Green’s Dictionary of Slang

shag adj.1

[? SE shag, a rascal, a rogue]

1. criminal, corrupt.

[UK]Sam Sly 12 May 3/2: We advise that shag butcher, Jim Yo—ng, to pay his debts, and not obtain beef and mutton under such false pretences.

2. (US prison) worthless.

[US]A.J. Pollock Und. Speaks.
[US]San Quentin Bulletin in L.A. Times 6 May 7: SHAG, worthless.
[US]Monteleone Criminal Sl. (rev. edn).