The government has recommended a three-year prison sentence for Kristian Rhein, the veterinarian embroiled in the MediVet Equine practice that marketed and sold “an adulterated and misbranded performance-enhancing drug,” they revealed in papers filed Wednesday in U.S. District Court.
Rhein was one of 27 people charged in a widespread doping scheme of Thoroughbred racehorses on Mar. 9, 2020 that included trainers Jason Servis and Jorge Navarro.
United States Attorney Damian Williams, in papers filed with Judge Mary Kay Vyskocil in her court in the Southern District of New York, wrote, “The parties' stipulated Guidelines sentence is the statutory maximum sentence of 36 months' imprisonment. In light of the Section 3553(a) factors discussed below, that is the appropriate sentence in this case, and one necessary to serve the goals of sentencing. The Government respectfully submits that the stipulated Guidelines sentence of thirty-six months' imprisonment is sufficient, but not greater than necessary, to serve the legitimate purposes of sentencing set forth in Title 18, United States Code, Section 3553(a).”
Williams's sentencing recommendation sums up their case again Rhein as such: “Rhein, a licensed racetrack veterinarian who predominantly catered to racehorse trainers exploited the deference typically offered to licensed veterinarians in order to peddle SGF-1000-in which he held a financial interest-which was not approved by the Food and Drug Administration (“FDA”) or created pursuant to “good manufacturing practices,” and the administration of which did not comply with applicable racing rules. Rhein actively marketed, sold, and administered SGF-1000 for the non-medical purpose of illicitly improving racehorse performance. That is, Rhein doped horses in an effort to scam others through a prolific fraud. Rhein, through his veterinary practice, further illegally distributed the prescription drug clenbuterol, providing it to trainers in bulk to administer to their horses, without issuing valid prescriptions for that drug, or otherwise administering that drug due to a medical need.”
The submission further states that “Rhein and his co-conspirators did not know the precise chemical contents of SGF-1000, yet marketed the product as one containing growth factors, and believed that, irrespective of its contents, it would enhance a horse's performance and be untestable on standard drug tests.”
Rhein has agreed to forfeit a total of $1,021,800, $671,800 of which is due at or before the time of sentencing, which represents the value of the distributed drugs. He has also agreed to pay restitution to other “victims of the offense,” the filing reads, in the amount of $729,716, the total amount of payments he received from owners by concealing his billing for the drugs by billing for acupuncture, among other things. Williams writes that the Government intends to submit a proposed restitution order and a schedule of victims at or before Rhein's sentencing.
Williams's submission details Rhein's attempts to conceal his activities from doping controls.
He writes, “Notably, beginning at least in June 2019, Rhein grew concerned regarding mounting regulatory scrutiny of SGF-1000, and shared this concern with others at MediVet. On June 5, 2019, Jason Servis informed Rhein that Maximum Security had received a dose of SGF-1000 shortly before an unannounced drug test, and Rhein quickly reassured Servis that the drug would not test positive. Rhein stated to Servis: `Yeah no no no the Jockey Club tested it and I met the guy who tested it way back when. It comes back as collagen. They don't even have a test for it. . . . [I]'ve had at least three different times it's been tested on horses that I have it the day before and nothing. Not a word. . . . There's no test for it in America. There's no testing. There's nothing. There's nothing you did that would test.' Rhein—despite not knowing the precise contents of SGF-1000 at that time—nonetheless assuaged Servis's concerns, not by saying SGF-1000 was legal or permissible (which it was not), but by saying SGF-1000 would not be detectable on a drug test. In Rhein's mind, it was immaterial whether he was following the letter of the racing rules or the law, because he believed neither he nor his customers would ever get caught. The following day, Rhein and Servis resumed their discussions of SGF-1000, and Rhein noted his belief that `somebody squealed' regarding his use of that drug.”
As the scrutiny from authorities became greater, Williams writes, “Rather than cease sales of SGF-1000 in the face of this scrutiny, approximately one week after others at MediVet sounded the alarm regarding potential federal charges, Rhein discussed with Kegley how they could tweak the labeling of SGF-1000, so as to make it appear innocuous. Rhein specifically related his suggestion: 'we gotta think of re-branding if it goes sideways.' Rhein brainstormed calling SGF-1000 by a new name: “What was the (expletive deleted) name that somebody told me? It was a good name. It was kinda cheesy, but (expletive deleted) it was a good, it was a one-word name, like . . . you know like . . . like Encore, something like that. . . . Repair . . . RepairRx. Like Repair Treatment . . . And what you do is you just say it's a preventative. It's preventative.” Despite the fact that SGF-1000 is an injectable drug whose precise contents were then-unknown to Rhein, Rhein agreed with Kegley that it should be described as a `dietary supplement for equine.'”
After Rhein learned in 2019 that Servis had been approached by law enforcement, and after the New York Gaming Commission specifically banned it, MediVet representatives provided information to the Racehorse Medication Testing Consortium (RMTC) which did not report the positive findings for low levels of ace promazine and other drugs. “While Rhein was grappling with the existential threats to his sales of SGF-1000, he continued his equally illicit practice of distributing prescription clenbuterol to trainers without issuing valid prescriptions, and concealed that conduct by issuing fraudulent bills concealing costs of clenbuterol that were paid by racehorse owners,” Williams writes.
Rhein pleaded guilty on Aug. 3, 2021. No date for sentencing has been set.
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