Lodge Owners on Trial

The last week in September can be one of the finest of the year for flyfishers, but lodge owner Jerry Shults and his daughter Amy Herrig did not look to be enjoying it in 2018, as they spent the week in the Federal courthouse in Dallas facing 17 counts of drug trafficking, conspiracy, and money laundering. The trial is expected to run through much of Oct., with both Shults and Herrig facing potential life sentences.

Shults has owned Rapids Camp Lodge on Alaska’s Naknek River for more than 20 years. He also owns the Rio Salvaje Lodge in Chilean Patagonia, and in 2013, he and Herrig bought the three lodges of Deneki Outdoors—Alaska West, Andros South, and BC West on the Dean. These five lodges feature the Chinook of Alaska West, big bones of South Andros, and famed summer steelhead of the lower Dean. They are represented by some of the biggest and best booking agencies in the industry: Yellow Dog, Fly Water, Tailwaters, The Fly Shop, and Frontiers.

Rapids Camp Lodge on Alaska’s Naknek River Lodge Owners on Trial

The father-daughter team of Shults and Herrig were first indicted in June 2014, charged with manufacturing and distributing various forms of synthetic cannabinoids known as “K2” or “Spice” via their chain of 14 Gas Pipe smoke shops throughout Texas and New Mexico. The arrests followed a rash of synthetic marijuana overdoses in Dallas, and similar incidents across the country have increased in frequency ever since. In July of 2016, a “toxic batch” of K2 claimed at least 56 victims in Brooklyn, with some displaying “zombie-like” characteristics. And in August of this year, more than 100 people were treated in New Haven, Connecticut, where victims were found vomiting and collapsing on sidewalks. (A study in The New England Journal of Medicine, based on the Brooklyn case, found the drug to be 85 times the potency of THC.)

But there’s a big difference between the K2 in Brooklyn and New Haven vs. the K2 in Texas, especially financially. The buyers in NYC and Connecticut were mostly homeless, paying street dealers between $2 and $4 a packet. Shults and Herrig are charged with making their own K2, called “Plur,” and distributing it through their stores, where it was marketed as potpourri, herbal incense, or aroma therapy, stamped “Not for Human Consumption” and sold for $25-$35 a bag.

Andros South Lodge Bahamas Owners On Trial

Assistant U.S. Attorney Chad Meacham showed jurors a 2013 contract signed by Herrig and Lawrence Shahwan, a Gas Pipe supplier, outlining an agreement for Shahwan to supply Gas Pipe with 40,000 3-gram bags of K2 a week, for a total contract price of $4 million. According to Meacham, by June 2014, Gas Pipe was making up to $500,000 a week selling K2, and a month prior to the federal raids, more than $2 million in cash was picked up in armored trucks from Gas Pipe stores.

Yet the case isn’t a slam dunk for the Feds, who may have difficulty not only proving that Shults and Herrig knowingly sold a controlled substance, but that the chemicals used to produce it were even illegal at the time. At issue is a 1986 law called the Federal Analogue Act, which states that any “designer drug”—like K2—that is “substantially similar” to a Schedule I or II controlled substance, should be treated as if it were a controlled substance. And who decides whether a designer drug is or isn’t “substantially similar” to a controlled substance? Not the DEA. Not the FDA. The 12 jurors deliberating on this case.