Justice Center Jail.JPG
Multnomah County's Justice Center Jail sits across the street from the Mark O. Hatfield U.S. Courthouse in downtown Portland.
(The Oregonian file)
A 27-year-old inmate in the Justice Center Jail is accused of smuggling a synthetic opioid many times more powerful than heroin into the downtown Portland lockup last weekend, causing at least three of her fellow inmates to overdose.
Channing Lacey appeared before a U.S. magistrate judge on Friday to face a two-count indictment that charges her with distributing fentanyl citrate inside the women's jail. The drug caused serious injury to inmates identified in the indictment as "S.D.," "K.E." and "L.H." Channing Lacey
Lacey pleaded not guilty to the charges, which carry a mandatory minimum sentence of 20 years in federal prison.
Until her arrest on March 5, Lacey was a bit player in an international conspiracy to smuggle fentanyl into North America from a shipper in Shanghai, China, according to federal court papers filed in Portland.
A major U.S. probe of that dangerous pipeline, orchestrated by agents with Homeland Security Investigations and local police departments, appears to have begun on Jan. 3. That's when an 18-year-old man named Bailey Henke died from a fentanyl overdose at an apartment in Grand Forks, North Dakota.
Fentanyl has been around for more than a half-century, lawfully used as a pain reliever such as morphine - often in the form of a fast-acting patch. But fentanyl, which is said to be 80 times more potent than morphine, has increasingly resulted in overdoses in the U.S., federal agents say.
A typical "user" amount is 1 milligram, and a gram sells for up to $1,000 on the street, according to court papers filed on Thursday by Assistant U.S. Attorney Scott M. Kerin.
Investigators traced the source of the drugs that killed Henke to a house several hundred yards away from where he overdosed.
A task force of agents and police detectives armed with a warrant searched the property, finding cash, drug paraphernalia, a laptop computer and a white powder later determined to be fentanyl, according to a criminal complaint affidavit signed by Homeland Security Investigations Special Agent Guy Gino, who works on a Portland-based drug task force.
Investigators interviewed Ryan Jensen, who lived in the house. Jensen admitted he bought illegal drugs on the Internet dark site "Evolution" and logged in to the encrypted members-only site to buy 1 gram of fentanyl and 12 grams of heroin, according to the affidavit.
Authorities accuse Jensen of selling 250 milligrams of fentanyl to two friends, including overdose victim Henke.
Investigators say they logged into Jensen's Evolution account, finding that he had made six illegal purchases from the site, including a Dec. 7 shipment from a Southeast Portland man later identified as Brandon Hubbard, Channing Lacey's boyfriend.
Members of the drug task force later bought bitcoin, a form of decentralized Internet currency, and opened an undercover account to purchase 100 milligrams of fentanyl citrate from Hubbard, listing their return address as a post office box in Fargo, North Dakota.
Investigators from the Portland and Grand Forks task forces secretly tailed Hubbard, watching him use a Bitcoin kiosk in the food court of the Pioneer Place Mall in Portland. They also uncovered records showing that Hubbard made two bitcoin exchanges in late January totaling $14,580, according to Gino's affidavit.
On Jan. 21, agents tailed Hubbard's brand new Volkswagen GTI as he drove to a Postal Annex, bought packaging items and returned to his home. They noticed that as he approached his house, he began to drive in a big circle as if to expose anyone who might be following him.
Later that day, agents tailed him to a U.S. postal facility near Portland International Airport and watched him mail nine envelopes to people across the United States.
In the first minutes of Jan. 22, authorities raided Hubbard's studio apartment, finding 100 grams of fentanyl citrate, scales, packaging materials, mailing envelopes and cash, according to the affidavit.
They also arrested Hubbard, who told them he had sold more than 400 grams of fentanyl on Internet dark sites, authorities say.
"Hubbard admitted that in November 2014, he purchased approximately 750 grams of fentanyl citrate for purposes of further distribution and that the 'street value' of the 750 grams of fentanyl citrate was approximately $1.5 million," according to Gino's affidavit. "Hubbard also said he knew that fentanyl citrate was an extremely powerful narcotic and that it could easily cause an overdose and kill someone."
He told investigators that throughout 2014, he dealt with a Canadian supplier as part of a large-scale operation to distribute the drug, court papers allege. Sometime around Thanksgiving last year, he received a FedEx package from China -- through a friend's company in Woodland, Washington -- that contained 250 grams of fentanyl, according to the documents.
While Hubbard sat in jail, Lacey dug up a stash of fentanyl buried outside her boyfriend's apartment in Southeast Portland, court papers show.
When authorities arrested Lacey on March 5, she told them she had overdosed on fentanyl multiple times, according to a government court paper intended to keep her in jail as she awaits trial.
What Lacey didn't tell authorities, the government alleges, is that she had hidden a bag of fentanyl inside her body.
Corrections officers don't conduct searches of inmates' body cavities without a court order. So when she was placed in the women's unit on the eighth floor of the Justice Center Jail, she was able to pull out the drugs and distribute them, according to prosecutors.
Before her first court appearance on March 6, Lacey distributed the fentanyl to a fellow inmate, telling her it was "China White" heroin. The drug was soon subdivided inside the walls of the women's unit.
The first overdose occurred last Saturday, followed by another on Sunday and another on Monday, according to Lt. Steve Alexander, a spokesman for the Multnomah County Sheriff's Office, which operates the jail. One by one, he said, they were transported by ambulance to the emergency room at Oregon Health & Science University.
Detectives with the sheriff's Special Investigations Unit brought in drug sniffing dogs as authorities shook down the women's jail, which holds about 200 inmates. They searched the dorm and flipped cells to find the remaining fentanyl, repeating their work as a precautionary measure at the Inverness Jail on the north end of Portland.
No one died in the overdoses. The inmates are all back in custody. But the investigation continues.
"It is a never ending battle to keep the drugs out," Alexander said, "and there are a variety of ways people arrested bring them in."
-- Bryan Denson
503-294-7614; @Bryan_Denson
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