A Georgia-based dietary supplement maker and its CEO are facing 18 criminal charges for a variety of questionable business practices that, if proven, could land the supplement entrepreneur to prison for the third time in less than a decade.
CEO Jared Wheat and his company Hi-Tech Pharmaceuticals, Inc., were named in the federal indictment, which accuses both of wire fraud, money laundering, introducing misbranded drugs into interstate commerce, and manufacturing and distributing controlled substances. Hi-Tech’s director of contract manufacturing, John Schopp, is also named in some of the charges.
Wheat and Schopp are accused of creating counterfeit documents to appear as if Hi-Tech’s dietary supplements met various Food and Drug Administration (FDA) standards. In some cases, signatures were forged and government seals were used without authorization.
Hi-Tech, which sells its dietary supplements through retail stores, was also accused of manufacturing and distributing controlled substances, including at least five “prohormone” supplements that contain anabolic steroids – controlled substances that require a doctor’s prescription. The indictment claims that the company’s Choledrene, promoted to reduce cholesterol levels, was misbranded because it contains hidden doses of the prescription statin medication Lovastatin.
Wheat pled guilty in 2008 to conspiracy to commit mail and wire fraud for selling fake prescription drugs, and served two years in prison. He returned to prison in 2014 for two months for failing to carry out a recall of weight loss products.
Wheat was also caught up in a legal battle with the FDA that in 2014 seized $2 million of Hi-Tech dietary supplements containing DMAA. A U.S. District Judge later ruled that the stimulant was unlawful and the government had a right to seize it.
As part of the arraignment, Hi-Tech was ordered to cease manufacturing, distributing and selling adulterated or misbranded drugs.