September 20th, 2006 13:21 EST
11 Individuals Indicted for Generic Pill Fraud Scheme
ATLANTA – The DEA today announced that 11 individuals and an Atlanta-based company have been indicted by a federal grand jury on multiple felony charges relating to a scheme to sell adulterated and unapproved new drugs over the Internet. Four of the defendants were scheduled to appear at a bond hearing before U.S. Magistrate Linda Walker today at 1:45 P.M. EDT.
“The indictment’s allegations are disturbing because customers thought they were getting legitimate and safe prescription drugs over the Internet from Canada at cheaper prices, when in reality they received adulterated fakes that were crudely made in an unsanitary house in Belize,” said U.S. Attorney David E. Nahmias.
The defendants named in the indictment are Jared Robert Wheat, 34, of Alpharetta, Ga.; David Dalton Johnson, 37, of Pinehurst, N.C.; David Alan Brady, 40, of Pinehurst, N.C.; Stephen Douglas Smith, 38, of Duluth, Ga.; Thomas Holda, 43, of Duluth, Ga.; Sergio Ronaldo Oliveira, 46, of Hoschton, Ga.; Brad Neal Watkins, 38, of Birmingham, Ala.; David Watkins, 40, of Norcross, Ga.; Steven Blinder, 42, of Aberdeen, S.D.; Michelle Young, 38, a citizen of Belize; Guillermo Pech, 28, also a citizen of Belize; and Hi-Tech Pharmaceuticals, a company based in Norcross, Ga.
All of the defendants are charged with two different conspiracies: (1) conspiring to import controlled substances into the U.S.; and (2) conspiring to violate the wire and mail fraud statute and to introduce into interstate commerce adulterated and misbranded prescription drugs. The indictment charges each of the defendants, except David Watkins, Brad Watkins and Steven Blinder, with different substantive violations including mail fraud, distribution of controlled substances and introducing adulterated and misbranded new drugs. The indictment also charges the lead defendant, Jared Wheat, with engaging in a continuing criminal enterprise. The indictment seeks to forfeit numerous properties, automobiles and bank accounts, and seeks a money judgment of not less than $19.8 million. According to the indictment, Jared Wheat, the principal owner of Hi-Tech Pharmaceuticals, and the other defendants opened a drug manufacturing facility in Belize in approximately 2002. The defendants allegedly used Hi-Tech funds and Jared Wheat’s own funds to cover the costs of operating the Hi-Tech facility in Belize, and would travel to Belize to manufacture various prescription and controlled substances. The defendants allegedly made approximately 24 different drugs that they marketed through so-called “spam” advertisements over the Internet as authentic generic versions of those drugs being imported from Canada. The drugs included steroids such as “Oxymethelone” and “Stanazolol,” along with unapproved versions of controlled drugs such as “Ambien,” “Valium,” and “Xanax.” The defendants also manufactured versions of prescription drugs such as “Viagra,” “Cialis,” “Lipitor” and “Vioxx.” From 2002 through 2004, the defendants allegedly ordered enough active ingredients to manufacture millions of pills, many of which were then shipped into the United States to individuals who purchased the drugs after receiving Internet “spam” and also to various wholesalers of drugs.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government's burden to prove each defendant's guilt beyond a reasonable doubt at trial.This case is being investigated by Special Agents of the DEA and the Food and Drug Administration’s Office of Criminal Investigations, with the Henry County Police Department. Valuable assistance has been provided by the Bureau of Alcohol, Tobacco and Firearms (ATF), the Customs and Border Protection Foreign Mail Facility in Miami, the Postal Inspection Service, Doraville Police Department, Roswell Police Department, City of Atlanta Police Department, Spalding County Sheriff's Office, Cobb County Sheriff's Office, Clarkston Police Department, East Point Police Department and the Duluth Police Department.
Assistant U.S. Attorneys Aaron M. Danzig, Randy S. Chartash and J. Russell Phillips are prosecuting the case.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government's burden to prove each defendant's guilt beyond a reasonable doubt at trial.