Gas Pipe at center of federal synthetic marijuana bust

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by STAFF REPORTS

WFAA

Posted on June 6, 2014 at 11:47 PM

DALLAS — Federal authorities have broken up a major synthetic marijuana manufacturing and distribution ring.

At the center of the probe is The Gas Pipe, a popular head shop with locations across North Texas and in Austin.

DEA agents seized cars, a house, wall paintings, businesses and nearly $3 million from 23 bank accounts in a crackdown on the distribution of the substance commonly known as spice or K2.

The popularity of spice began in 2010. As its use has grown, so has the number of reports of it causing serious health problems, hallucinations and even death.

According to a federal forfeiture document, the operation was allegedly started by a drug trafficking group led by 38-year-old Lawrence Shahwan of Lewisville, who is facing federal marijuana charges.

Shahwan is the alleged kingpin behind the of mixing and packaging of the illegal substance known as spice. Federal Drug Enforcement Agency agents allege in a 58-page civil forfeiture complaint that Shahwan employed several of his family members - including his wife and mother - to help him create his very lucrative synthetic-drug empire.

According to the complaint, Shahwan had been mixing and packaging synthetic psychedelics since 2010. Late last year, he allegedly began having the chemicals shipped to his home in Lewisville. The materials were then delivered to Shahwan's import business, called Sacred Sun Botanicals, where the illegal drugs were blended and packaged.

Authorities claim that The Gas Pipe sold synthetic marijuana that was made by Sacred Sun Botanicals. The substance was branded under 21 different names, including Afghan Ice, Yolo, WTF and D’evil.

The documents allege Shahwan's organization would continuously change the chemical makeup of spice in an attempt to "stay one step ahead of law enforcement."

The DEA then claims employees of Shahwan would smoke the new substance to test the product.

"The Gas Pipe would then give the new batch to their 'space cadets' to sample (i.e. smoke) to determine its potency," the forfeiture document read.

While the packaging would label the product as a potpourri or incense, the purpose of the product was to get consumers high, according to the DEA.

Gas Pipe’s owner, Gerald “Jerry” Shults, is not accused of any crimes at this time, nor is his daughter, Amy Herrig. However, the documents say Herrig was given a tutorial on how to make spice at the start of this year. Witnesses shared pictures with News 8 of a SWAT team entering Herrig’s Highland Park home Wednesday afternoon.

At least 10 Gas Pipe locations are named into the government’s case. Wednesday, DEA agents seized more than $2.8 million from bank accounts under the names of Shahwan and Shults.

The U.S. Attorney's Office has also started the process of seizing real estate that they claim is connected to the case. Some of that property is owned by Shults, who also owns the Ridglea Theatre in Fort Worth, which the government says was bought with illegal funds.

Staff at the theatre declined to comment on Thursday afternoon. A manager at the attached Gas Pipe store, also owned by Shults, said "I know what's going on but can't talk about it." 

Both the theatre and the store remained open.

Also named in the federal complaint is Shahwan's wife, and his mother, Sandra, who talked with us this Thursday afternoon through a closed door at the Shahwan’s home in Lewisville.

“I'm not involved in this at all,” Mrs. Shahwan said. “That information is not supposed to be in there. That's a bunch of crap. Nobody here was dealing in spice, I don’t even know what that is.”

Shahwan was arrested on Feb. 8 at Dallas/Fort Worth International Airport for possession with the intent to distribute marijuana. He is being held on federal charges at the Lew Sterrett county jail in Dallas. He did not immediately respond to an interview request. His attorney, Douglas Mulder, could not be reached Thursday.

According to federal documents, Shults took over the manufacturing and distribution of spice after several members of Shahwan’s organization were arrested on unrelated charges and Sacred Sun Botanicals was unable to fulfill a contract with The Gas Pipe. In the documents, DEA officials claim The Gas Pipe began manufacturing spice in a room at the business’ Maple Avenue location.

Even though the government has begun forfeiture proceedings on several Gas Pipe locations, several visited by News 8 on Thursday were still in operation.

Federal prosecutors would not comment on the status of the investigation regarding Shults and the Gas Pipe organization as a whole.

“We’re very limited in what we can say,” said Kathy Colvin, spokesperson for the U.S. Attorney’s office in Dallas, which is supervising the investigation. “However, we can say the Gas Pipe has been in business since 1970 and sells a variety of products. These products range from tobacco, e-cigarettes, T-shirts, and novelty items. In executing search warrants, law enforcement is only permitted to seize what is specifically authorized by the court. Due to the fact these search warrants are sealed and this is an on-going investigation, we are unable to comment about the basis of the investigation and about any evidence discovered during the searches.”

News 8's David Schechter, Marjorie Owens, Jason Trahan, Todd Unger, Marie Saavedra, and Brett Shipp contributed to this story.

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