A federal jury in Georgia convicted Jared Wheat (53, of Alpharetta) of wire fraud while also convicting his company Hi-Tech Pharmaceuticals of wire fraud conspiracy, wire fraud, money laundering conspiracy, and money laundering in connection with a $4.7 million scheme.

According to charges and information presented at trial, Hi-Tech allegedly fabricated documents to deceive customers into believing the company was compliant with Good Manufacturing Practices (GMPs).

Wheat was acquitted of 10 other federal fraud, money laundering, and drug misbranding charges, according to the Atlanta Journal-Constitution.

A sentencing hearing has not yet been scheduled but Wheat faces a maximum of 20 years of imprisonment followed by three years of supervised release. Hi-Tech faces a fine of up to twice the value of the criminal proceeds involved in the offenses, which could total nearly $10 million, and probation of up to five years.

Wheat has a long legal history. He was previously convicted of drug trafficking conspiracy in the U.S. District Court for the Northern District of Alabama in 1991, and he was convicted of conspiracy to commit mail and wire fraud and to introduce misbranded, adulterated, and unapproved drugs into interstate commerce in the U.S. District Court for the Northern District of Georgia in 2009. 

This latest case was also in the Northern District of Georgia.

“After two prior federal felony convictions, Wheat yet again put profits over product quality and consumer safety by forging documents purporting to show that an independent, third-party audit company had certified Hi-Tech as complying with Good Manufacturing Practices,” said U.S. Attorney Theodore S. Hertzberg. “As a result of the defendants’ deceit, Hi-Tech received millions of dollars from customers who relied on the fabricated documents. The defendants’ fraudulent scheme was uncovered through years of dedicated investigation and collaboration among law enforcement partners, and the verdict signals that companies that lie will face stern consequences.”

“Making fraudulent claims about FDA-regulated products shows a reckless disregard for public health and safety,” said FDA Office of Criminal Investigation Acting Special Agent in Charge Kelly McCoy. “We remain committed to pursuing and bringing to justice those who misrepresent key aspects of their products to unsuspecting customers.”

“Hi-Tech’s conviction for money laundering provides the expected outcome for any business engaging in this illegal activity,” said Demetrius Hardeman, special agent in charge, IRS Criminal Investigation, Atlanta Field Office. “IRS-CI special agents are experts at following the money to uncover the various money laundering schemes carried out by business entities or criminals to hide illegal profits, including their use of layering, cyber laundering, and shell companies.”

Wheat is the founder, owner, and CEO of Hi-Tech, a dietary supplement company that claims to have $100 million in annual revenue.

According to Hertzberg, the charges, and information presented at trial, in November 2010, the Defendants retained a reputable third-party audit company to inspect its facilities, and the audit identified serious deficiencies in Hi-Tech’s operations.

Instead of fixing the quality and safety issues, Wheat and Hi-Tech allegedly fabricated a certificate in March 2011 purportedly issued from a company called PharmaTech Consulting stating that Hi-Tech complied with GMP. The defendants listed one of Wheat’s former attorneys in Belize as the General Manager of PharmaTech and forged the attorney’s signature on the certificate. The defendants did not disclose that PharmaTech was owned by Wheat, had conducted no inspection or audit of Hi-Tech, and was not an independent third-party auditor. 

In addition, Hi-Tech allegedly doctored the inspection report issued by the third-party audit company to make it appear that PharmaTech had issued a favorable audit report.

Hi-Tech also allegedly fabricated FDA export certificates by altering dates and product names. Between 2011 and 2013, Hi-Tech sent fraudulent PharmaTech audit reports and GMP certificates, as well as Certificates of Free Sale, to its customers on dozens of occasions. 

In many cases, customers forwarded the fraudulent documents to foreign regulators, which permitted Hi-Tech products to be sold abroad based on the fabricated certifications of its compliance with GMP, according to investigators. From March 2011 through April 2013, customers who received the fraudulent documents paid at least $4.7 million to Hi-Tech.