NOTE THIS POST IS FROM MAY OF 2015.
DALLAS — A federal grand jury in Dallas has indicted 32 defendants, including Gas Pipe, Inc., its owner, his daughter, and numerous managers, on felony charges stemming from their involvement in a massive synthetic drug distribution conspiracy, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
“I commend the Drug Enforcement Administration, the Duncanville, Desoto, and Dallas Police Departments, the Denton County Sheriff’s Office, Internal Revenue Service Criminal Investigation, and the U.S. Marshals Service for their work in conducting this long and thorough investigation,” said Acting U.S. Attorney Parker. “This indictment is just another step in our continued effort to protect the citizens of this community from being harmed by the dangerous synthetic drugs that continue to be marketed as ‘legal’ alternatives to illicit drugs.”
“Due to the significant public dangers associated with synthetic drugs, and in this case synthetic cannabinoids, DEA, in coordination with our state and local partners, have made this a law enforcement priority,” said Acting Special Agent in Charge Calvin C. Bond of the DEA in Dallas. “We will continue to coordinate investigative activities with our law enforcement partners in an effort to dismantle organizations responsible for manufacturing and trafficking these dangerous synthetic drugs.”
The indictment supersedes an earlier indictment returned in the case. Six defendants, including Lawrence Shahwan, 39, of Lewisville, Texas, were charged in that indictment and other charging documents with various felony offenses related to the distribution of synthetic cannabis and/or marijuana. All of those defendants have pleaded guilty. One defendant, Justin Laney, was sentenced to 41 months in federal prison. Defendants William Venable, Jason Bond, Craig Starnes and Brody Jones are set for sentencing at various dates in the upcoming months. Shahwan is scheduled to be sentenced in August 2015. According to plea documents filed in his case, if the court agrees, he faces a 156-month federal prison sentence and the forfeiture of over $3 million in property.
The indictment that was unsealed this afternoon charges each of the below-listed defendants with one count of conspiracy to defraud the United States:
Gas Pipe, Inc.
Amy Lynn, Inc.
Gerald Shults, a/k/a “Jerry,” 68
Amy Herrig, 39
Rolando Rojas, a/k/a “Ro,” 40
Ryan Yarbro, 40
John Ben Lincoln, 55
Christopher Ramirez, 32
Daniel Caillier, 48
Kendall Silva, 33
Elizabeth Walker, 36
Bridgett Payrot, 27
Jason Lyon, 42
Joshua Campbell, 32
Mick Clark, 49
Brandon Schubert, 29
Jackie Randall-King, 48
Holly Patterson, 38
Brad Bader, 29
Travis Lovin, 31
Jennifer Dunn, 38
Patrick Shanahan, 31
Carolyn Settlemire, 46
Tom Scott, 68
Rapids Camp Lodge, Inc.
Ridglea Complex Management, Inc.
The majority of these defendants either self-surrendered this week or were arrested today, and most have made their initial appearance in federal court.
In addition to conspiracy, the indictment charges Gas Pipe, Inc. (Gas Pipe), Amy Lynn, Inc. (Amy Lynn), Gerald Shults, Amy Herrig, and Ryan Yarbro each with one count of conspiracy to distribute a controlled substance, one count of distribution of a controlled substance near a public playground and one count of conspiracy to distribute a controlled substance analogue.
Gas Pipe, Amy Lynn, Gerald Shults and Amy Herrig are also each charged with eight counts of maintaining a drug involved premise and aiding and abetting; one count of maintaining drug-involved premises in or near a public playground; and three counts of importing a controlled substance analogue and aiding and abetting.
Gas Pipe, Amy Lynn, Gerald Shults, Amy Herrig, Carolyn Settlemire, Rapid Camp Lodge, Inc., and Ridglea Complex Management, Inc. are also each charged with one count of conspiracy to commit money laundering.
According to the indictment, Shults owned Gas Pipe and Amy Lynn, which maintained locations in Austin, Arlington, Dallas, Fort Worth, Garland and Plano, Texas, and in Albuquerque, New Mexico. Gas Pipe and Amy Lynn sold millions of dollars in products commonly referred to as “spice” in the “designer” or synthetic drug market. “Spice” is a common street term referring to a smokeable organic plant substance that has been combined with a synthetic cannabinoid. The synthetic cannabinoids contained in the “spice” they distributed was typically considered either Schedule I controlled substances or controlled substance analogues. To perpetuate an illusion of legality surrounding their “spice” distribution, Gas Pipe and Amy Lynn marketed and sold these products to the general public throughout Texas and New Mexico as “herbal incense,” “potpourri,” or “aroma therapy products, claiming these products were “not for human consumption.”
According to the Drug Enforcement Administration (DEA), synthetic cannabinoids are a family of compounds that are functionally (biologically) similar to the delta9-tetrahydrocannabinol (THC), the main psychoactive component in marijuana. Synthetic cannabinoids are being abused for their psychoactive actions and serious public health and safety issues are associated with this abuse. Synthetic cannabinoids, however, are not organic but are chemicals created in a laboratory. There is an incorrect assumption that these products are safe. Physiological effects include increased heart rate and increase of blood pressure, seizures, agitation, vomiting, hallucinations, violence toward police/paramedics, inability to breathe and psychotic episodes.
In addition to being Shults’ daughter, Amy Herrig was known as “the lady who [ran] the Gas Pipe.” Rojas was Gas Pipe’s General Manager and was in charge when Herrig and Shults were not available. Yarbro served as the buyer for Amy Lynn and Gas Pipe, and he was in charge of Amy Lynn’s manufacturing of “spice.” Lincoln, Ramirez and Caillier served as area managers of various Gas Pipe retail locations and Silva, Walker, Payrot, Lyon, Campbell, Clark, Schubert, Randall-King, Patterson, Bader, Lovin, Dunn and Shanahan served as store managers. Settlemire was the office manager, and Scott served as the general contractor for Gas Pipe’s and Amy Lynn’s building projects. Scott also provided supplies to manufacture and produce the “spice” Gas Pipe and Amy Lynn distributed.
The indictment alleges that the defendants conspired together to introduce or deliver an adulterated or misbranded drug into interstate commerce with the intent to defraud or mislead. As part of the conspiracy, the defendants purchased, possessed, packaged, labeled, marketed, distributed and sold substances containing synthetic cannabinoids such as, AM-2201, JWH-250, UR-144, XLR-11, PB-22, 5F-PB-22, FUB-PB-22, THJ-2201 and AB-FUBINACA. The defendants purchased prepackaged “spice” from manufacturers and those “spice” products were delivered to the Gas Pipe and Amy Lynn warehouse located at 5800 Maple in Dallas, prior to being distributed to each of the Gas Pipe retail locations. These “spice” products would ultimately be marketed, distributed and sold, labeled as “herbal incense,” “potpourri,” or “aroma therapy products” under brand names such as, “Headhunter,” “Black Label,” “Scentsi Star,” “Assassin Revolution,” “Afghan Ice,” “No More Mr. Nice Guy,” “Sour D,” “iBlown,” “Venom,” “WTF,” “Apollo 13,” “Trinity,” “Alien,” and “Plur.” Each of these products was labeled “not for human consumption” and many stated “100% synthetic cannabinoid free” even though each of these products contained a synthetic cannabinoid that the defendants intended for human consumption as a drug. In fact, the indictment details 34 undercover purchases of “spice,” from November 2013 through May 6, 2014, from the various Gas Pipe retail locations.
The indictment alleges that Gas Pipe, Amy Lynn, Shults, Herrig and Yarbro conspired together and with others to manufacture and distribute AB-FUBINACA, AM-2201, JWH-250, UR-144, XLR-11, PB-22, 5F-PB-22, FUB-PB-22, and THJ-2201, and, on March 11, 2014, they distributed the AB-FUBINACA within 1,000 feet of a public playground.
Gas Pipe, Amy Lynn, Shults, Herrig, Yarbro and Settlemire allegedly purchased, from a company in Denmark, Schedule I controlled substance analogue, THJ-2201, that was imported into the United States from Denmark or China.
The conspiracy to commit money laundering count alleges that Gas Pipe, Amy Lynn, Shults, Herrig, Settlemire, Rapids Camp Lodge, Inc., and Ridglea Complex Management Inc. conspired to commit money laundering by transferring earned proceeds from multiple Wells Fargo bank accounts to various financial accounts at UBS Financial Services. They also used the proceeds to purchase various materials, equipment and real property to facilitate the continuation of the manufacturing and distribution of “spice.” They concealed the source and nature of their proceeds by purchasing assets through a seemingly unrelated and different business entity, and they comingled proceeds from the conspiracy with legitimately earned assets in an effort to conceal the true source and nature of the criminal derived funds.
A federal indictment is an accusation by a grand jury. A defendant is entitled to the presumption of innocence unless proven guilty. The offenses charged in the indictment carrying maximum sentences ranging from five to 40 years for each count and fines up to $2 million.
The indictment also includes forfeiture notices that will require some of the defendants, upon conviction, to forfeit proceeds of their criminal activity to the government, as well as real estate located in Arlington, Clifton, Dallas, Austin, Garland, Fort Worth, and Highland Park, Texas; several parcels of real estate in Alaska; five aircraft; a fishing boat; and approximately $16,258,500 in funds the government has already seized.
The DEA, the Duncanville, Desoto, and Dallas Police Departments, the Denton County Sheriff’s Office, Internal Revenue Service Criminal Investigation, and the U.S. Marshals Service investigated. Assistant U.S. Attorneys Brian Poe, Errin Martin, and John J. de la Garza are handling the prosecution.
