Owner of Madison convenience store chain gets 30 months in prison for synthetic marijuana, contraband tobacco

March 21, 2019

Farooq Shahzad, the founder and owner of a 17-location chain of convenience stores that dot the Madison area, was sentenced Wednesday to 2½ years in federal prison for his role in the sale of so-called synthetic marijuana at some of his stores and for selling untaxed contraband smokeless tobacco.

U.S. District Judge James Peterson said that in many respects the 50-year-old Pakistani-American business owner was a “fabulous story of success,” if not for the sale of synthetic cannabinoids — chemicals sold under brand names such as “Spice” and “K2” — at Shahzad’s Capitol Petro and CP Mart stores.

“Mr. Shahzad has a lot to recommend him in terms of his character,” Peterson said, referring to Shahzad’s devotion to his family, donations he has made to his mosque and other charitable acts. “He’s successful because he’s worked his butt off.”

But in Shahzad, Peterson saw what he called “compartmentalization,” a divide between Shahzad’s personal life and the way he conducts aspects of his business. Peterson called that “unfortunate.”

In addition to 2½ years in prison, Peterson followed the terms of a plea agreement and ordered Shahzad to pay a $1 million fine and to sell one of his stores and give the proceeds to the government. He was also ordered to pay $52,514 in restitution for taxes that should have been paid on the smokeless tobacco.

Shahzad will report to prison on April 15, at an institution to be named by the U.S. Bureau of Prisons.

Ignored warnings

Peterson said that for the sake of profit, Shahzad ignored warnings he received from his gasoline suppliers, Exxon Mobil and BP, from police and from others about the sale of synthetic cannabinoids. Even after the state of Wisconsin served search warrants at stores in June 2015, which should have cemented any doubt about whether the products were illegal, Shahzad continued to sell them until another police raid in 2016.

While others share the blame for the sale of the products — among them the chain’s former general manager, Zahid Shakeel — Shahzad was “still deeply aware and involved,” Peterson said.

Shakeel was charged Monday with money laundering and is expected to plead guilty to the charge at a later date.

Peterson said Shahzad’s lawyer, Stephen Hurley, made a good case for not sending Shahzad to prison, and instead placing him on probation. But in Shahzad’s case, he said, there are also “moral” reasons for incarceration. And this is a rare case, he said, in which the principle of general deterrence — punishing a single person to influence the behavior of others — was valid.

An apology

Shahzad spoke briefly in court during the sentencing arguments made by Hurley and Assistant U.S. Attorney Antonio Trillo, who had asked for a three-year prison sentence. But he made his appeal to Peterson about his fate in writing, in a statement submitted Tuesday.

In it, Shahzad first apologized to his family “for having lost sight of the lessons my father taught me, years of hard work, and so many 80-hour weeks to build the business, now my reputation (is) lost so quickly.”

He said he was wrong to sell “Spice,” and that he is responsible for what is sold in his stores.

“I want you to know that I have tried to make right what I did wrong,” he wrote. “Today is another step toward my regaining the community’s trust.”