Two executives facing fraud and other charges related to Charleston-based Revolutions Medical Corp. pleaded not guilty Wednesday during an arraignment in federal court. Rondald Wheet, the syringe maker’s former CEO, and Bryon Scott Key, former investor relations representative, are free on $50,000 unsecured bonds set by Magistrate Judge Mary Gordon Baker.
Both men are accused of fraudulently issuing shares of company stock and making false statements to the U.S. Securities and Exchange Commission.
Scott also faces two charges of money laundering.
Charleston lawyer Lindsey Cooper represented Key, and lawyer Bart Daniel, also of Charleston, represented Wheet in Wednesday’s arraignment hearing. Cooper and Daniel said they will let the court know by March 9 whether they will be representing the men in further proceedings.
An indictment issued earlier this month alleges that Wheet and Key fraudulently issued more than 1.2 million shares of Revolutions Medical stock, which were traded over the counter, to at least 11 unnamed individuals by using falsified statements filed with the SEC.
The statements, according to the indictment, claimed the stock was issued as payment for consulting work and other services. Wheet and Key are accused of creating fraudulent consulting agreements to back up the filings.
Wheet and Key “knew no such services had in fact been rendered, the consultant agreements were a sham and no shares of stock were issued pursuant to any consultant agreement,” the indictment states.
The two men also filed false stock-registration statements with the SEC on at least five occasions, the indictment states.
Wheet faces a maximum 80-year prison sentence and Key faces a maximum 120-year prison sentence if convicted. In addition, the government is seeking nearly $1 million in restitution for money it says the pair made off the illegal scheme.
The criminal charges follow a civil lawsuit filed by the SEC against Wheet and the company. That case, which was tried last year in Atlanta, ended in a mistrial after a jury said it was deadlocked. The SEC has said it plans to retry the matter.
In the civil lawsuit, the SEC said the company issued press releases that misled investors into thinking its main product, a retractable syringe, was in the final stages of development or commercialization.
Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_