In a decisive turn of events, Jared Wheat, together with his company Hi-Tech Pharmaceuticals, Inc., has been found guilty of a multi-million dollar wire fraud scheme. As reported by the U.S. Attorney's Office for the Northern District of Georgia, the Norcross, Georgia-based dietary supplement manufacturer and its CEO were convicted following a six-week trial for their role in defrauding customers and laundering money, a scheme that netted over $4.7 million.
The crux of the conviction stems from deceitful practices where Hi-Tech, under Wheat's direction, fabricated documents to create the illusion of compliance with industry manufacturing standards known as Good Manufacturing Practices (GMP). Despite being tagged by an independent auditor for failing to meet essential GMP guidelines—75 categories to be exact, about 40 percent of the total criteria—Wheat and his company instead chose forgery over rectification. They concocted a phony certificate from a non-existent company called PharmaTech Consulting, listed one of Wheat’s former attorneys as the head, and forged the attorney’s signature to solidify their con.
According to statements from U.S. Attorney Theodore S. Hertzberg, the false documentation created by Hi-Tech and Wheat misled customers significantly. Many of these customers, none the wiser, passed along the fabricated documents to foreign regulators, which allowed Hi-Tech's products access to markets overseas under the pretense of GMP compliance. The fraudulent activity, which spanned from 2011 to 2013, resulted in Hi-Tech pocketing at least $4,763,292 from unsuspecting customers.
The prosecution of this case was bolstered by a collaborative effort among law enforcement bodies, including the Food and Drug Administration (FDA) Office of Criminal Investigations and the IRS Criminal Investigation Department. Kelly McCoy, acting Special Agent in Charge from the FDA’s Office of Criminal Investigation, emphasized the danger of fabricating claims about FDA-regulated products, as they pose a significant threat to public health and safety. The IRS CI, represented by Special Agent in Charge Demetrius Hardeman, noted the agency's proficiency in following the money to expose complex laundering schemes such as those employed by Hi-Tech Pharmaceuticals.
With verdicts now handed down, Jared Wheat is staring down the barrel of a potential twenty-year prison sentence followed by supervised release. For Hi-Tech, the consequences could align with fines up to twice the illicit gains garnered from their offenses and probation for five years. Though a sentencing hearing before U.S. District Judge Amy Totenberg is pending, the message to the industry is stark: companies and individuals that engage in such fraudulent activities will face severe repercussions.
