Former Revolutions Medical Corp. Executives Indicted on Money Laundering Charges

Two former employees of a South Carolina syringe manufacturer have been indicted on securities fraud and conspiracy charges, the U.S. Attorney’s Office revealed.

Rondald L. Wheet, 51, and Byron Scott Key, 45, both of Mount Pleasant, S.C., are accused of fraudulently issuing shares of company stock and providing false statements to the U.S. Securities and Exchange Commission (SEC). Authorities also charged Key with two counts of money laundering, an offense punishable by up to five years in prison. Wheet, former CEO of Revolutions Medical Corp., faces a maximum 80-year prison term, while Key — the firm’s investor relations representative and assistant sales manager — could be imprisoned for up to 120 years if convicted. The pair also could be forced to reimburse the federal government $1 million in alleged profits from their scheme. 

In announcing the indictment, U.S. Attorney Bill Nettles said “[t]his district is applying significant resources to Securities and Exchange Commission cases. The mission of enforcing SEC cases is essential to a stable economy.”

The federal indictment contends that Wheet and Key fraudulently issued more than 1.2 million shares of Revolution Medical stock to 11 unnamed people by filing false statements to the SEC. Those statements, prosecutors allege in the indictment, claimed the stock was issued as a payment for consulting work and other services. Both men are accused of creating fraudulent consulting agreements to support the filings. “The statements and representations were false because, as Byron Scott Key and Rondald L. Wheet then and there knew, no such services had in fact, been rendered, the consultant agreements were a shame, and no shares of stock were issued pursuant to any consultant agreement,” the indictment states.

Wheet and Key also are charged with filing false stock registration statements with the SEC on at least five occasions. They are scheduled to be arraigned on the charges on Feb. 24 in U.S. District Court in Charleston, S.C.

The case was investigated by agents of the Federal Bureau of Investigation (FBI) and is assigned to Assistant United States Attorney Dean H. Secor of the Charleston office for prosecution.

The indictment was handed down three months after a civil case against Wheet and the company ended in a mistrial. That case was triggered by a lawsuit accusing Wheet of using news releases to mislead investors into believing its main product — a retractable syringe — was close to commercialization. The news releases allegedly enabled Wheet and Revolutions Medical to borrow roughly $1 million from a Boston, Mass., hedge fund at lower prices, as investors thought the company had pending deals for the syringe with the U.S. military and distributors worldwide. However, Wheet knew the syringe was unsafe and could not pass U.S. Food and Drug Administration regulations, according to the lawsuit. The “misleading” information triggered a surge in Revolutions Medical’s stock price.

Wheet denied any wrongdoing in the civil case, claiming he did not issue false press releases.