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Nutrition firm or herbal cabal? - Crime & Punishment - MSNBC.com

 

http://www.msnbc.msn.com/id/17742469/

 

Dietary supplements firm or herbal cabal?

 

Prosecutors allege Georgia company, execs engaged in Mob tactics

 

Gregory Smith / New York Daily News

 

Jared R. Wheat, president and CEO of Hi-Tech Pharmaceuticals, poses

in front of a display of the company's products in a Dec. 22,

2005, file photo.

 

Until late last year, Hi-Tech Pharmaceuticals of Norcross, Ga., appeared

to be a thriving business with a hot-selling line of natural dietary

supplements. But in a bizarre case quietly unfolding in federal court in

Atlanta, prosecutors allege that it was really a criminal enterprise

that sold dangerous “spiked†products and was run by

executives who considered assassination and blackmail to quash a federal

investigation.

 

The allegations are the most far-ranging ever leveled against a major

player in the loosely regulated dietary supplement industry, and include

activities more at home in the Mob hangouts of television's Tony Soprano

than a corporate boardroom. Among other things, prosecutors allege in

court filings that some or all of the defendants:

Discussed killing a U.S. Food and Drug Administration agent and

blackmailing an assistant U.S. attorney. Neither plot was carried out,

but a Hi-Tech co-founder was subsequently jailed after being convicted

of being a felon in possession of a “firearm silencer.â€

 

Used the herbal stimulant ephedra in Hi-Tech diet products after the

U.S. Food and Drug Administration banned its use on April 12, 2004,

finding it presented “an unreasonable risk of illness or

injury.â€

 

Sold " herbal " supplements that actually contained the active ingredients

of prescription drugs that could interact dangerously with other

medications.

Illegally imported and sold banned steroids.

 

Manufactured phony ecstasy tablets that were sold on U.S. streets.

 

Created a muscle-building drink that was later marketed as a cleaning

solution in an effort to mislead investigators.

 

The shocking allegations spring from the Sept. 7 indictment of the

company and 11 executives, employees and associates for allegedly

operating an illegal Internet pharmacy in Belize.

 

Belize lab  ‘substandard and unsanitary’

 

The defendants used numerous Web sites to advertise and sell what were

described as generic prescription drugs from Canada but were actually

products that they were manufacturing in “substandard and

unsanitary conditions†in Belize, according to the indictment.

 

Among the substances were the steroids Oxymethelone and Stanozolol,

controlled drugs Ambien, Valium and Xanax, and prescription drugs

Viagra, Cialis, Lipitor and Vioxx, it said.

 

The indictment also charged Hi-Tech President and CEO Jared R. Wheat,

35, with operating a “continuing criminal enterpriseâ€

†" a violation of an anti-organized-crime statute that carries a

minimum penalty of 20 years in prison. In court filings, prosecutors

describe Wheat as a “lifelong drug dealer,†citing a

conviction for dealing ecstasy at the age of 19 in addition to the

current allegations.

Wheat has pleaded not guilty to all charges and Hi-Tech said in a

statement that it is " appropriately conducting its business and there is

no basis for the indictment. "

 

The case raises concerns about the safety of the company’s line

of dietary supplements, which remain available through many major U.S.

retailers, and more generally about a loosely regulated industry that

supplies nutrition products consumed by millions of Americans.

But it remains unclear to what extent the government’s charges

involve Hi-Tech products manufactured and sold in the United States

versus those made in Belize for sale over the Internet.

 

The U.S. Food and Drug Administration has not issued any safety

advisories for Hi-Tech products since the indictment. Representatives of

the FDA and the U.S. Attorney’s Office in Atlanta said they

could not discuss the ongoing criminal case.

 

The indictment generated a few headlines when it was unsealed in

September, but the case has received no attention as it has spiraled

into the sensational since then through a series of legal filings by

prosecutors.

 

Allegations that company officials discussed using violence and

blackmail in an effort to block the government’s investigation

surfaced March 21 in response to a defense motion asking the court to

allow Wheat to post bond and leave the Atlanta jail where he has been

held since his arrest on Sept. 14.

 

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The filing alleged that Hi-Tech co-founder and convicted steroid dealer

Tomasz Holda discussed with Wheat, Hi-Tech Vice President Stephen D.

Smith and others “obtaining a firearm silencer for use in

attacking an FDA agent conducting a criminal investigation into

Hi-Tech’s use of Viagra in its Stamina Rx product.â€

The prosecution filing said that while the FDA agent was not harmed,

“It is important to note that in June 2004, Defendant Holda

purchased a silencer on the Internet for delivery to his home. This

silencer was intercepted by U.S. Customs and Defendant Holda was

prosecuted and ultimately pleaded guilty to being a felon in possession

of a firearm silencer.â€

 

The timing of the alleged threat was not specified, but the reference to

Stamina Rx appears to refer to an FDA complaint brought against Hi-Tech

in late 2002. The complaint charged, among other things, that the

company used the prescription-strength drug ingredient tadalafil †"

the active ingredient in the erectile-dysfunction product Cialis †"

in what it marketed as a natural dietary supplement. Hi-Tech agreed the

following year to FDA supervision of its product labeling and marketing,

but admitted no wrongdoing in the alleged mislabeling of Stamina

Rx’s ingredients.

 

CONTINUED: SERVING TIME FOR POSSESSION OF SILENCER

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