Hi Tech founder Wheat indicted on 18 counts including mail fraud, money laundering

By Hank Schultz contact

- Last updated on GMT

Hi Tech founder Wheat indicted on 18 counts including mail fraud, money laundering

Related tags: Fraud, Fda

Hi Tech Pharmaceuticals founder Jared Wheat has been charged with money laundering and wire fraud by federal authorities in an indictment unsealed last week.

According to a report in the Atlanta Journal Constitution​, Wheat, whose business is based in the suburb of Norcross, GA, has been charged with 18 criminal counts in a grand jury indictment that include wire fraud, money laundering, introducing misbranded drugs into interstate commerce and manufacturing and distributing controlled substances​. An associate, John Brandon Schopp, is also identified as taking part in some of the alleged schemes.

The wire fraud section of the indictment, which was filed in Northern District of Georgia, alleges that Wheat and his company drew up fraudulent ‘certificates of free sale’ for products that made it appear as if they had been issued by the Food and Drug Administration.  FDA will upon request supply these certificates, which are occasionally requested by importers in other countries who are buying US products, that according to the indictment indicate that, The food product is marketed in the United States and eligible for export if certain statutory provisions are met.  ​According to the indictment, Wheat and Schopp (who was identified as Hi Tech’s manager of manufacturing operations) supplied to customers misleading documents and representations regarding the regulatory compliance of HI-TECH and its products, including false, fraudulent, and misleading FDA Certificates of Free Sale, GMP certificates, and GMP audit reports.

Sale of steroids

Wheat is also alleged to have sold products containing anabolic steroids masquerading as supplements by calling these substances ‘pro-hormones.’  According to the indictment, the products, In fact contained Schedule III Controlled anabolic steroids not properly declared as ingredients on the products' respective labeling.

The products cited in the indictment are:

  • Superdrol, which is alleged to contain contained androstanedione, 4-androstenediol and/or 5-androstenediol, and boldione;
  • Equibohn, which allegedly contains 4-androstenediol and/ or 5-androstenediol;
  • 1-AD, which allegedly contains boldione, androstanedione, 4-androstenediol and/or 5-androstenediol;
  • 1-Testosterone, said to contain boldione and androstanedione
  • Androdiol, alleged to contained 4-androstenediol and/ or 5-androstenediol.

Legal wrangle over DMAA

Wheat has been locked in a battle with FDA over the sale of the controversial stimulant-like ingredient DMAA, which he continues to assert is sourced from geranium. In an interview with NutraIngredients-USA earlier this year, Wheat said, I see us as being one of the few companies that stands up to the FTC and FDA. They have gone and started legislating by warning letter instead of going to Congress to get ingredients off the market the way they should.

When they took mahuang ​(ephedra) off the market, we fought the ban and were unsuccessful but they did it the right way within their mandate,​ he said.

Wheat, who has spent time in prison on a number of charges, has challenged FDA’s over the use of the stimulant ingredient 1,3-dimethylamylamine (DMAA). FDA banned the ingredient in 2013 after reports that the stimulant was implicated in the deaths of several soldiers. But while the case makes its way through the courts, Hi-Tech has been free to operate.  The case, which has gone of for several years, pits FDA’s mandate to protect public health against the concept of due process before the government takes action against an individual or firm. Hi Tech has argued that FDA’s use of its power of administrative detention to get DMAA off the market without conducting studies to provide scientific proof on the ingredient’s dangers violates this concept. Wheat says the military’s own assessment of the soldier’s death exonerates DMAA, though the ingredient remains illegal to sell at base commissaries.

Wheat did not respond to a request for comment  on the most recent indictment before the publication of this article.

Related topics: Regulation

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