in addition to any prison term imposed by Peterson.
The agreement states that the government will recommend a reduction in Shahzad’s sentence due to his acceptance of responsibility, as long as he provides a full and truthful financial statement and makes agreed-upon restitution payments.
The agreement also states that Shahzad agrees to forfeit the Capitol Petro location at 3505 E. Washington Ave., but may pay $625,000 at least a week before his sentencing hearing to avoid forfeiture of the store.