S4|E2: Batman and Darryl | Part 1

Summary

Gone South: S4|E2 - "Batman and Darryl | Part 1"

Introduction

In the second episode of Season 4, titled "Batman and Darryl | Part 1," host Jed Lipinski delves deep into one of the most intriguing cases handled by DEA agent Steve Peterson. This episode unpacks the complex investigation into Darryl Smith, a seemingly unassuming medical school graduate who led a double life as a high-volume methamphetamine manufacturer. Through firsthand accounts, detailed narratives, and insightful commentary, Jed presents a gripping story that intertwines crime, the Southern backdrop, and human nature.

Meet Steve Peterson: The Legendary DEA Agent

The episode introduces listeners to Steve Peterson, a seasoned DEA agent with a storied career. Peterson, affectionately nicknamed "Batman" for his unconventional undercover methods—once donning a full Batman costume during raids—shares his early days with the DEA in Atlanta.

“I came on with DEA back in the early 80s. I'm a Bostonian by birth, but in DEA's infinite wisdom, they sent me to Atlanta in October of 1983. So I arrive in Atlanta. Huge culture shock for me. As you can imagine, I didn't understand a lot of people. They didn't understand me.” (01:09)

Assignment to DEA Special Enforcement Operation 383

Peterson recounts his assignment to DEA Special Enforcement Operation 383 (SEO 383), a covert storefront designed to attract and monitor criminal activity related to illegal drug manufacturing.

“We sold glassware and chemicals intentionally to criminals for the purpose of manufacturing illegal drugs... If you treat normal people badly, then only bad people will come to you.” (03:44)

Despite his preference for street operations, Peterson adapts to his role behind the counter, working alongside his more experienced partner, Terry Mathewson. Their mission is clear: identify and apprehend individuals involved in large-scale meth production.

The Enigmatic Darryl Smith

The pivotal moment in the episode centers around Darryl Smith, a young, affluent medical school graduate who becomes the focal point of SEO 383’s investigation. An unusually large order of ethers—1555-gallon drums—piques the DEA's interest, signaling potential large-scale meth production.

“That's a lot of freaking ether. You've gotta be making huge quantities to buy ether in that quantity, you know what I mean?” (07:05)

Smith’s background is meticulously examined. While he boasts a medical degree from Emory School of Medicine, his lavish lifestyle—marked by luxury cars, motorcycles, boats, and a seemingly successful nail salon—raises suspicions.

“He had Harley Davidson motorcycles, he had boats. I mean, he had all kinds of toys. All kinds of toys.” (09:24)

Surveillance and the Discovery of the Meth Lab

Detailed surveillance leads Peterson and his team to Smith’s residence in Roswell, an affluent suburb of Atlanta. Contrary to typical meth manufacturers who operate in seclusion, Smith’s well-maintained home with pristine lawns is uncharacteristic, deepening the mystery.

“Normally your typical manufacturer is like this broken down, skinny, old, no tooth idiot who doesn't really understand chemistry... But when we learned about his background... He's making meth.” (09:58)

Investigations into Smith’s finances reveal inconsistencies between his reported income from gambling and his extravagant possessions. This financial discrepancy further implicates him in illicit activities.

“This doesn’t justify depositing $50,000 in cash from the nail salon. That doesn’t make sense.” (12:24)

Peterson’s persistence pays off when he successfully plants a tracking device on Smith’s van. This leads to the crucial discovery of a concealed meth lab in Smith’s home, ingeniously hidden and operated to avoid detection.

“This was in the kitchen, I found the beeper that I stuck on the van. He had broken the antenna off it, but he had saved the actual beeper itself.” (23:29)

The Arrest and Aftermath

With irrefutable evidence, including methamphetamine traces from the lab, Smith is indicted and arrested. However, the story takes a dramatic turn when Smith escapes from prison, leading to further complications and augmenting the case's notoriety.

“He was an inch or two shorter than me. He was a little bit smaller than me. He looked like a medical student. He looked like somebody you see, you know, in medical school. He just looked like a little nerdy guy.” (26:25)

Connecting to Modern Narratives

In a fascinating twist, Peterson draws parallels between Smith’s case and the popular television series Breaking Bad. He likens Smith’s transformation from a mild-mannered individual to a dangerous criminal to the show's protagonist, Walter White.

“This is Daryl Smith modernized to meet today's trafficking trends... But this the same method of manufacturing. Holy crap. His transformation from a meek little bookwormy guy to this violent criminal. This is Daryl. This is Daryl all over.” (33:23)

Cliffhanger and Future Prospects

As the episode concludes, Peterson reflects on the profound impact of the case on his career and hints at unresolved elements, setting the stage for the continuation in Part 2. Just as listeners are left contemplating Smith’s motivations and future actions, a mysterious voicemail from Darryl Smith himself teases further revelations.

“Good afternoon, Jed. This is Darrell Smith returning your call.” (34:44)

Conclusion

"Gone South: Batman and Darryl | Part 1" offers a compelling narrative that blends real-life law enforcement tactics with the intricate psychology of a complex criminal. Through Steve Peterson's detailed recounting, Jed Lipinski paints a vivid picture of the challenges and triumphs in uncovering and dismantling a high-profile meth operation. The episode not only highlights the procedural aspects of DEA work but also delves into the human elements that drive individuals like Darryl Smith down the path of crime.

Notable Quotes

• Steve Peterson on his assignment: “I came on with DEA back in the early 80s... I didn't understand a lot of people. They didn't understand me.” (01:09)
• On targeting criminals: “If you treat normal people badly, then only bad people will come to you.” (03:44)
• Describing Smith’s lifestyle: “He had Harley Davidson motorcycles, he had boats. I mean, he had all kinds of toys.” (09:24)
• On the meth lab discovery: “It was actually quite ingenious when you think about it.” (20:06)
• Reflecting on Breaking Bad: “This is Daryl Smith modernized to meet today's trafficking trends... This is Daryl. This is Daryl all over.” (33:23)

Stay Tuned

As "Batman and Darryl" Part 1 wraps up, listeners are left eagerly anticipating the continuation of Darryl Smith’s saga in the next episode. With unresolved tensions and the promise of Smith’s direct involvement, the stage is set for further exploration of his life and the aftermath of his arrest.

---

Note: For further episodes and updates, subscribe to "Gone South" on the Odyssey app or your preferred podcast platform.

Transcript

[Rosetta Stone Representative]

As we gather with loved ones this holiday season, consider how learning a new language can enhance your connections and enrich your experiences. What are your goals for the upcoming holiday season? Whether it's traveling internationally or connecting with family and friends, a new language can open doors to meaningful conversations and cultural appreciation. With that in mind, there's no better tool than Rosetta Stone, the most trusted language learning program available on desktop and mobile. Rosetta Stone immerses you in the language so you truly learn to think, speak and understand it. Natur with Rosetta Stone's intuitive approach, there are no English translations, you're fully immersed and the built in True Accent feature acts like a personal accent coach, giving you real time feedback to make sure you sound just right. Don't put off learning that language. There's no better time than right now to get started. For a short time, listeners can get Rosetta Stone's Lifetime Membership Holiday Special. This offer will not last long. Visit rosettastone.com/10 that's unlimited access to 25 language courses for the rest of your life. Redeem your Holiday [e-mail] Rs10 today for yourself or as a gift that keeps giving.

[Steve Peterson]

This episode is brought to you by US Cellular. Don't sacrifice a great experience for a great deal. Now with US Cellular Prepaid, you'll get a new Samsung Galaxy A15.5G free without the hidden fees you get with other prepaid providers, so you can use U.S. cellular's nationwide 5G coverage without sacrificing anything. Terms apply. Visit uscellular.com for details. All right, my name's Steve Peterson. I came on with DEA back in the early 80s. I'm a Bostonian by birth, but in DEA's infinite wisdom, they sent me to Atlanta in October of 1983. So I arrive in Atlanta. Huge culture shock for me. As you can imagine, I didn't understand a lot of people. They didn't understand me.

[Jed Lipinski]

Steve Peterson is something of a legend in the dea. He goes by the nickname Batman, a name he picked up because for a few months in the late 80s he wore a full Batman costume with the cowl, the cape and everything during drug raids around Atlanta before his boss found out and transferred him to Charlotte. But that's another story. This story begins at a fake chemical supply shop on the east of Atlanta.

[Steve Peterson]

I was assigned to DEA SEO 383 DEA Special Enforcement Operation 383. I don't know what the other 382 were, but SEO 383 was a storefront an actual brick and mortar store. And we sold glassware and chemicals intentionally to criminals for the purpose of manufacturing illegal drugs. We advertised in biker magazines, High Times, and other somewhat underground publications looking to generate interest in that type of clientele. And they did come to us as a storefront. We had a fake sign on the store, and I mean, it existed in a strip plaza with other legitimate businesses. And on occasion, legitimate people would come in to purchase chemicals and glassware for whatever their reasons were. And if we determined that they were legitimate people looking to purchase chemicals for legitimate reasons, we would try to steer them away. We would just treat them like dirt. We'd be rude to them, we'd be mean to them. We would charge them five, six times what they could purchase somewhere else. You know, the price was outrageous, but we were trying to target the criminal element. You know, if you treat normal people badly, then only bad people will come to you.

[Jed Lipinski]

And was that what you'd envisioned doing as a DEA agent, working behind the counter at a store?

[Steve Peterson]

No, that's not at all. I didn't want to even go to the store. I was not interested in being assigned to the storefront. I wanted to work the street.

[Jed Lipinski]

A chance to work the street soon presented itself. Steve's co worker at the storefront was another DEA agent named Terry Mathewson. Terry was 10 years older than Steve and more experienced. He told Steve about a number of cases the Atlanta office had underway. One of them concerned a young man named Darrell Smith.

[Steve Peterson]

And he told me that Darrell had ordered these 1555 gallon drums of ether, a chemical solvent that is commonly used in the method of manufacturing not only of methamphetamine, but can also be used in the conversion of cocaine base into cocaine hydrochloride. But this is the size, the quantity of ether that was ordered by Darrel would have to be such that he would have an industrial need. I mean, 1555 gallon drums, pretty significant. You know, we call that a clue.

[Jed Lipinski]

According to Steve's partner, Terry, the DEA still didn't know much about Daryl Smith. They knew he was young and that he'd received his medical degree from Emory School of Medicine a few years earlier. But he was not a practicing physician. Instead, he seemed to spend most of his time gambling in Las Vegas, London and Monte Carlo. And if he was making meth, judging from the amount of ether he'd ordered, it was enough to supply the entire state of Georgia.

[Steve Peterson]

You know, I'm a new guy, I'm a young guy. All I want to do is put bad guys in jail. That's all I want to do.

[Jed Lipinski]

Steve Peterson was only a few months into his first job with the dea. But he was about to work the most peculiar case of his career. I'm Jed Lipinski from Odyssey Podcasts. This is gone south. In the 1990s, the most popular way to manufacture methamphetamine was the pseudoephedrine reduction method. Basically, this involved getting your hands on a lot of over the counter cold medicine like Sudafed, crushing up the pills and mixing the powder with a solvent to isolate the pseudoephedrine inside. You then reduced it with chemicals like iodine or red phosphorus. In just a few hours, you had methamphetamine. But before pseudoephedrine came into fashion, meth cooks were limited to what's known as the P2Pmethod. P2P stands for phenyl 2 propanone. It was the main precursor chemical used to manufacture meth. Meth cooks, whether they were making it in a lab or a bathtub, mixed P2P with other precursor chemicals to make the drug. As meth gained popularity in the late 70s though, phenyl 2 propanone was classified as a controlled substance and the common precursors like ether were tightly restricted, chemical companies started reporting suspicious orders to the DEA. So in 1983, when a chemical manufacturer in New Jersey learned that an individual in Atlanta with no apparent connection to a laboratory or institution had just placed an order for 15 drums of Ethereum, they immediately contacted the DEA. That's how Steve Peterson learned about it.

[Steve Peterson]

That's a lot of freaking ether. You've gotta be making huge quantities to buy ether in that quantity, you know what I mean?

[Jed Lipinski]

Not long after Steve joined the storefront, his team spoke with the ether manufacturer in New Jersey. They learned that Daryl was due to pick up all 15 drums from an Atlanta distributor in a few weeks time. So DEA got permission to drop a tracking device, or what Steve calls a beeper, into one of the drums before Daryl picked them up.

[Steve Peterson]

I call it a beeper because this is before we had gps. So this thing just emitted a signal, a beep. And you had to be line of sight in order to receive the beep. And you looked at it on a little screen and it kind of looked like Pac Man. You know, you followed the little dots, and if you were traveling, you would follow the little dots as, okay, well, you must be turning left because the dots are turning left. Looking back now, it's almost as if we were in the Fred Flintstone days, judging from today's technology. But back then, this is all cutting edge stuff.

[Jed Lipinski]

On the day Daryl arrived at the distributor, Steve's partner Terry was inside the warehouse posing as an employee. Steve and other agents were parked outside in unmarked vehicles. A small single engine Cessna owned by the DEA circled high above, monitoring Daryl's movements. Steve watched Darryl pull up in a cargo van and load all 15 drums. Even at a distance, he could tell Darryl was nervous.

[Steve Peterson]

He appeared very paranoid because he was constantly looking around. He just looked like an average guy, just some schmo, you know, he wasn't intimidating, he wasn't threatening looking.

[Jed Lipinski]

When Darryl pulled away, Steve and the other agents followed.

[Steve Peterson]

And we follow him all around the city of Atlanta. He's driving all this different way. I assume he's looking to see if he's picked up surveillance or if anybody's following him. He's making somewhat of a circuitous route and he ends up at a mini warehouse, a mini storage facility, and he rented maybe a 20 by 30 space and he put all 1555 gallon drums in that space, closed the door, put a lock on it, and he drove away.

[Jed Lipinski]

Steve and his team followed Darryl to a big house on a sprawling 10 acre lot in Roswell, an affluent suburb of Atlanta with manicured lawns and pristine homes. Sitting in the driveway were a Rolls Royce, a Mercedes, a Porsche and a Cadillac.

[Steve Peterson]

He had Harley Davidson motorcycles, he had boats. I mean, he had all kinds of toys. All kinds of toys.

[Jed Lipinski]

Steve hadn't been with DEA for long, but he knew enough to know that most meth cooks didn't live this way. They usually lived in rundown homes in remote or rural areas where the smell produced by the chemicals was less noticeable. And Daryl Smith didn't fit the profile of your typical meth cook. And is it fair to ask, like what a more typical meth manufacturer would have looked like at that time? Like it's not a medical student?

[Steve Peterson]

No. So normally your typical manufacturer is like this broken down, skinny, old, no tooth idiot who doesn't really understand chemistry, but understands if you mix A and B, you're going to get C. They don't really understand the chemical breakdowns. They don't really understand the chemistry behind it. They just. It's like me cooking. I don't know how to make spaghetti sauce, but I know if I put tomatoes in a pot and smush them and I add a few more other things, I can get something I can live with. It's not going to taste like Olive Garden, but at least it's something.

[Jed Lipinski]

Yeah.

[Steve Peterson]

You know what I mean?

[Jed Lipinski]

Exactly.

[Steve Peterson]

But when we learned about his background. And he's got a medical degree, He's a graduate from medical school, and he's making meth. Of course, the first thing that comes to mind is who's he working for.

[Jed Lipinski]

Back at the office, Steve filed a court order to look at Darrell's tax returns. He wanted to see how Darrell claimed to be making money.

[Steve Peterson]

So we were able to see that he was claiming a large amount of income as a professional gambler. He played poker. I know he went to London a lot. He went and gambled in England. He gambled in Vegas a lot.

[Jed Lipinski]

So Steve and some agents in Las Vegas started reaching out to casinos. They learned that Daryl was well known on the local gambling circuit.

[Steve Peterson]

The casinos keep impeccable records as to who are the winners and losers. So they know. So we were learning that Darryl was. He was a gambler, a big gambler, but he wasn't a big winner. Occasionally he'd win a couple hundred thousand, but more often than not, he would lose hundreds of thousands of dollars at a time. And the casinos loved him because he was putting a lot of money in them.

[Jed Lipinski]

Daryl wasn't affording his lifestyle through gambling. So Steve ran a search to see if Daryl or his wife owned or operated any businesses that would account for the home, the cars, and the boats.

[Steve Peterson]

We found out that between he and his wife, they ran and owned a nail salon just a few miles from his house up in Roswell. So she had a nail salon that she ran. So when we didn't have things going on at the store, I would oftentimes just go park at the nail salon in the parking lot. And I would just sit on the nail salon and watch to see how many people would come and go. And by watching the nail salon and realizing how many customers showed up during the day, you would go, man, this guy's only had like 10 customers a week. This doesn't justify depositing $50,000 in cash from the nail salon. That doesn't make sense.

[Jed Lipinski]

By this point, it seemed obvious to Steve and Terry that Darryl was involved in the drug trade. But the only evidence they had was that industrial sized order of ether. They hadn't seen him manufacture methamphetamine. They also didn't know where the lab site was or if one even existed. One afternoon, Steve was staking out the nail salon when he saw Darryl pull up. He was driving the same cargo van he'd used to pick up the barrels of ether months earlier.

[Steve Peterson]

So we have not seen this van. This van has been missing. It's not been at his house. We've never seen it at his house. We didn't know where he kept it. But the van shows up and so I was like, holy crap, the van's here and I'm by myself, sit in a parking lot.

[Jed Lipinski]

When Daryl and his wife left to grab lunch, Steve crawled under the van with a beeper.

[Steve Peterson]

I think I had just stuck the beeper on the underside of the van. When I look over and here's these two legs standing next to me at the van. And then the van door opens and it's Daryl getting in. So now I'm like frozen under the van, trying not to move, hoping he's not going to, you know, look underneath the van. But he gets in, van starts it up. I'm underneath there and I'm thinking, holy crap, what am I going to do now? He puts it reverse and he backs out of parking spot. And as he does this, I just hang on to the drive shaft and it just, I kind of pull myself up, suspend myself under the vent and he kind of drags me backwards. And then when he puts it in drive to go forward, I just let go and kind of suck it up a little bit and he drives right over me. As soon as he drove off, I jumped up, got my car, and we started following him.

[Jed Lipinski]

This time, Steve followed Daryl to a different house, one he'd never seen before. This one was small in a rural area tucked away in a cul de sac. To the untrained eye, this house was totally normal and an unlikely place for a meth laboratory. But by now Terry had learned that when it came to Daryl Smith, appearances could be deceiving.

[Rosetta Stone Representative]

How about some fresh out of the oven? Gingerbread, bright snowdrop, fresh Iowa pine and cool peppermint to put you in the holiday cleaning spirit.

[Jed Lipinski]

Made with goodness.

[Rosetta Stone Representative]

Not a lot of nonsense, Mrs. Meyers. See what good can grow.

[Jed Lipinski]

Visit Mrs. Myers.com today.

[Rosetta Stone Representative]

I'm Jenna Fisher. And I'm Angela Kinsey. We are best friends and together we have the podcast Office Ladies where we rewatched every single episode of the Office with insane behind the scenes stories, hilarious guests, and lots of laughs.

[Steve Peterson]

Guess who's sitting next to me?

[Rosetta Stone Representative]

Steve. If I was correct in the studio, every Wednesday we'll be sharing even more exclusive stories from the Office and our friendship with brand new guests. And we'll be digging into our mail bag to answer your questions and comments. So join us for Brand new Office Ladies 6.0 episodes every Wednesday. Plus on Mondays, we are taking a second drink. You can revisit all the Office Ladies rewatch episodes every Monday with new bonuses, tidbits before every episode. Well, we can't wait to see you there. Follow and listen to Office Ladies on the free Odyssey app and wherever you get your podcasts, this episode is brought to you by Etsy. Oh, hear that?

[Jed Lipinski]

Okay, thank you.

[Rosetta Stone Representative]

Etsy knows these aren't the sounds of holiday gifting. Well, not the ones you're hoping for. You want squeals of delight, Happy tears?

[Jed Lipinski]

How did you.

[Rosetta Stone Representative]

And spontaneously written songs of joy?

[Jed Lipinski]

I am so happy.

[Rosetta Stone Representative]

Oh, yeah.

[Steve Peterson]

Oh, yeah.

[Rosetta Stone Representative]

Oh, yeah. Um, okay, the song needs a bit of work, but anyway, to get those reactions, make sure everyone on your list feels heard with handmade, handpicked, and designed gifts from small shops on Etsy. Gifts like personalized jewelry, custom artwork, cozy style items, vintage pieces, and home decor to sell. Celebrate all of your favorite people and their specific kind of special. For original gifts that say I get you, Etsy has it.

[Jed Lipinski]

After following Darryl's van to the house at the end of a cul de sac, Steve was hoping this was the lab site. But something didn't add up. How could you have a meth lab in the middle of a neighborhood?

[Steve Peterson]

There are neighbors around. You know, there's neighbors. You're not going to have a large scale manufacturing site in a neighborhood because the odors that are produced in the clandestine manufacture of methamphetamine are horrendous, and you just can't mask them. It's very, very difficult to mask the odors.

[Jed Lipinski]

The next day, Steve pulled the property records for the house. He realized Daryl had purchased it for $100,000 in cash a few years back. But then he pulled its utility records.

[Steve Peterson]

We can see he would go months at a time. No water, no power. No water, no power. And then, boom, one month, he would fill, like, five Olympic swimming pools. He would use so much water, or he would use enough power to light up Yankee Stadium, you know, and then back. No water, no water, no power, no power. At that point, we knew exactly that this was the lab site.

[Jed Lipinski]

Agents installed a concealed camera on the property. They determined that Daryl visited the house once a week to mow the lawn and pick up the mail. At night, Steve and his partner Terry would lay out in the swamp behind the house with binoculars, hoping Daryl might show up and trying to figure out where the lab might be.

[Steve Peterson]

We could see that there had been alterations to the house which would indicate additional ventilation to the basement area. So in our minds, we're saying, okay, based on the floor plan in this part of the basement, that's where the lab is. That was our educated guess.

[Jed Lipinski]

DEA eventually got a surreptitious search warrant that allowed them to search the house in the middle of the night. On the condition they left no trace behind, they brought an FBI agent to pick the lock.

[Steve Peterson]

So now there was like four of us, four or five of us DEA agents inside the house. We knew where the lab was, we just didn't know how to get there. So one of the guys said, well, I'll bet there's a trap door upstairs underneath the wall to wall carpet. So, like morons, we went upstairs and we pulled all the wall wall carpet up. Hell, there was no trapdoor there. So we had put all the wall carpet back down together. And one of the guys was in the garage and he's, he's just staring at the wall in front of the van and he says, you know, hey, how come these studs are double studded here and double studded there? Why would that be? So he looks a little further and he finds a little pins, takes out these little pins on the double studs. That whole section of the wall comes out and it's a tiny hallway that leads to another locked door.

[Jed Lipinski]

The FBI agent picked this lock too. And they all walked in.

[Steve Peterson]

It was a large room and it had a whole bunch of chemical containers, drums and bottles and barrels, because different types of chemicals come in different containers. But it had a lot of supplies. The floor, the walls, the ceiling, all covered in linoleum. He had countertops in there. I mean, this was a pharmaceutical quality laboratory. And it all vented out through PVC pipe that he had put in and he had forced it down into the swamp. So all his waste and all his fumes, he bubbled up through the swamp to filter out the odors so the neighbors would never detect the manufacturing. It was actually quite ingenious when you think about it.

[Jed Lipinski]

Steve and his team sampled the chemicals and sent them to the DEA's forensic lab in Miami.

[Steve Peterson]

They analyzed it and they found that it had traces of methamphetamine. It contained methamphetamine. These were all the precursors used in the manufacture of methamphetamine.

[Jed Lipinski]

Finally, they had proof of what they'd suspected all along. Daryl Smith, the clean cut medical school graduate, was leading a double life as a methamphetamine chemist. And yet they still didn't know who Darrell was working for.

[Steve Peterson]

Typically, when you have an operation of this size, somebody controls distribution, somebody else controls manufacturing. Now, it might be the same organization that controls all of it. But the chemist doesn't have anything to do with the distribution. That's just typically the way it is. And that's what we were trying to figure out with Darrell. Who is he cooking for? Who's running this? Because it's not Darrell.

[Jed Lipinski]

Steve and Terry discuss next steps with their bosses at DEA and the U.S. attorney's office.

[Steve Peterson]

And of course, the game plan ideally would be wait for him to manufacture another load and then take him off after he's manufactured. You don't want to take him off while he's manufacturing because this stuff is so volatile. I mean, you could cause a massive explosion. So to take him off after he's manufactured, that way we'll have him, you know, kind of with his fingers in a cookie jar. He'll, you know, he'll have dope on him. He'll have done it. But the problem was we had no idea how long that could take. We didn't know when he would manufacture again. So the powers to be kind of determined that we were going to go ahead and indict him, get an arrest warrant and go lock him up. We weren't going to wait until he manufactured again. We're going to go get them now.

[Jed Lipinski]

The Fed sealed the indictment to make sure they arrested Daryl before word got out.

[Steve Peterson]

And we decide, okay, we're going to arrest him on Tuesday, right? So Monday we determine, hell, he's not here in Georgia and we do some checking with the airlines and we find out he's in Vegas.

[Jed Lipinski]

So Steve's partner Terry flew out to Vegas at 7 in the morning on December 4, 1984, agents arrested Darryl and his wife at the Golden Nugget Hotel and Casino. Though he was arrested without incident, A newspaper reported that Darryl was armed with an Uzi pistol and a sawed off shotgun. They added that he was wearing a dagger belt buckle with a handcuff key sewn into the belt. Back in Atlanta, Steve and a team of agents raided the lab site and Darryl's house in Roswell. At the house, they found, among other things, a submachine gun, a pet boa constrictor, and a large collection of gambling trophies.

[Steve Peterson]

Some of them were for legitimate poker tournaments, but others where he finished number one. He had a mate at local trophy shops. He had these things made up so that he could prove to neighbors and other people, hey, I'm a professional gambler. And as we're going through his residence, we found these FOIA requests.

[Jed Lipinski]

FOIA stands for Freedom of Information Act. It's the same thing as a Public records request.

[Steve Peterson]

And I have to assume that the FOIA requests were because he was trying to find out who's looking for him, who's watching me? Is anybody following me?

[Jed Lipinski]

In the kitchen, Steve spotted something else. Something that led him to believe Darryl knew they were onto him.

[Steve Peterson]

But also in the cabinets above his refrigerator in the kitchen, I found the beeper that I stuck on the van. He had broken the antenna off it, but he had saved the actual beeper itself.

[Jed Lipinski]

As they were wrapping up their search of Daryl's home, an agent tripped and fell in some blown insulation in the attic. He landed painfully on a small metal box. The box contained a receipt from a mini warehouse in downtown Atlanta, a warehouse they were not previously aware of.

[Steve Peterson]

So based on what we found on that box, we get another search warrant, went to that warehouse, executed it, and in the warehouse we found foot lockers containing somewhere like about 70 kilos, which is like about 150 pounds of finished methamphetamine. Finished product. We never would have found that if not for this poor guy falling in the insulation and finding this box. It was really a gift from God, to be honest with you.

[Jed Lipinski]

It was actually 75 pounds, not 70 kilos, that they found in the footlocker. Still, DEA estimated the street value of the product at around 3.5 million. The head of Atlanta's DEA office told the press, we hit the mother load. Steve and his colleagues were thrilled about the big bust, but they were also puzzled. How and why did Darrell Smith, a promising medical student, become a high volume meth manufacturer?

[Steve Peterson]

So we sat down and we basically said, all right, Darryl, tell us a story. How did you get started? How did this begin? How did you get into making meth and all? So he told us the story. Stop, stop.

[Jed Lipinski]

Stop.

[Steve Peterson]

Had enough? Kick out mucus and quiet the cough with Mucinex 12 hour DM. For long lasting cough and chest congestion Relief, buy Mucinex 12 hour DM at your local retailer. Uses directed.

[Rosetta Stone Representative]

This episode is brought to you by Netflix. From the co director of Shrek and the visionary behind Toy Story comes Spellbound, a magical new animated adventure. Starring Rachel Zegler, John Lithgow, Jennifer Lewis, Nathan Lane and Titus Burgess. With Javier Bardem and Nicole Kidman. When a powerful spell turns her parents into monsters, Princess Elian must journey into the wild to reverse the curse before it's too late. Watch Spellbound only on Netflix November 22nd.

[Jed Lipinski]

Following Daryl Smith's arrest, the feds suspected they'd just busted a major drug ring. Darryl's arrest made national headlines. Reporters tracked down his former med school classmates, who painted a picture of a brilliant, quick witted, but abrasive young man with a distaste for authority. Like, what's your impression of this guy when you finally see him and he starts talking?

[Steve Peterson]

He's like a little nerdy guy. He was an inch or two shorter than me. He was a little bit smaller than me. He looked like a medical student. He looked like somebody you see, you know, in medical school. He just looked like a little nerdy guy.

[Jed Lipinski]

Steven Terry asked Darrell how he'd gotten.

[Steve Peterson]

Started roughly, in a nutshell. The story is back in the mid to late 70s, while he's either a freshman or junior at medical school, he's riding his Harley Davidson, an older Harley Davidson motorcycle. He's riding it for pleasure. Breaks down on the side of the interstate. Another biker stops, works with him for an hour or so, gets the bike running and helps him on his way. Well, unbeknownst to Daryl, the biker who stopped was part of a criminal organization, an outlaw motorcycle gang called the Outlaws. They are like one of the big rivals to the Hell's Angels, the Outlaws. Well, Daryl doesn't know he's an outlaw. He's not wearing his colors as an outlaw. Daryl just thinks he's another Harley rider. And during this stop on the side of the road, when they're working on Daryl's bike, the conversation comes to Daryl's like, yeah, I'm in medical school, I'm doing that. Biker basically says as they're leaving, hey, have you ever thought of manufacturing methamphetamine? So Daryl's like, no, I never thought, no. So they exchange phone numbers. The biker gives Daryl a BS number. It's not real. Daryl gives the biker his real number. And once a month or so, the biker calls Daryl. Hey, Darryl, remember me? I'm the biker. Have you given any more thought at what we talked about? Have you thought about methamphetamine? And Daryl's like, no, no, no. And eventually the guy wore him down. At one point, Daryl was just like, you know, how hard would it be?

[Jed Lipinski]

According to Steve, Daryl said he borrowed some glassware and equipment from a medical school classroom and cooked up a small batch of meth in his rental house.

[Steve Peterson]

He almost burned his house down. But he was successful. And he said, well, son of a gun, this isn't as hard as I thought it would be. So when a guy called back and said, hey, Daryl, have you given any thought? Daryl goes, well, you know, how much money can I make? And then the hook was set, because now the biker's got him. And from that moment forward, Daryl was manufacturing meth for the outlaw motorcycle gang.

[Jed Lipinski]

And yet Darrell claimed after that initial encounter with the biker, he'd never met with anyone from the outlaw motorcycle gang.

[Steve Peterson]

So when the bikers wanted methamphetamine, they would call Daryl and they would say, all right, Darryl, in 30 days, I need 50 kilos. I need 100 kilos. Whatever it was, it was. So Darrell would get to manufacturing, and he would finish up and he'd get his 50 kilos. He would then put the drugs in a duffel bag. He would drive to downtown Atlanta. He would go to the Trailways bus station downtown, put the duffel bag in a locker, take the key, drive a few blocks away to this iconic hot dog place called the Varsity. He would go to the Varsity restaurant, sit at a specific table at a specific time. He would put the key to the Trailways bus locker in the napkin dispenser, and he would leave the table. He come back from the bathroom, reach in the napkin dispenser. He would retrieve a different key. He'd go back to the Trailways bus station, find the locker associated with that key, open the locker. There would be a duffel bag full of cash. So for the entire time he was manufacturing, he never met another human being. He never met anybody other than that guy on the side of the road when his bike broke down. And as you can imagine, this is why we were skeptical of the story. Like, oh, come on, Daryl, you never met anybody. I don't believe. I didn't believe him. So we put him on a polygraph instead of a gun. He was telling the truth.

[Jed Lipinski]

In April 1985, Darrell pleaded guilty to one count of manufacturing amphetamine and one count of possession of the drug with intent to distribute. Given Darrell's status as a first time nonviolent offender, he was given nine years at a medium security prison in Tallahassee. Not long after Darrell's sentencing, the DEA's Atlanta storefront, the last of its kind in the country, shut its doors. Steve was promoted to lead the Southeast region's new Clandestine Lab Enforcement Team.

[Steve Peterson]

That was the second name was given.

[Jed Lipinski]

The first name it was given was the Clandestine Lab Investigation Team. Steve said, until he pointed out that the acronym was CL I T. Not something you'd want written on your hat.

[Steve Peterson]

So we just worked other cases, and some of them were labs and some of them weren't. You know, Darrel goes on with his life, and I'm onto something bigger and better.

[Jed Lipinski]

But then in the spring of 1987, Steve got a surprising call from a U.S. marshal.

[Steve Peterson]

And he goes, hey, do you remember Daryl Smith? And I was like, yeah, yeah. He goes, well, he escaped from prison. And I said, what?

[Jed Lipinski]

The marshal explained that Darryl, the nerdy little med student, had somehow escaped from FCI Tallahassee months earlier. He'd then returned to Atlanta, tracked down a local attorney at his home, and beat him with a shovel before shooting him five times in the legs. Steve was shocked by the news.

[Steve Peterson]

And I was just like, holy crap, where did this all come from?

[Jed Lipinski]

The U.S. marshals put Daryl on their 15 most wanted list. The poster described him as armed and dangerous, adding that he is a medical school graduate who has never practiced medicine. Darryl was on the run for another six months before agents tracked him to a home in Johnson City, Tennessee, where he'd allegedly tried to rob a convenience store. News reports said Darrell tried to escape after a minor scuffle, but no shots were fired. A federal judge added 25 years to his sentence for the escape and the aggravated assault. Darryl was placed on a higher security tier. Steve Peterson would go on to work a number of other high profile cases for the dea. He was an undercover agent on one of the largest seizures of cocaine in DEA history. Over 4,000 kilos stuffed into a Danish freighter by the Medellin cartel. Years passed. Then, just shy of Steve's retirement, the first season of Breaking Bad came out. Breaking Bad told the story of a lowly high school chemistry teacher named Walter White, who, after receiving a terminal cancer diagnosis, decides to manufacture methamphetamine to secure his family's financial future and winds up descending into the criminal underworld.

[Steve Peterson]

It kind of sensationalized criminal activity. Walter was the anti hero. They made him the hero. You know, he's a hero criminal. I'm just. That's not me. I don't. So I. I wanted nothing to do with watching the show.

[Jed Lipinski]

But a few years after he retired, he and his wife were bored one weekend and decided to binge some of it on Netflix.

[Steve Peterson]

So we started watching it. Well, God bless the. My wife and I got hooked and we watched like eight years of it in just a few months. And as I was watching the show and this, the theme was unfolding and his. His role was changing and his involvement. And I thought, son of a gun. I said, this is Daryl Smith modernized to meet today's trafficking trends. Back in the 70s and 80s, that were bikers, Today it's the cartel. They've just changed it up a little bit. But this the same method of manufacturing. Holy crap. His transformation from a meek little bookwormy guy to this violent criminal. This is Daryl. This is Daryl all over.

[Jed Lipinski]

Steve never spoke with Daryl again after that one conversation in December 1984, and from what I could tell, Darryl had never spoken to the press. I was curious if he'd talked to me. A quick public records search showed that he might be living in North Carolina. I left messages on a half dozen possible numbers, but I never got a response, and frankly, I was a bit relieved. I assumed he wasn't proud of his days as a meth manufacturer and that he wouldn't be happy about someone dredging up the story. If he was willing to shoot an attorney, what would he do to a journalist? Then, just after we'd finished the episode, I got a voicemail.

[Steve Peterson]

Good afternoon, Jed. This is Darrell Smith returning your call.

[Rosetta Stone Representative]

He left me a voicemail earlier and.

[Steve Peterson]

I was just getting back to you.

[Jed Lipinski]

It turns out Darrell was more than happy to talk. That's next time on Gone South. If you have information, story tips or feedback you'd like to share with the Gone south team, please email [e-mail] that's gonesouthpodcastmail.com Gone south is an Odyssey original podcast. It's created, written and narrated by me, Jed Lipinski. Our executive producers are Jenna Weiss Berman, Maddie Sprung Keyser, Tom Lipinski, Lloyd Lockridge, and me. Our story editors are Maddy Sprung Keyser and Tom Lipinski. Gone south is edited, mixed and mastered by Chris Basel and Andy Jaskowitz. Production support from Ian Mont and Sean Cherry. Special thanks to J.D. crowley, Leah Reese, Dennis, Maura Curran, Josephina Francis, Curt Courtney and Hilary Schoof. If you want to hear more of Gone south, please take a few seconds to rate and review the show. It really helps.

[Rosetta Stone Representative]

You might think financial crime is all about money, but sometimes it ends in murder. I'm Nicole Lapin, host of Money Crimes, a crime House original podcast. Each episode features a thrilling story about the dark side of finance and how to protect yourself from it. Follow and listen to Money Crimes and Odyssey podcast in partnership with Crime House Studios. Available on the free Odyssey app and wherever you get your podcasts.