A former Newport pastor and four members of his family are among 22 defendants in a major federal steroid conspiracy investigation centered in East Tennessee.
Edward Pasternak, 59, former pastor of Life and Praise Worship Center in the Western Plaza, and his wife, Lori Pasternak, 52, along with their sons, Joel Pasternak, 28; Jared Pasternak, 23; and Joshua Pasternak, 32, have pleaded guilty to the federal indictment.
The Pasternak parents live on Country Path Road in Newport.
Joel Pasternak, the leader in the operation, had been in federal custody since October 2016 until his Tuesday sentencing in US District Court before Judge Ronnie Greer.
He was sentenced to a 108-month prison term and the sentence will be followed by three years of supervised release. Pasternak also was ordered to pay a judgement of $2.8 million and he forfeited assets of $116,000.
During the sentencing hearing, Assistant US Attorney Helen Smith told the court an estimated 71 kilos of steroids were seized when search warrants were served on several locations, including the Pasternak’s Cocke County home.
“The DEA (Drug Enforcement Administration) says this was one of the largest, if not the largest, illegal steroid operations ever seized in the United States,” Smith told Greer.
According to court documents, the investigation into the conspiracy began in late 2012 and involved the DEA, Internal Revenue Service-Criminal Investigation, Homeland Security Investigation, and the United States Postal Inspection Service.
Pasternak led the large criminal organization which imported raw steroid products from China, manufactured injectable and oral steroid products for sale and distribution via the Internet, and laundered nearly $3 million in criminally-derived proceeds.
He pleaded guilty to eight counts in the indictment.
Court documents also allege the conspiracy sold defective steroids products to consumers, many of whom suffered serious bodily injury from injecting and ingesting the substances.
The Pasternak organization was an international web-based drug trafficking organization which used a website, Hulk-body, and invitation-only message boards and forums.
The scheme crossed state lines and involved an organization which segregated duties among more than 30 individuals to avoid detection.
The conspiracy relied almost exclusively on the United States Postal Service to receive raw steroid precursors, to ship finished products to customers, and to transfer large amounts of cash.
Approximately $2.5 million was laundered through Western Union, using a series of false identities and addresses.
Joel Pasternak ordered and received anabolic steroid powders directly shipped from China in misbranded packaging.
The operation involved four clandestine laboratories where the raw steroids were mixed with other substances and repackaged in vials, powders packaging, and in tablet form for individual consumption.
Joel Pasternak also recruited individuals to fill roles in the operation including product receivers and lab workers who mixed the anabolic steroids with other substances and shipped the anabolic steroids products to consumers.
Web managers designed and managed the websites which were Pasternak’s sole means of marketing and Pasternak selected The Incredible Hulk as the brand for his products. He repeatedly used the Hulk image on packaged products.
Pasternak’s parents, Edward and Lori, purchased properties which were converted to clandestine steroid labs and concealed their son’s ownership of the properties. Edward Pasternak also was an organizer and manager of persons involved in the conspiracy and acted as the scheme’s banker, holding large sums of cash for the organization.
Most of the defendants who pleaded guilty to information charges were college students affiliated with East Tennessee State University.
On July 7, 2015, agents executed five federal search warrants; four in Johnson City, where the labs were located and also the Edward and Lori Pasternak home in Newport.
At the four Tri-City homes, agents found steroid equipment, a complete large-scale manufacturing laboratory for anabolic steroids, thousands of vials of finished steroid product, approximately 19 kilograms of raw steroid powder, a marijuana grow operation, weapons, and electronic devices.
At the Newport home, the agents found $68,866 in cash and seized $4,680 from an account at a Newport bank, along with money bands, bank bags, vials of liquid, computers and thumb drives inside the house and in a nearby creek. Another computer was burned before agents could seize it, Smith told the court.
The next day a large number of individuals were interviewed across the country and admitted to their involvement in the conspiracy. Nine pleaded guilty to information filings and 13 more were later indicted by a grand jury.
Court documents indicate the conspiracy began in 2012 and ended on Sept. 30, 2015. The agents seized 27 different kinds of Schedule III anabolic steroids on July 7, 2015. The owner of two companies which sold glass vials to the operators told investigators the conspiracy purchased nearly 85,000 vials from him over several years.
Smith says the conspiracy derived more than $2.8 million in sales income. The examination of Joel Pasternak’s main laptop computer found more than 60,000 emails related to the conspiracy.
All of the defendants were indicted on a charge of the manufacture and distribution of anabolic steroids.
Joel, Edward, Joshua and Lori Pasternak were charged additionally with possession of equipment to produce steroids, as well as maintaining a place used for their manufacture.
Edward and Joel Pasternak, along with other defendants, also are charged with money laundering in the conspiracy.
Edward Pasternak reached an agreement in which he pled guilty to the conspiracy and money laundering offenses. He faces a prison term of up to 20 years.
Lori Pasternak admitted she laundered $80,000 which was used to purchase a Johnson City home. She faces a sentence up to 10 years. Joshua and Jared Pasternak, pleaded guilty to the conspiracy charge and face up to 10 years in prison when they are sentenced.