Jerry Shults and his daughter, Amy Herrig, were recently acquitted of drug trafficking charges, but the government is not done with them yet: It wants to take much of their money and property using controversial federal forfeiture laws.

The father and daughter team behind a vast retail network of synthetic marijuana products called spice is scheduled to go on trial for a second time in Dallas in March. This go around, they will be trying to stop the government from taking their considerable fortune, including an exotic fishing camp, airplanes and bank accounts worth millions.

The government wasted no time in pushing forward with its separate civil forfeiture lawsuit against Shults and Herrig following the duo's October acquittal on the more serious drug trafficking charges. The two are awaiting sentencing after being convicted of conspiracy to defraud the U.S. for misbranding synthetic marijuana sold in their stores as potpourri, incense and bath salts.

The Gas Pipe defendants tried unsuccessfully to obtain the release of their property following the criminal case. The allegations in the 88-page forfeiture complaint are similar to what the couple was accused of in the criminal indictment.

"Despite the government's attempts to downplay or ignore them, the acquittals on all of the forfeiture-related charges in the criminal case ... provide a compelling basis for granting the requested relief," the Gas Pipe attorneys said in a Nov. 7 court filing.

Amy Herrig and her father, Jerry Shults, of the Gas Pipe arrive at the Earle Cabell federal courthouse, downtown Dallas, on Wednesday, Sept. 26, 2018. (Louis DeLuca / Staff Photographer)

George R. Milner III, an attorney for the Gas Pipe, told The Dallas Morning News on Friday that while the law allows the government to "pursue a civil forfeiture predicated upon the precise conduct previously acquitted in a criminal trial, it is not only offensive, but abusive."

"The government should respect the jury's verdict just as citizens in this country do everyday," Milner said. "Now, in the face of nine 'not guilty' verdicts, the government seeks to forfeit virtually every dime my client has earned in almost 50 years doing business. This is unacceptable and should not be permitted."

That, however, will be up to Congress to fix, he added.

A different federal jury in Dallas will likely be convened for the forfeiture trial. And government attorneys will once again argue that Shults and his daughter illegally profited from their leafy products despite knowing they were dangerous, having been laced with chemicals in unregulated Chinese labs.

But government lawyers will have to meet a lower burden of proof. Gone is reasonable doubt; it's just preponderance of the evidence.

Civil libertarians have long criticized asset forfeiture laws as abusive and unconstitutional. They point out that overzealous prosecutors can take a person's money and property even if the owner was never charged or convicted of a crime. Even conservatives have joined in on the criticism — over concerns about due process and private property rights.

Dan Alban, senior attorney for the Institute for Justice in Virginia that opposes current forfeiture laws, said such cases "starve" people of funds they might need to hire attorneys or to live on during the case. That puts pressure on them to accept plea deals, he said.

"It gives the government a lot of leverage," said Alban.

If defendants are lucky enough have enough money to fight the forfeiture, they face the prospect of incriminating themselves. That is the conundrum Shults and Herrig now face: invoke their Fifth Amendment right to remain silent and very likely lose their fortune at trial; or defend themselves and potentially face additional criminal liability.

Fishing expedition?

The government in early December began seeking documents and other information from the Gas Pipe and its owners in the forfeiture case.

Shults and Herrig have asked U.S. District Judge Barbara Lynn to delay that process while they are awaiting sentencing.

Shults and his daughter were convicted in October of less serious misbranding charges for falsely claiming their spice products were "not for human consumption" and for marketing them as potpourri, incense and bath salts. The charge — conspiracy to defraud the U.S. — carries a maximum penalty of five years in prison. They are scheduled to be sentenced in April.

Lynn has not yet ruled on the matter.

Gas Pipe lawyers called the criminal case "nothing more than a misbranding case that the government dressed up as a drug cartel prosecution in an effort to deprive the Claimants of their legitimate untainted property."

Undercover officers purchased synthetic marijuana several times at The Gas Pipe, at 1407 N. Collins St. in Arlington, several times starting in November 2013. This photo was taken Thursday, June 6,2014 in Fort Worth. (David Woo / Staff Photographer)

Assistant U.S. Attorney Joseph A. Magliolo wrote in October that the government "intends to pursue civil forfeiture of the property on all available theories, including mail and wire fraud, and concealment money laundering, notwithstanding the disposition of the separate but related criminal case."

Prosecutors dropped mail and wire fraud charges against the Gas Pipe defendants shortly before the criminal trial began last year.

Milner and two other Gas Pipe defense attorneys, Steven Kessler and Michael Mowla, noted in a December filing that the government already has about 13 terabytes of Gas Pipe documents and "hours of trial testimony from numerous witnesses" from the criminal case.

Their clients are concerned, they wrote, that any attempts to acquire more information may constitute a "fishing expedition by the government in its hope to find a 'new crime.'"

Assistant U.S. Attorney Chad Meacham, one of the prosecutors in the criminal trial, wrote in a court filing that Shults and Herrig are free to invoke their Fifth Amendment rights in the forfeiture case and "the jury will be free to draw whatever inference from their silence that it sees fit."

In a criminal case, jurors may not hold that against a defendant.

Alban, of the Institute for Justice, said that is one of the protections afforded to criminal defendants that aren't available in forfeiture cases. "It [forfeiture law] allows people who have not been convicted of a crime to be penalized like criminals," he said.

Alban said forfeiture law also creates a "perverse incentive" for law enforcement to seize property.

Milner said his clients, Shults and Herrig, have both testified in depositions in the forfeiture case and do not intend to assert their Fifth Amendment privilege.

The U.S. attorney's office in Dallas declined to comment on the Gas Pipe forfeiture case, but the Justice Department has vigorously defended civil asset forfeiture.

Deputy Attorney General Rod Rosenstein said in a 2017 piece for The Wall Street Journal that there are "multiple levels of judicial protection, as well as administrative safeguards" in such cases.

Before police can seize property, a judge must agree that there is probable cause that a crime was committed, he wrote. And when someone claims ownership, the government must present enough evidence in court to show the property was the proceeds of a crime, Rosenstein said.

Assets in limbo

The battle over the Gas Pipe fortune began in 2014 when federal agents raided its stores and seized or placed liens on numerous assets belonging to the company, its owners and its associates. The raids followed a series of undercover buys at the smoke shops.

Among Shults' holdings is the historic Ridglea Theater in Fort Worth that he preserved as a personal project and for which he obtained protective status. It is listed on the National Register of Historic Places. Jerre Tracy, executive director of Historic Fort Worth, said the theater cannot be significantly altered even if it's sold to a new owner.

Other assets that were seized, slapped with liens or otherwise restrained include an Alaskan adventure fishing camp, at least nine vehicles, art, jewelry, nearly 20 real estate properties, four aircraft, and a fishing boat named the "Sea Witch." Numerous Gas Pipe-related bank accounts have been frozen since 2014.

Jerry Shults (Facebook)

Shults has claimed in court documents that the government significantly damaged his five airplanes and fishing boat by leaving them exposed to the elements for years or improperly storing and maintaining them. Lynn ruled that he is free to sue the government separately for damages.

He has also sought the return of his property while the forfeiture case is pending.

"The government's insistence on continuing the restraint of claimants' property despite the outcome of the criminal case is a textbook example of the kind of civil forfeiture abuse that Congress sought to curb in enacting CAFRA [Civil Asset Forfeiture Reform Act of 2000]," the Gas Pipe's defense attorneys wrote in November.

Shults started the family smoke shop business after returning to Texas from Vietnam disillusioned by the war. He joined the counterculture movement and became a "small-time hippy entrepreneur," selling novelty items out of a store he lived in, his attorneys have said.

The first Gas Pipe opened in 1970, and it grew into a successful retail chain with 14 locations in Texas and New Mexico and almost 200 employees.

Correction on January 22 at 2:25 p.m.: An earlier version of this story incorrectly reported that the Gas Pipe civil forfeiture case had been put on hold due to the government shutdown.

Other forfeiture cases:

Here are some other civil forfeiture cases brought against people who either were not charged with or not convicted of a crime.

Anthonia Nwaorie: The 59-year-old nurse from Katy, west of Houston, was never accused of a crime, but U.S. Customs and Border Protection seized more than $44,000 in cash from her at Houston's George Bush Intercontinental Airport. Nwaorie had saved up the money from her work to open up a clinic in Nigeria, where she was born. Nwaorie, a U.S. citizen, also was planning to give some of the money to relatives in Nigeria. The government returned the money after she sued.

Emir Adel Chehab: The Dallas pilot's 1984 Beechcraft King Air 300 airplane was seized by the government in 2014 after a Drug Enforcement Administration agent said Chehab used it to transport drugs. More than four years later, Chehab has yet to be charged with a crime. The civil forfeiture case has been stayed while a criminal investigation allegedly continues.

Don Fontana: The Carrollton pilot was acquitted of charges that he flew two men and more than 380 pounds of cocaine into an airport just outside of Atlanta. But the government did not return his seized 1982 Cessna after the not-guilty verdict. Federal officials brought their forfeiture case to another jury, which ruled in favor of Fontana in 2012, giving him a rare double-victory over the government.

Aaron Dorn: The upstate New York man was acquitted of charges that he tried to ram his truck into a state trooper in North Dakota during a protest of the Dakota Access Pipeline in 2016. But North Dakota county continued to hold on to his seized 2003 Chevrolet Silverado. He lost it in the separate civil forfeiture case.