The U.S. attorney’s office confirmed Friday that Jerry Shults, owner of the Ridglea Theater and the Gas Pipe head shop chain, and his daughter are accused in a federal indictment of involvement in a “massive synthetic-drug distribution conspiracy.”
WFAA reported Wednesday that Shults and Amy Herrig had surrendered to authorities in advance of the indictments.
According to Friday’s news release, they are two of 32 defendants in the case. Six were indicted last year and have pleaded guilty.
The additional 22 people and four businesses named Friday include Shults, Herrig, Gas Pipe Inc. and Ridglea Complex Management, Shults’ company which owns the office building adjoining the historic theater on Camp Bowie Boulevard.
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The government has seized property and money valued at more than $16 million, which will be forfeited upon conviction, according to the news release.
Shults and Herrig are charged with money laundering, conspiracy to distribute a controlled substance, distribution of a controlled substance near a public playground and other charges.
Several Gas Pipe store managers were also indicted. Among them are Bridgett Payrot, who ran the store at 1407 N. Collins St., and Travis Lovin, who ran the 130 E. Bardin Road store, both in Arlington, and Holly Patterson, who ran the 6033 Camp Bowie Blvd. location in Fort Worth.
“The majority of these defendants either self-surrendered this week or were arrested today, and most have made their initial appearance in federal court,” the news release said.
George R. Milner, Shults’ attorney said this week that “the Gas Pipe is fully prepared to fight these allegations and fully demonstrate it has done nothing illegal.”
The offenses carrying maximum sentences of five to 40 years for each count and fines up to $2 million, the news release said.
Shults’ companies, Gas Pipe Inc. and Amy Lynn Inc., sold millions of dollars worth of “spice,” a street term referring to a smokable organic plant substance combined with a synthetic cannabinoid, according to the indictment that was unsealed on Friday.
The spice products were marketed as herbal incense, potpourri or aroma therapy products in Texas and New Mexico and labeled “not for human consumption,” the indictment said.
Federal prosecutors say Gas Pipe, Amy Lynn, Shults and Herrig “maintained several locations in Arlington, Garland, Fort Worth and Dallas for the purpose of manufacturing and distributing substances containing synthetic cannabinoids. A location on Maple Avenue in Dallas was within 1,000 feet of a public playground.”
“As part of the conspiracy, the defendants purchased, possessed, packaged, labeled, marketed, distributed and sold substances containing synthetic cannabinoids,” the news release said.
According to the Drug Enforcement Administration, synthetic cannabinoids are a family of compounds that are functionally similar to THC, the main psychoactive component in marijuana. Synthetic cannabinoids are being abused for their psychoactive actions and present serious public health and safety concerns, the release said.
Synthetic cannabinoids are not organic but are chemicals created in a laboratory, and some may think they are safe, according to the release. Physiological effects include increased heart rate and an increase of blood pressure, seizures, agitation, vomiting, hallucinations, violence toward police/paramedics, inability to breathe and psychotic episodes, the release said.
Federal agents purchased spice labeled Assassins Revolution from Fort Worth and Arlington Gas Pipe locations that were incorrectly labeled, which is a federal crime, and contained controlled substances or substances with similar chemical structures to illegal compounds, according to the indictment.
Some of the products purchased by agents had labels stating that they were 100 percent synthetic cannabinoid free and that they were not for human consumption even though the defendants intended the products for human consumption as a drug, the indictment said.
The indictment also includes forfeiture notices that will require some of the defendants, upon conviction, to forfeit proceeds of their alleged criminal activity to the government, as well as real estate located in Arlington, Clifton, Dallas, Austin, Garland, Fort Worth, and Highland Park; several parcels of real estate in Alaska; five aircraft; a fishing boat; and more than $16.2 million in funds that the government has already seized.
Last year’s seizure
In August, the Ridglea Theater — a Camp Bowie Boulevard landmark owned by Shults and listed on the National Register of Historic Places —was seized by federal authorities.
Six defendants in the case, including Lawrence Shahwan, 39, of Lewisville, were charged at that time. All have pleaded guilty, Friday’s news release said. Justin Laney was sentenced to 41 months in federal prison. Defendants William Venable, Jason Bond, Craig Starnes and Brody Jones will be sentenced in coming 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.
After the theater was seized, the Star-Telegram reported that Shults, a Vietnam veteran, had minor drug paraphernalia delivery charges dating to the 1980s, but either they were dismissed or he paid small fines.
The colorful owner of head shops in Texas and fly-fishing lodges in Alaska and Chile won support for his campaign to save the Ridglea Theater from the wrecking ball.
Shults bought the theater in 2010, reportedly spending more than $1 million to acquire and remodel it. The next year, the Ridglea was placed on the National Register of Historic Places.
In 2013, Shults was honored for his preservation work by Historic Fort Worth Inc. That year, he bought the adjoining two-story building, which has a number of shops and offices.
Despite the raids, Shults’ Gas Pipe shops continue to operate because authorities were permitted to seize only items authorized by the court, said Kathy Colvin, spokeswoman for the U.S. attorney’s office in Dallas. Friday night, the Camp Bowie Gas Pipe was open for business.
This report includes material from the Star-Telegram archives.