Jurors mostly acquit Atlanta businessman in yearslong fraud case

The owner of an Atlanta dietary supplement manufacturer accused of falsifying compliance certificates and selling a misbranded drug has been largely acquitted by jurors following a monthlong trial in federal court.

Jared Wheat, 53, was found guilty of a single count of wire fraud and acquitted of 10 other federal fraud, money laundering and drug misbranding charges. His company, Hi-Tech Pharmaceuticals, was found guilty of two wire fraud and three money laundering charges and acquitted on six associated counts.

Lawyers for Wheat and his company did not immediately comment on the verdict, which came Friday evening after three days of deliberations and a month of witness testimony.

Theodore Hertzberg, the U.S. attorney for Northern Georgia, said Hi-Tech and Wheat put profits over product quality and consumer safety.

“The verdict signals that companies that lie will face stern consequences,” he said Monday.

Wheat has been on a $100,000 bond since he and Hi-Tech were indicted in 2017. A sentencing date has not yet been set. Wheat faces prison, and his company could be fined millions of dollars.

Federal prosecutors said Wheat and Hi-Tech falsified export certificates, audit reports and other documents to show compliance with FDA manufacturing standards. They said Wheat and Hi-Tech also sold a dietary supplement for high blood pressure that contained a prescription medication not disclosed on the label.

As part of their case, prosecutors sought the forfeiture of about $3 million in seized bank funds.

Wheat and Hi-Tech, who pleaded guilty to similar charges in 2008, denied the latest allegations.

The trial began Oct. 22 in Atlanta. Jurors heard testimony from dozens of witnesses, including Hi-Tech employees and customers. Wheat did not testify.

The charges related to several years of activity starting in 2011, after the FDA implemented new dietary supplement rules.

Prosecutors said Wheat and Hi-Tech’s fraud allowed them to make millions of dollars by manufacturing products for other providers around the world, some of whom unwittingly provided fake documents to international regulators.

Wheat and Hi-Tech were also accused of selling a supplement called Choledrene that secretly contained lovastatin, a prescription medication for high blood pressure. Prosecutors said Hi-Tech’s recommended dosage for Choledrene — three capsules daily — contained almost twice the therapeutic dose of lovastatin, which was not disclosed on the label.

“A critical ingredient for any food and drug is trust,” prosecutor Nathan Kitchens said during his closing argument. “Jared Wheat and Hi-Tech Pharmaceuticals severed, broke and trampled on that trust.”

But Art Leach, one of eight defense attorneys in the case, said the Choledrene-related charges were ridiculous. He said the supplement contained a compound called monacolin K, which is molecularly identical to lovastatin but comes from red yeast rice.

Leach said there was no way Wheat or Hi-Tech could have known if Choledrene contained lovastatin. He said the alleged amount of lovastatin within the supplement was tiny, rebutting the accusation it was deliberately added.

“Don’t you think if we’re going to spike a product, we could have done a little bit better?” he said in his closing argument.

Leach blamed the falsified certificates on a Hi-Tech employee, Brandon Schopp, who also faces charges but is being tried separately. Leach said the case against Wheat and Hi-Tech was “regulation by prosecution” and that Wheat acted as “any other responsible CEO.”

“No one has ever been hurt by Hi-Tech products,” he told the jurors.

Kitchens said a 2010 audit of Hi-Tech revealed dozens of issues, including that employees were not following written procedures because they lacked training. He said the audit was “a bitter pill” to swallow for Wheat, who then used his own auditing company and a Belize-based attorney to fake compliance.

The money laundering charges were tied to five transactions totaling just over $1 million, Kitchens said.

In 2008, Wheat and Hi-Tech pleaded guilty to federal fraud charges accusing them of manufacturing unlicensed supplements at an unsanitary facility in rural Belize and selling them online as generic versions of prescription medications.