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Photo: Tosh Brown

American Greed, Inc.

A case of fake weed and flyfishing. By tom bie

Writer and historian David T. Courtwright calls them “limbic capitalists”—people or companies that target our limbic system, the part of our brains primarily responsible for emotion, especially as it relates to pleasure, motivation, and survival. Courtwright is author of The Age of Addiction: How Bad Habits Became Big Business. “Biological evolution shaped the limbic system, which is indispensable for life and reproduction,” writes Courtwright, in a recent story for Stat, a health-news website. “But cultural evolution and technological change created a trapdoor. The same neural pathways can be exploited—lethally —by entrepreneurs of brain-rewarding products that foster excessive consumption and addictive behavior.”

Rapids Camp Lodge

Photo: Jim Klug / Rapids Camp Lodge

 

Amy Herrig and her father, Jerry Shults, are, or were, limbic capitalists on two fronts: fake weed and flyfishing lodges. For much of the past decade, the Texas-based pair sold dangerous and widely misunderstood synthetic pot, a “designer drug,” while also operating several high-end flyfishing operations. One could argue which of these two activities might be more addicting, but nobody could argue which is safer and healthier.

In December 2014, I received a forwarded email from then-senior editor Geoff Mueller. The email was from Herrig, who, along with Shults, owned reputable operations in Alaska, B.C., Chile, and The Bahamas. They also owned a chain of 14 Gas Pipe head shops in Texas and New Mexico, several of which had been raided six months earlier by DEA agents, resulting in the seizure of many pounds of synthetic cannabinoids, commonly called “K2” or “Spice.” Agents also seized assets they claimed Shults, Herrig, and/or their associates had purchased with illicit drug money, including luxury cars, several homes, more than $16 million in cash, as well as boats and planes from Rapids Camp Lodge, on Bristol Bay’s Naknek River, near King Salmon, Alaska.

Though Shults and Herrig had yet to be charged, Mueller wrote a story about the raid for our Winter 2014 issue, believing, as I did, that our readers might find it newsworthy. Herrig didn’t agree. Her email explained that Mueller’s article was way off-base and out-of-line because he’d missed the real story, which was that Herrig and her father were simply victims of government overreach. “Rather than running a ‘juicy story’ attempting to paint our actions in a negative light, The Drake missed out on a true journalistic opportunity to inform the public of a major issue of civil forfeiture happening in this country,” Herrig wrote. She ended her email: “Perhaps The Drake will want to retract at some point or produce a more accurate follow up so as to be inline with what other, well respected journalists have to say about our situation.”

Here is Amy Herrig’s current “situation”: On October 8, in Dallas, she and her father were each sentenced to three years in federal prison for conspiracy to defraud the United States, after mislabeling millions of dollars in dangerous synthetic cannabinoids sold in their Gas Pipe shops. (Most were labeled “herbal incense.”) After a June 2014 Federal raid and civil forfeiture, the pair were indicted, along with 30 other defendants, in May 2015, in one of the largest synthetic drug busts in the country. Most defendants faced just the single count of conspiracy to defraud. But Shults and Herrig were charged with a number of additional offenses, including money laundering and distribution of a controlled substance. They were acquitted in September 2018 of the more serious charges, which could have sent them to prison for life, and were convicted of only the mislabeling. Their sentencing in October 2019 marked the end of a five-year battle between the defendants and the DEA.

Spice, a type of synthetic Pot

Herrig was right about one thing: Their case does offer an opportunity to inform the public of a major issue happening in this country. The proliferation of synthetic drugs is a growing national crisis. Two recent examples: In March and April 2018, more than 100 people in Wisconsin, Illinois, and Indiana went to emergency rooms—34 to the same Illinois hospital—with bleeding stomachs after smoking fake pot laced with rat poison. Why would anyone put rat poison—specifically, the pesticide brodifacoum—into something that humans smoke? Because it’s cheap, and is supposed to make the high last longer. By May, more than 200 people in 10 states had suffered internal bleeding after smoking Spice. Five of them died.

And in fall 2019, health officials reported hundreds of mysterious vaping illnesses across the U.S. and Canada, several of them fatal. In response, the Associated Press commissioned lab tests on 30 vape and edible products sold as CBD (short for cannabidiol, the non-THC, over-hyped extract of cannabis, and a trendy purchase among flyfisher types). Ten of the 30 products contained some form of synthetic weed as a cheap replacement for CBD, and one, in Mississippi, contained the powerful opioid, fentanyl.

A deeper look at the case and trial of Herrig and Shults reveals many aspects of the current crisis—some promising, some disturbing. But one thing is clear: The convoluted laws governing synthetic drugs in the U.S. are ill-equipped to deal with the problem. The Gas Pipe, Inc. trial illustrates not only why prosecutors have often had difficulty achieving guilty verdicts in these cases, but also why many in the medical, legal, law-enforcement, and flyfishing communities feel that the father-daughter duo got off far too easy.

Herrig and Shults made many millions by selling synthetic cannabinoids commonly known as “fake pot.” But the name is misleading, as the ingredients—human-made chemicals—have nothing to do with marijuana. It is called fake pot for two reasons. First, because the chemicals are sprayed onto greenish plant material to make it look like pot. And secondly, because the ingredients affect the same “cannabinoid receptors” in our brain—and thus mimic some of the same effects—as THC, the active ingredient in marijuana. The biggest difference is that synthetic weed can be more than 100 times as strong.

Real marijuana has a potency-range that can be predicted within a narrow, relatively safe span. Not so with synthetics, where it can be nearly impossible to know the chemical make-up of what you’re smoking. And because the compounds aren’t always applied evenly, ingredients may be more heavily concentrated in some areas, creating “hot spots” where the potency of one batch can be many times stronger than the next.

 

“You have no idea what you’re actually consuming,” said David Leff, a former investigator and 30-year Philadelphia-based narcotics consultant, in an interview with The Daily Beast. “These are substances that have never been tested on humans.”

 

They were supposed to be. Starting in the mid-1980s, John W. Huffman, a chemistry professor at Clemson University, led a team of researchers trying to create medicines that could trigger the cannabinoid receptor, which had only recently been discovered in the human brain. The goal was to use this information to help reduce pain in cancer patients and others receiving chemo treatments. Huffman and his team conducted their research for 20 years, creating more than 300 synthetic cannabinoid compounds. The project eventually ended because researchers found it too difficult to separate the psychoactive responses they wanted (say, the buzz we might get from caffeine) from the responses they didn’t want (say, the buzz
we might get from heroin.)

Posh Spice Fake Pot

Because much of Huffman’s research had been publicly funded (ironically, by the National Institute on Drug Abuse), many of his findings were published, including the cannabinoid-compound recipes. After sitting dormant for a decade, some opportunistic chemists discovered his old formulas. In fall of 2008, a man in Germany got busted selling a new street drug called Spice. Authorities had it tested by forensic scientists and discovered that it contained one of Huffman’s compounds, identified by his initials: JWH-018; the 18th synthetic he had created.

The following month, December 2008, the U.S. had its first reported case of synthetic cannabinoids being sprayed onto plant material, when U.S. Customs and Border Protection seized a shipment in Dayton, Ohio that also contained JWH-018. By mid-2009, JWH-018 was being sold as an “herbal mixture” across the Internet, as it and similar compounds were being mass-produced in Asia and sold in bulk to U.S. buyers, who in turn supplied it to convenience stores and head shops like Gas Pipe.

To their credit, neither Herrig nor Shults went looking for a Spice supplier. But a supplier came looking for them; a man named Lawrence Shahwan—“a master” at getting ingredients and packaging for Gas Pipe’s products, according to Herrig’s description of him in No More Chasing Bullets, her recently released memoir detailing many of her legal troubles.

Shahwan began by selling his Spice products to some of Gas Pipe’s competitors. He’d then send someone into a Gas Pipe to ask for his products, which he knew they didn’t have, thus encouraging the retail chain to start carrying them. The pressure worked, with Shults and Herrig eventually adding Shahwan’s synthetic cannabinoid products to their stores.

Time Magazine Fake Pot Spice Cover

All of this was legal. Prior to 2010, there wasn’t a single law at the state or federal level pertaining to synthetic cannabinoids. Back then, it was over-prescribed painkillers like Vicodin and Oxycontin causing the majority of deadly overdoses. In 2009, the Office of National Drug Control Policy had identified only two synthetic cannabinoids. By 2012, they’d identified more than 50. So many new types of synthetic drugs were entering the country that in 2010 the DEA created a special category for them: “New Psychoactive Substances” (NPS)—unregulated, mind-altering substances intended to produce the same effects as illegal drugs.

“The novelty of New Psychoactive Substances, their ambiguous legal status, ability to evade toxicological tests, swift adaptation to legal restrictions, global Internet marketing, and scant public knowledge of their adverse effects are among the key drivers of this twenty-first century phenomenon,” wrote Harvard professor Dr. Bertha Madras, for the National Center for Biotechnology Information. “Ultimately, research-guided prevention education will fortify societies against this tidal wave.”

Perhaps. But until that happens, the tidal wave increasingly lands in the emergency room. In 2010, there were 11,406 visits to emergency rooms in the U.S. to treat the effects of synthetic cannabinoids. In 2011, that number more than doubled, to 28,531. Spice-based ER visits have only grown since. (NYC alone had more than 6,000 in a year-and-a-half, from January 2015 through July 2016.) And as retail busts like the Gas Pipe have moved distribution from convenience stores and head shops to street dealers, many overdosing users are even less equipped to handle the effects. Patients typically exhibit one of two extremes: either super sluggish, like with an opioid overdose—lethargic, confused, barely conscious. Or the opposite: highly agitated, aggressive, violent, similar to overdosing on PCP or meth. In either case, there isn’t much ER staff can do, as there’s no specific antidote for the cannabinoid receptor, and because hospital drug screens can’t often identify synthetic compounds.

Paige Nichols is an ER nurse in Fort Collins, Colorado. “It doesn’t even matter so much what they took, because we just manage whatever is threatening their health or their life—or ours,” Nichols says.

 

“We commonly get young folks who are all fucked up, but our drug screen comes back negative because we just can’t keep up or manage to test for all the sorts of shit that’s out there.”

 

Between 2009 and 2016, 106 countries and territories reported 739 New Psychoactive Substances to the United Nations Office on Drugs and Crime. During the same period, overdose rates in the U.S. increased by almost 80 percent, and synthetic opioids like fentanyl are increasingly the cause. In 2010, less than 15 percent of U.S. opioid deaths involved fentanyl. By 2018 the percentage had jumped to 60, and by the start of 2020 more than half a million Americans had died of drug overdoses in a decade, passing both gun violence and car crashes to become the leading cause of injury-related deaths in the country.

Fall of 2013 was an important time for Herrig and Shults. Their decision to start selling Shahwan’s synthetic cannabinoid products had turned out to be a great one, financially. It sold so well, in fact, and at such a high profit, that in September 2013, Herrig signed an exclusive $4 million contract making Gas Pipe Shahwan’s only customer. The contract required him to deliver half a million three-gram packages of Spice to Gas Pipe for $8 a package, which they would subsequently sell for $24–$32 through their stores. The distribution schedule called for Shahwan to deliver 40,000 three-gram packages, every Tuesday, to Gas Pipe’s warehouse at 5800 Maple Avenue, in Dallas.

Shahwan’s products were generating a large amount of cash for Gas Pipe stores, and several properties had been purchased by Herrig and/or Shults in 2013, including a fishing getaway on Oregon’s Clackamas River, and an office building in Fort Worth, both bought in April for a combined $2.5 million. But signing the exclusivity contract with Shahwan brought in even more money, leading to a couple of significant purchases in November, 2013.

Most or all of the individual Gas Pipe stores had their own checking accounts, which were used to pay the basic operating expenses for each particular store. At the end of each day, any excess funds, or profit, would be deposited or transferred into one of two UBS Financial Services accounts controlled by Shults and Herrig. According to the DEA’s Forfeiture Complaint, “The funds deposited in these accounts and transferred elsewhere have been directly traced to the proceeds derived from mail/wire fraud, the manufacturing/distribution of Schedule I controlled substances, and/or their analogues, and money laundering.”

 

Shults and Herrig owned Andros South Lodge in the Bahamas.

Photo: Tosh Brown

 

On November 12, Herrig transferred more than $1.3 million from one of the USB accounts to Independence Title in Dallas, as payment for her new 4-bedroom, 5-bath, 6,200-square-foot Highland Park estate. But the most interesting November 2013 property purchase, at least for those in the flyfishing world, had occurred five days earlier, when Shults, Herrig, and her husband, Dan Herrig, bought the three fishing operations of Deneki Outdoors: Alaska West on the Kanektok River; Andros South in the Bahamas; and BC West, a steelhead and chinook lodge on British Columbia’s legendary Dean.

The trio of businesses, formerly owned by Andrew Bennett, was added to the two Shults and Herrig already owned: Rapids Camp Lodge in Alaska, and Rio Salvaje in Chile, making for an impressive flyfishing portfolio. But while Shults was proudly adding to his family’s collection of lodges, and though Herrig had acquired a palatial home in one of the most prestigious zip codes in Dallas, the most significant purchase that month was made by neither of them.

On November 22, 2013, just two weeks after the Deneki deal closed, undercover officers made their first synthetic cannabinoid purchase from a Gas Pipe store: a package of “Assassin Revolution” from the Gas Pipe location in Arlington. The package contained the synthetic cannabinoid AB-Fubinaca. Less than a month later, on Dec. 16, and Dec. 18, agents went to three other Gas Pipe locations, including two in Austin, and bought six additional brands of Spice. Five of the six contained AB-Fubinaca. One problem for the Feds: AB-Fubinaca wasn’t a controlled substance.

 

Much of the time the DEA invested in making a case against Herrig and Shults was spent playing catch-up.

 

Much of the time the DEA invested in making a case against Herrig and Shults was spent playing catch-up. The Controlled Substances Act (CSA) is the law responsible for deciding which drugs in the U.S. need to be regulated, or “controlled.” Substances fall into one of five categories or “schedules” based on three different factors: 1) Potential for abuse; 2) Whether it has an existing, accepted medical use; 3) Safety and potential for addiction. The lower the number, the more dangerous and regulated the drug. (Schedule I = heroin; Schedule V = cough syrup.) Substances can be added or removed only by the DEA or the Food and Drug Administration, but the process can be initiated by anyone, from a big drug manufacturer to a private citizen, with approval typically taking many bureaucratic months.

Sensing the pace of the DEA, Shults and Herrig understood that it wouldn’t be too difficult to stay a step ahead of the sluggish Feds. But on Dec. 4, 2013, the Feds caught a lucky break in the case. A man driving a Ford F-150 was pulled over by a deputy sheriff for a routine traffic stop in Denton County, just north of Dallas. The deputy asked to search the truck, permission was granted, and the deputy found traces of pot and a small amount of hashish oil. This soon led authorities to a marijuana-growing operation in a metal barn near the town of Whitesboro, a boondock North Texas outpost 20 miles from the Oklahoma border. A couple of weed-growers in the barn were arrested, and both worked for Shahwan—who was also the registered owner of the F-150. The DEA soon learned that Shahwan not only sold real weed, but also the synthetic version, and quickly connected the dots between him and Gas Pipe.

 

Jerry Shults and Amy Herrig at the Dallas Federal Courthouse

Amy Herrig and Jerry Shults, arriving at the Federal Courthouse in Dallas, Sept 26, 2018 / Photo: Louis DeLuca / The Dallas Morning News

 

Shahwan immediately raised flags with the Feds, partly because of payroll. In the 16 months between August 2012 and December 2013, Sandra Shahwan, Lawrence’s mom, was paid nearly $600,000. And in less than two years, Rakan Shahwan, Lawrence’s brother, was paid more than $870,000, as a bagger.

With mounting legal and financial troubles, Shahwan was unable to fulfill his contractual obligations to Gas Pipe, leaving Herrig and Shults without a Spice supplier. Their solution? Make it themselves. One of Shahwan’s former employees was  paid $50,000 to give a hands-on tutorial in making synthetic weed. But manufacturing high-volume Spice requires a lot of equipment, storage, and workspace. Shahwan had already made several deliveries of supplies to the Gas Pipe’s Maple Avenue warehouse, including 3,000 to 4,000 pounds of organic plant material that the synthetic cannabinoids would be sprayed onto. But where would everything fit? A second solution: As December 2013 turned into January 2014, the 5800 Maple Avenue Gas Pipe warehouse was remodeled, adding a room “specifically designed to manufacture spice,” according to the DEA. When the room was completed, the lesson was scheduled. Three Gas Pipe representatives received the Spice-making tutorial that day, according to the DEA’s Complaint for Forfeiture: warehouse manager/buyer Ryan Yarbro, general manager Rolando Rojas, and Gas Pipe owner Amy Herrig.

The CSA contains two important statutes that relate to this case. The first applies to “drug analogues,” which are defined in part as any substance with “a chemical structure substantially similar to that of a controlled substance in Schedules I or II.” The statute is aimed at preventing just the sort of moves that were taking place at Gas Pipe: Taking product and tweaking the recipe just slightly by swapping a banned ingredient with a similar ingredient that isn’t banned. The challenge for DEA attorneys when it comes to prosecution is that proving “substantially similar” chemical structure beyond a reasonable doubt is a very difficult task, with each side’s expert witnesses spewing incomprehensible organic chemistry to a bewildered jury. (As the defense showed, even the DEA can’t agree on it.)

This difficulty played a major role in Herrig and Shults being acquitted of the more serious drug charges. (It didn’t help them in their subsequent civil case, however, which cost them nearly $14 million.) To those unfamiliar with synthetic cannabinoid cases, “lying on a label” or “defrauding the FDA” do not sound like serious offenses; they sound like what someone might get charged for selling carrot juice and labeling it orange juice. But there’s a reason the Feds push the mislabeling charge. Similar to Capone getting sentenced for tax evasion instead of extortion, mislabeling is simply a far easier crime to prove.

The strength of Federal defrauding law is due in large part to the work of Minnesota Senator and current Democratic Presidential candidate Amy Klobuchar, who first introduced the Synthetic Abuse and Labeling of Toxic Substances (SALTS) Act in 2013, aimed at making it easier to prosecute the sale and distribution of analogue drugs by focussing on false labeling. The most updated version, co-sponsored by South Carolina’s Republican Senator Lindsey Graham, was signed by President Trump in October, 2018, a month after the Herrig/Shults trial.

The second CSA statute allows the DEA to make emergency listings if the agency feels that public health is in danger. By winter 2011, Spice was so prevalent that on March 1, the DEA used its emergency scheduling authority to place five of the most common synthetic cannabinoids in Schedule 1 (including JWH-018). As each scary new substance was discovered over the next year and a half, it would be added to the government’s banned list. By July 9, 2012, when President Obama signed the Synthetic Drug Abuse Prevention Act, a total of 26 new synthetic drugs were listed. But other ones kept appearing, with each new generation seemingly stronger than the last. In fall 2013, a batch of synthetic cannabinoids in Denver sent 76 users to emergency rooms, with symptoms like delusions and erratic heart rate. Seven of those 76 went to intensive care units.

These “mass overdosing” incidents were becoming far too common in cities around the country, including Dallas, where 40 people were hospitalized in less than 48 hours in early May 2014, all from overdoses attributed to Spice. This was putting heavy pressure on law enforcement, both local and Federal. On February 10, 2014, four new substances were added to the DEA’s banned list, one of which was AB-Fubinaca. So the Dallas DEA agents went shopping again. On March 4, Federal officers purchased the same Assassin Revolution brand from the same Arlington Gas Pipe where they’d made their first purchase almost three months earlier. Only this time, AB-Fubinaca was a Schedule 1 controlled substance.

Which raises a question about an assertion Herrig makes in her new book. One of her more audacious claims comes in a passage near the end, as she’s about to be sentenced. Chief District Judge Barbara Lynn lets Herrig know that she is leaning toward the upward end of the sentencing guidelines, “due to the potential risk and danger of the products we had sold,” Herrig writes, then adds, in parenthesis: (“even though nobody had ever been physically harmed by anything we had sold…”)

Maybe this sentiment is just something Herrig tells herself, as a way to pretend that she and her father didn’t really sell $40 million worth of questionable chemicals to Gas Pipe customers. Regardless, it is a highly suspect claim, especially considering the dark history of AB-Fubinaca, which made national news in mid-August 2018, as the synthetic cannabinoid responsible for hospitalizing more than 90 people over a two-day period in New Haven, Connecticut, in a park across the street from Yale University. Two years earlier, its closely related sister compound, AMB-Fubinaca, was behind America’s second-most famous mass-overdosing episode: the outbreak on July 12, 2016, that turned a block of Brooklyn’s Bed-Stuy neighborhood into a zombieland and sent 33 people to the hospital.

Spice Fake Pot DEA Photo

Herrig writes that Gas Pipe selling AB-Fubinaca was all just a logistical mix-up. Described in her book as “the AB-Fubinaca snafu,” her explanation is essentially that the illegal drug was accidentally ordered, accidentally shipped, accidentally received, accidentally put on shelves, and accidentally sold to customers.

The DEA agents, she writes, “just happened to come into every one of our stores to make their “controlled buys” during the very ten-day period we had the illegal product on the shelves.” This is intended to make it sound as if Gas Pipe only sold spice containing AB-Fubinaca for a total of ten days. But the Feds purchased the same thing three months earlier, and it’s unclear how long the product was being sold prior to that. What Herrig was trying to say is that AB-Fubinaca had been illegal for only ten days. But the product was just as dangerous before it was banned. Herrig and Shults chose to sell it anyway.

As Herrig points out in her book, “There are legal laws and there are moral laws, and I broke a moral law without a doubt.” By Herrig’s own math, somewhere around 90,000 packages of Spice were likely sold just between the first and last DEA undercover purchase, with a number of those sales including AB-Fubinaca. To say that “nobody had ever been physically harmed by anything we had sold” is to ignore the growing database of information showing the damage these substances can inflict. And because young people are typically more prone to experimentation with drugs, this is the age group that was most at risk.

Pinning a death exclusively on a particular synthetic cannabinoid is difficult, partly because much is still unknown about how they affect the body, and partly because standard autopsies won’t pick up the substances. “What is known is that young people, including adolescents, are having heart attacks,” said Marilyn Huestis, former chief of chemistry at the National Institute on Drug Abuse, to Today.com. “There have been kidney failures and deaths.” Most types of synthetic cannabinoids aren’t detected in autopsies for the same reason they aren’t detected in urine tests or by drug-sniffing dogs: because tests detect only what they’ve been trained or programmed to detect. However, this, too, is changing.

Last summer, the National Center for Biotechnology Information published a report: Teens and Spice: A Review of Adolescent Fatalities Associated with Synthetic Cannabinoids. The summary:

 

“Synthetic cannabinoids (SCs) are commonly abused by adolescents, but standard adolescent postmortem toxicology does not include routine SC analysis, and thus, the true burden of fatalities related to SCs is unknown. However, a review of eight adolescent SC-associated fatalities revealed that five of eight cases had no other discernible cause of death.”

 

Herrig and Schults were charged with selling synthetic weed (cannabinoids), but there is a similar category for synthetic stimulants (cathinones), which mimic the effects of drugs like cocaine, meth, or ecstasy/molly. Historically marketed as “bath salts,” these should not be confused with the Eucalyptus Epsom salts found at Target. Cathinones—from “khat” the African plant—are called bath salts because that’s how they’re advertised, with manufacturers using the same illegal marketing that sent Herrig and Shults to prison: lying on the label. According to DEA documents, Herrig and Shults had phrases like “100% synthetic cannabinoid free” or “not for human consumption” printed on their products in order to “defraud the Food and Drug Administration and the general public.” From the DEA’s 2013 Civil Forfeiture filing: “The misleading markings on the packages are an attempt to prevent the product from being classified under food/drug definitions, and thus subject to the Food and Drug Administration (FDA) testing and approval process.”

That was one reason. But disclaimers on the package, along with popular product identifiers such as “herbal incense” and “potpourri,” also served as the wink-wink message to buyers that whatever was inside would get them high. The labeling wasn’t a warning, and it wasn’t just a clever misdirect for the FDA; it was a secret language. It was code. And nobody knew this better than Herrig.

 

“Our customers weren’t defrauded,” she writes in her book. “They knew exactly what they were buying and why.” Unfortunately for Herrig, it wasn’t her customers that were charging her with defrauding the public. It was the DEA.

 

I attended the jury selection and beginning of the trial at the Federal Courthouse in Dallas, in September 2018, and returned this past fall for their sentencing. In both instances, Herrig was unhappy to see me, and she shared her feelings in a very public manner in the hallway outside the courtroom, making it clear that she didn’t want any more news of their case finding its way to current or potential lodge customers, especially from Rapids Camp, where guests now pay $11,500 a week.

Drake Magazine Rapids Camp Lodge Alaska

Photo: Jim Klug

Which is odd, considering that Herrig and her father both claim to no longer own the properties. “None of the lodges are owned by us anymore,” Herrig told me at the sentencing. Technically, this is true: Herrig filed paperwork with the State of Alaska on Nov. 8, 2018, shortly after her conviction, removing her name from the list of officials for Rapids Camp Lodge, and seemingly leaving her father with 100 percent ownership and control. Her father followed suit four months later, removing his name on March 13, 2019, and transferring 100 percent ownership to “Rapids Camp Lodge Irrevocable Trust.”

But if Shults and Herrig  were no longer acting in owner/operator capacities for the lodges by the time of the sentencing, then why was Herrig negotiating the sale of one of them? (Jeff and Katherine Hickman, owners of Kimsquit Bay Lodge, also on the Dean, purchased BC West in early November, 2019.)

Shults had his attorney, George Milner, send me a letter on October 11: “The two companies mentioned at the hearing, Gas Pipe, Inc. and Amy Lynn, Inc., are not in any way connected to Rapids Camp Lodge. Further, Mr. Shults no longer owns RCL.”

 

Deneki Outdoors

I’m not sure what “in any way connected” means to Mr. Milner, but as Herrig points out in her book, Mr. Shults was the sole owner of Gas Pipe, Inc. and Amy Lynn, Inc. And according to the State of Alaska, Mr. Shults was the sole owner of Rapids Camp Lodge, until transferring ownership to the trust in March.

Placing assets in an irrevocable trust has many nuances and at least two well-known benefits: 1) Once property is transferred, it is safe from legal judgments. 2) As long as there is no probate, the terms of the trust never become a matter of public record.

Only one official is shown for Rapids Camp Lodge Irrevocable Trust: Dan Herrig, Amy’s husband. He is listed as the Secretary, Treasurer, Director, and President, but not as a trustee. Entity mailing address: 5800 Maple Avenue, Dallas, Texas.

When the time came to learn her punishment, Herrig stood before District Judge Lynn, apologizing for her misdeeds before requesting leniency. Then Judge Lynn spoke: “This case is a concern to the community and to me, personally,” she said. “It is a serious offense, and I’m going to treat it as such. You ran a business selling harmful products to people who should have known better but didn’t. You were focused on making a lot of money, at the expense of others. I saw nothing that showed you cared about the health of your customer. You may not have known what was in the drug, but you knew that it wasn’t what you said it was. And this is your day of reckoning for that.”

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Tom Bie is the founder, editor, and publisher of The Drake. He started the magazine in 1998 as an annual newsprint publication based in Jackson Hole, Wyoming. He then moved it to Steamboat, Colorado (1999), Boulder, Colorado (2001), and San Clemente, California (2004), as he took jobs as managing editor at Paddler, Senior Editor at Skiing, and Editor-in-Chief at Powder, respectively. Tom and The Drake are now both based in Denver, Colorado, where The Drake is finally all grows up(Swingers, 1996) to a quarterly magazine.

12 Comments

  1. I have owned what I did and what I did not do and I have spoken publicly about it numerous times. As your article states, we were acquitted of most of the charges, which means yes, it was a government overreach (a 17 count indictment resulted in a conviction of one account, which is pending appeal). I am not proud of my past actions but have learned a lot and made many efforts to change and move forward in life in a positive way. I made mistakes without a doubt and did things I wish I hadn’t, but not everything we were accused of doing. If readers want to read my entire story (and thank you for providing the title of my book, which is No More Dodging Bullets) I encourage them to do so to get the full story and not just “cherry picked” quotes. Also, Rapids Camp and all Deneki properties were not part of the trial or final criminal charges. Thank you Tom for you one sided story. I am not in prison and I am an open book to anyone at this point. The Deneki family of lodges is a strong, reputable operation that has grown better and stronger in the most challenging of times and we appreciate all the people who have stood by our side and grown with us, including our employees, clients and agents.

    • Amy Herrig could have used this space to write anything to anybody. The fact that she chose to peddle her “book” is a surprise to no one. Spoiler alert—here’s what you won’t read in her book: A single word of apology or remorse toward any of the thousands of Gas Pipe customers who bought her dangerous products.

      • Really? I’m beginning to wonder if you actually read my book or listened to my speech at the sentencing hearing you attended. Careful what you write about people when there’s a written record to confirm the truth.

  2. Wow! I was a subscriber to Deneki Outdoors and enjoyed their articles. I had no idea the owners were such dirtbags. And sadly, through their shell game, they still are by using her husband as the new “owner”. What a blight on our fly-fishing community. I wonder how much the guides and managers knew about their owners and their behavior. Thanks for shedding some light on this subject. Rapids Camp Lodge has caused some serious overcrowding on the Naknek River in particular. It’s almost become combat fishing on that river now. I wish they had lost the lodges along with their other possesions when the DEA cracked down on them.

    • I’ve written an entire book so there are no secrets from anyone. My book reports the truth and gives a very candid and honest account of what happened, even when it’s not flattering to me, but sadly articles such as this report half truths and distorted facts. I’ve never kept anything a secret from anyone. It was a very public legal battle fought over five years and everyone knew about it. We were acquitted fairly by a jury of our peers of all but one count and our staff, friends and family were happy for us and supportive through the entire ordeal because they all know who we are and understand that sometimes good people make bad choices. Once again, not proud of my past actions but have chosen to learn from them and move forward in a different, more positive direction in life and use my mistakes to help others. We can’t go back, we can only go forward. And by the way, Rapids Camp Lodge has been on the Naknek River for 25 years, pretty much longer than any other lodge currently on the river. That is not what has caused the overcrowding.

      • hey Amy, people like you are absolute scum. It’s so pathetic seeing you posting here in the comments section trying to defend your reputation instead of just keeping quiet and letting your actions show that you aren’t the absolute dirtbag that you appear in public. Go dunk your head in the river and don’t ever come back up…

  3. I greatly enjoyed the depth and level of reporting in this article. My hat is off to the The Drake for tackling a topic outside of the standard fly fishing mag box. People like Herrig/Shults need to be held accountable and the public deserves to know about their actions and greed. Good work.

  4. Capitalists can always make excuses for their greed. I applaud the diligence of Tom Bie, and for the forthrightness of this article. I know most of the readers of this and other fly fishing magazines tend to support the winner-take-all attitude of political discussion, but controlling deviants like Ms. Herrig and her mercenaries can only fall on the shoulders of properly armed government agencies. Without goverment, as flawed as it will always be, we have no society.

  5. I worked for Jerry and Amy at Rapids Camp Lodge for the 2012 season. It was the only season I worked there and I had some incredible experiences while working for them. They are good people but this illustrates the fact that one cannot accelerate greed without mass producing their avarices. Hopefully this is a lesson to everyone that all that glitters is not gold, half the story never gets told. Thanks Tom for the excellent and honest coverage of this situation.

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