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Drug dealer turned entrepreneur is sentenced to prison

When Fawzi Al-Arashi was accused of selling synthetic marijuana out of his North Tonawanda storefront, he set out to make things right with his family.

Six years later, the e-cigarette company he formed after his arrest is doing $150 million in sales and employs 140 people, many of them Burmese immigrants.

Al-Arashi's lawyers say Magellan Technology, located in Riverside, is now one of the largest e-cigarette makers in the country.

On Tuesday, U.S. District Judge Richard J. Arcara pointed to Al-Arashi's business success in sentencing him to a year and a day in prison, well below his recommended sentence of up to 71 months in prison.

Al-Arashi's sentence stems from a 6-year old plea deal in which he admitted running a wholesale synthetic marijuana distribution business that included his convenience store on Main Street in North Tonawanda.

He also sold synthetic marijuana to other retailers and owned a warehouse on Ridge Lea Road in Amherst big enough to handle large quantities of the drug.

"That was the lowest point of his life," defense lawyer Cheryl Meyers Buth said Tuesday. "But unlike a lot of our clients, he didn't sit around and feel sorry for himself."

When Al-Arashi was first arrested in 2012, federal prosecutors described him as a wholesaler who bought his synthetic marijuana in California, repackaged it at his warehouse and resold it across New York State.

Later, as part of a plea deal with federal prosecutors, he admitted being part of a larger criminal conspiracy.

"He directed the conspiracy," Assistant U.S. Attorney Timothy C. Lynch said Tuesday.

Investigators from the Drug Enforcement Administration said their interest in Al-Arashi began with phone calls from suspicious parents and alleged that at least two children were hospitalized after using drugs he sold.

At the time, investigators said they also seized four of Al-Arashi's bank accounts, which held about $725,000, as well as about $50,000 worth of silver bars and coins found in his Williamsville home.

Investigators said Al-Arashi sold the synthetic marijuana in brightly colored packages with names such as "Pump It," "Tiger Shack" and "California Dreams."

"Despite the green rush sweeping our area of late, today's sentencing makes two things crystal clear," U.S. Attorney James P. Kennedy Jr. in a statement Tuesday, "One, the manufacture and distribution of marijuana - whether real or synthetic - remain federal crimes. And two, proceeds from the manufacture and distribution of marijuana remain subject to federal seizure and forfeiture."

Meyers Buth said Al-Arashi, a native of Yemen, started Magellan Technology with the help of family and friends who loaned him money after his arrest six years ago, and suggested his success is evidence of his rehabilitation.

"He built the company from scratch," she said. "We believe what he's done the last six-and-a-half years is extraordinary."

 

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