FDA agent testifies in trial involving Duluth head shop

MINNEAPOLIS -- With head shops across the county selling synthetic drugs, the U.S. Food and Drug Administration chose to ignore the widespread sales and instead devoted its resources to prosecute one law-abiding store owner, defense attorneys in ...

Last Place on Earth
A long line of customers seeking to purchase synthetic drugs files into the Last Place on Earth in 2011. (2011 file / News Tribune)

MINNEAPOLIS -- With head shops across the county selling synthetic drugs, the U.S. Food and Drug Administration chose to ignore the widespread sales and instead devoted its resources to prosecute one law-abiding store owner, defense attorneys in the Last Place on Earth drug trial contended Tuesday.

During cross-examination, attorneys grilled FDA Special Agent Ken Kulick, in his second day on the stand, about the agency's response to the Last Place on Earth case. The testimony probably will be key for jurors as they determine whether owner Jim Carlson, his girlfriend, Lava Haugen, and his son, Joseph Gellerman, violated FDA labeling regulations.

Carlson is on trial in U.S. District Court in Minneapolis, charged with 55 federal crimes for allegedly distributing controlled substance analogues and misbranding drugs for sale. Haugen and Gellerman face four counts apiece.

Kulick had testified Monday that products sold in Carlson's shop as incense and bath salts were clearly drugs and were therefore misbranded. Most had little or no ingredient information, directions for use or warnings, he said, and many were labeled "not for human consumption," even though they were clearly meant to be ingested, he testified.

But defense attorneys Tuesday pressed Kulick about product labeling, even questioning the role of the FDA in the investigation. Carlson's attorney, Randall Tigue, showed Kulick an FDA flier that was mailed to the store, stating that the FDA regulates "only cigarettes, cigarette tobacco, smokeless tobacco and roll-your-own tobacco."


Defense attorneys are contending that evidence such as the flier shows that defendants did not realize that the FDA already regulated the products. In at least one news interview that has been submitted into evidence, Carlson states that he wishes the government would regulate the products.

Kulick also testified Tuesday that although the agency collected contact information for more than 30 of Carlson's distributors during a federal raid in July 2012, he was not aware of any efforts to contact the companies or send warning letters about FDA violations.

"Had the FDA issued warning letters about misbranding from the very beginning of the investigation, it could have stopped thousands of sales of what you call 'dangerous products' from being sold. Fair?" Tigue asked.

"That's fair," Kulick conceded.

On redirect questioning from Assistant U.S. Attorney Surya Saxena, however, Kulick testified that warning letters are typically only sent to reputable companies that the FDA has reason to believe would comply with the requests.

"Is the FDA required to send warning letters before prosecuting a case for violations of (the federal Food, Drug and Cosmetics Act)?" Saxena asked.

"No, it's not required," Kulick replied.

"Aren't the majority of warning letters sent to companies like Proctor & Gamble?" he asked.


"We send them to companies that we have no reason to believe won't comply," Kulick said.

Later in the day, prosecutors called to the stand Tamera Shrouck, who testified that her former fiancé, Blake Dennis, manufactured and supplied incense to the Last Place on Earth from their home in Winona, Minn., and later Alma, Wis.

Shrouck, who originally was charged in Wisconsin with maintaining a drug-trafficking place before charges were dropped, testified that she assisted Dennis by buying ingredients and shipping products to the Last Place on Earth. Dennis manufactured "No Name," one of the store's most popular products.

But Shrouck, a nurse, said she was worried about the legality of the product the entire time and said she repeatedly expressed her concerns with Dennis.

"Blake would say it was legal and the lawyers would say it was legal," she testified. "But I wrestled with the possibility that it could be illegal, and I didn't want to be involved with that."

Nonetheless, Shrouck testified that she regularly purchased acetone, an ingredient in the chemical mixture, and shipped the incense to the store, lying about the contents of the packages to have them shipped by UPS or FedEx.

She said she also was advised to tell authorities the products were not for human consumption and said Dennis threated violence if police executed a search warrant.

"He said if law enforcement came, he was going to shoot at them," Shrouck said. "He wasn't going to go to jail. He was going to let them shoot him."


Police did raid their home and arrested Shrouck. Dennis wasn't home at the time, but was later taken into custody. A federal investigation against him continues.

Shrouck will be on the stand again this morning to be cross-examined by defense attorneys.

One of the key issues jurors will have to decide is whether Carlson, Haugen and Gellerman can be held responsible for selling products that were not labeled as drugs, but were intended to be ingested. Defense attorneys contend that the manufacturer, not the seller, should be responsible for providing that information. Prosecutors argue that the defendants are ultimately responsible for misbranding the products.

Midway through its second week, the trial is scheduled to run three weeks. Prosecutors had hoped to begin calling expert witnesses this morning, but Tuesday's testimony ran longer than expected and they still have several more witnesses in line.

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