When a Kingpin designation notice from Treasury pops up in your inbox, the first thought in your mind is not likely to be “steroids.” But Treasury clearly takes its counter-narcotics mandate seriously and has designated the network of the Slovenian steroids dealer Mihael Karner. If Karner’s name is familiar it is because in 2013 President Obama identified him as a Tier I Kingpin. This time around, OFAC has gone after his wife, brother, cousin, and two other associates. Also designated were fourteen front companies located all over the globe, including the Seychelles, Belize, Slovenia, and Gibraltar.

Though steroids are not technically considered a “narcotic” as defined by 21 USC 802(17), for the purposes of the Kingpin Act “narcotics trafficking” also covers the production, distribution, etc. of “controlled substance[s],” which includes the Schedule III anabolic steroids the Karner Network is accused of trafficking in.

According to the DEA, since at least 2000 Karner and his associates operated a vast online anabolic steroid distribution network using hundreds of websites. Precursor chemicals were sourced from Southeast Asia, while the drugs themselves were assembled at a factory in Eastern Europe. Proceeds were laundered through accounts in Autstria, Bulgaria, as well as using online payment processors in France, Iceland, Germany and Luxembourg. All told, Karner made at least $50 million from his business according to an indictment in Massachusetts.

An open question is why so much time passed between Karner’s initial listing and the designation of the rest of his network. While Karner was designated almost two years ago, the aforementioned 2010 indictment also covers his wife and brother. The locations of Karner’s front companies mentioned in the 2013 press release match up almost identically with those of the shells identified today. Karner and his wife also narrowly managed to avoid extradition from Austria in 2012 by posting $1.6 million in bail and then fleeing to Slovenia, which forbids the extradition of its citizens. It appears that much of the info that went into this latest action was available at least as far back as 2013. From an impact perspective, designating the entire network at once would seem preferable though there may be other considerations at play such as a desire to follow the money following Karner’s initial designation.

We asked Treasury for an explanation, though as expected they declined to comment on specific cases.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. This post was written by Samuel Cutler, Policy Adviser at Ferrari & Associates, P.C. If you have any questions please contact them at 202-280-6370 or ferrari@ferrariassociatespc.com or cutler@ferrariassociatespc.com.