On Heels of Criminal Indictment, Judge Prohibits Hi-Tech from Selling DMAA

Hi-Tech and its owner, Jared Wheat, have been charged by a grand jury with 18 criminal counts.

Josh Long, Associate editorial director, SupplySide Supplement Journal

October 5, 2017

3 Min Read
On Heels of Criminal Indictment, Judge Prohibits Hi-Tech from Selling DMAA

A U.S. magistrate judge on Wednesday entered an order, preventing Hi-Tech Pharmaceuticals Inc. from manufacturing, distributing or selling products containing DMAA or its chemical equivalent, coinciding with the unsealing of a criminal indictment against the Georgia-based manufacturer of dietary supplements.

According to court documents, Hi-Tech and its chief executive officer and owner, Jared Wheat, have both been charged by a grand jury with 18 criminal counts in a superseding indictment, including allegations of wire fraud, money laundering and introducing misbranded drugs into interstate commerce.

A third defendant who was named in the indictment—John Brandon Schopp, who worked as director of contract manufacturing for Hi-Tech—also was charged with one count of conspiracy to commit wire fraud and two counts of wire fraud.

Earlier this summer in a separate civil case involving FDA, Hi-Tech and Wheat filed a notice of appeal with the U.S. Court of Appeals for the Eleventh Circuit. A federal judge ruled in April that DMAA—also known as 1,3-dimethylamylamine—did not qualify as a dietary ingredient, and that Hi-Tech’s products containing the substance were adulterated.

In a one-page order dated Oct. 4, Magistrate Alan J. Baverman prohibited Hi-Tech from “directly or indirectly through third parties, manufacturing, distributing or selling adulterated foods or misbranded drugs, including but not limited to products containing DMAA or its chemical equivalent."

Wheat was arrested on Oct. 4 in Georgia, but he was out on bond the same day.

In a phone interview Thursday, Wheat called the charges "bogus" and suggested the criminal indictment was a rouse by the government to secure as a condition of his bond Hi-Tech’s agreement to not sell DMAA.

“At the end of the day," he said, “that whole thing was to try to get this ‘stop DMAA sale thing’ for the bond."

Baverman, the magistrate judge, noted the order was based on the government’s motion and Hi-Tech’s agreement. Wheat, however, said he planned to appeal the order with a district court judge.

“A magistrate doesn’t have injunctive power," he proclaimed. “We’re going to go back to the district court judge—now that we’ve been assigned a district judge—with a motion."

In an in-person interview last week at SupplySide West in Las Vegas, Wheat expressed cautious optimism that he could reach an agreement with FDA on the DMAA case during upcoming mediation.

“There’s some hope," he told INSIDER, “we may be able to reach a resolution with FDA that we could both live with."

Now, Wheat—and Hi-Tech—face another court battle with even higher stakes: an 18-count criminal indictment that supersedes an earlier nine-count indictment filed in June against the three defendants.

The earlier indictment charged the three defendants with one count of conspiracy to commit wire fraud and two counts of wire fraud. Wheat and Hi-Tech also were indicated on one count of money laundering conspiracy and five counts of money laundering.

FDA and the U.S. Department of Justice declined to comment on the superseding indictment. Carl Lietz, an attorney representing Schopp, did not immediately respond to a request for comment.

The criminal case is before the U.S. District Court for the Northern District of Georgia, Atlanta Division, No. l:17-CR-0229.

Editor’s note: Steve Myers contributed reporting for this article.

 

About the Author

Josh Long

Associate editorial director, SupplySide Supplement Journal , Informa Markets Health and Nutrition

Josh Long directs the online news, feature and op-ed coverage at SupplySide Supplement Journal (formerly known as Natural Products Insider), which targets the health and wellness industry. He has been reporting on developments in the dietary supplement industry for over a decade, with a focus on regulatory issues, including at the Food and Drug Administration.

He has moderated and/or presented at industry trade shows, including SupplySide East, SupplySide West, Natural Products Expo West, NBJ Summit and the annual Dietary Supplement Regulatory Summit.

Connect with Josh on LinkedIn and ping him with story ideas at [email protected]

Education and previous experience

Josh majored in journalism and graduated from Arizona State University the same year "Jake the Snake" Plummer led the Sun Devils to the Rose Bowl against the Ohio State Buckeyes. He also holds a J.D. from the University of Wyoming College of Law, was admitted in 2008 to practice law in the state of Colorado and spent a year clerking for a state district court judge.

Over more than a quarter century, he’s written on various topics for newspapers and business-to-business publications – from the Yavapai in Arizona and a controversial plan for a nuclear-waste incinerator in Idaho to nuanced issues, including FDA enforcement of the Dietary Supplement Health and Education Act of 1994 (DSHEA).

Since the late 1990s, his articles have been published in a variety of media, including but not limited to, the Cape Cod Times (in Massachusetts), Sedona Red Rock News (in Arizona), Denver Post (in Colorado), Casper Star-Tribune (in Wyoming), now-defunct Jackson Hole Guide (in Wyoming), Colorado Lawyer (published by the Colorado Bar Association) and Nutrition Business Journal.

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