Wisconsin couple admitted to manufacturing anabolic steroids at a clandestine laboratory set up in a Lake Geneva apartment.
Russell Spalding and his wife Kathryn Spalding were indicted on charges of anabolic steroid distribution, conspiracy to distribute anabolic steroids and maintaining a place for the purpose of manufacturing and distributing steroids. Russell Spalding pleaded guilty to all three charges on June 5, 2019.
Russell Spalding admitted that he was the leader of the underground laboratory known as “Cerastes Pharmaceuticals” from October 2014 throught October 8, 2015. Spalding described how he imported Alpha Pharma steroid products and raw steroid powders from a steroid source based in the United Kingdom. He also admitted to marketing and selling Cerastes Pharma products to customers who were members of his Facebook group(s).
Cerastes Pharma was busted after two confidential sources snitched on them.
The Wisconsin couple recruited at least eight friends and family to help them run their illegal steroid business. Some of the “employees” were in charge of receiving international steroid packages and working in the clandestine lab. Another was in charge of shipping Cerastes Pharma products to customers via a Stamps.com account. And other were in charge of redistribution of Cerastes Pharma products. They were all compensated for their participation.
The beginning of the end of the Cerastes Pharmaceuticals enterprise occurred after two confidential sources provided information to special agents working for the U.S. Drug Enforcement Administration (DEA) beginning in May 2015. This prompted federal agents to review customs seizure records.
The DEA discovered that the U.S. Customs and Border Patrol (CBP) had previously intercepted packages containing significant quantities of human growth hormone, anabolic steroids and other bodybuilding drugs on multiple occasions in 2014.
In July 2015, the DEA obtained and executed search warrants to monitor Facebook accounts operated by Russell and Kathryn Spalding. The DEA also surveilled the couple which eventually led authorities to the apartment where the couple operated their UGL.
In August 2015, the DEA learned that Kathyrn Spalding had dropped off large numbers of packages at the Lake Geneva Post Office on a regular basis for approximately two years.
The DEA investigators connected several of the packages with customers who ordered Cerastes Pharma products via Facebook private messages. The Facebook private messages also included hundreds of correspondences with the Spalding’s steroid supplier in the United Kingdom.
On October 8, 2015, DEA and law enforcement agents raided the Spalding’s Lake Geneva residence and seized large quantities of raw steroid powder and finished steroid products bearing the Cerastes Pharma label. In addition, they also found evidence consistent with the operation of a clandestine drug lab including thousands of empty vials, vial caps, labels, beaker, empty capsules, liquid filling machines, pumps, gloves, surgical masks, price lists, steroid manufacturing recipes and customer shipment lists.
Russell Spalding admitted that he had approximately 200 customers solicited from Facebook groups he maintained with as many as 400 members.
Russall Spalding was previously convicted of a felony. He faces up to 40 years in prison and $2 million in fines. His sentencing date is scheduled for November 26, 2019.