Norcross company president pleads guilty to conspiracy

The president of Norcross-based Hi-Tech Pharmaceuticals pleaded guilty on Friday to a conspiracy charge, ending a two-year federal investigation into the illegal importation of knockoff prescription drugs from Central America.

Jared Wheat, 36, of Alpharetta, is expected to serve about two years in jail, said the company’s lawyer, Arthur Leach. He pleaded guilty to conspiring to commit mail fraud, wire fraud and the introduction of adulterated and unapproved new drugs.

Details of the plea agreement, including specifics on jail time, were not immediately available. But Leach said the government will keep $3 million in cash seized in September 2006 when Wheat was arrested, far short of the $19.8 million forfeiture originally sought by prosecutors.

The 2006 indictment charged 11 people with illegal selling about 24 kinds of misbranded, adulterated pills over the Internet.

Prosecutors said the company used spam e-mails to market cheap, generic drugs supposedly made in Canada.

Hi-Tech instead allegedly produced the drugs in unsanitary conditions in Belize and shipped them to individual customers and wholesalers, prosecutors said.

The drugs included knockoff versions of anxiety medications Valium and Xanax, as well as drugs used to treat impotence like Viagra and Cialis.

Hi-Tech still manufactures and sells herbal products advertised for losing weight, increasing sexual performance and building muscles.

Although that segment of the business has not been the subject of criminal charges, a 2004 Federal Trade Commission complaint is still pending against the company, alleging it made false claims about its weight-loss and erectile dysfunction products.

Ordering generic drugs online can be a dangerous but attractive option for some of the 47 million Americans who are without health insurance and have trouble affording medications. The AARP reported in March that brand-name drug prices increased 50 percent — more than twice the rate of inflation — from 2002 to 2007.

In court filings, prosecutors portrayed Hi-Tech as a dangerous and opulent criminal enterprise.

They accused Wheat of being a “life-long drug dealer” — he was arrested for selling the illegal amphetamine ecstasy when he was 19 years old — and the overseer of a “continuing criminal enterprise,” a charge usually associated with large-scale illegal operations that carries a minimum sentence of 20 years.

Other allegations were more sensational. Prosecutors said that Wheat and other company founders discussed using blackmail and assassination to shield Hi-Tech from federal investigation.

One co-defendant, Tomasz Holda later pleaded guilty to ordering a silencer over the Internet, although no charges were filed involving blackmail or assassination.

After its indictment, Hi-Tech accused the government of being overzealous in its investigation into the company. A November 2007 statement blamed prosecutors for the suicide of Holda’s wife, who shot herself after allegedly being threatened with criminal charges.

The government originally sought forfeitures totalling $19.8 million cash, 27 bank accounts, 17 pieces of real estate and 15 vehicles, including a 2006 Maserati sports car.

With the stakes so high, Leach, the company’s lawyer, said the defendants decided not to “roll the dice” in a trial He described the plea as “a way to put these series of events behind us and move on with life.”

Several Hi-Tech employees have previously been charged with drug-related offenses. The Federal Trade Commission accused one, David Brady, with falsifying medical research used to market medications for sexual impotence in 1998. Holda was convicted of steroid possession with intent to distribute the same year.