The Week in Review: Feds: Even Those Sold It Did Not Know Contents of SGF-1000

This past summer, Michael Kegley Jr. and Kristian Rhein both pled guilty to felony drug adulteration and misbranding charges in the alleged international Thoroughbred doping conspiracy case. That means they'll avoid trials prior to their sentencings. But it doesn't mean that the voluminous cache of evidence that prosecutors would have used against them won't ever see the light of day.

In fact, just last week, the feds disclosed intriguing documentation about SGF-1000, the adulterated and misbranded purportedly performance-enhancing drug (PED) that was an elixir of choice for now-barred trainer Jorge Navarro, who admitted to injecting it into his horses when he pled guilty in August to one felony drug count. SGF-1000 allegedly also served as “juice” for fellow ruled-off conditioner Jason Servis, but he's still fighting his felony doping charges, even after being implicated by other defendants and allegedly being caught on intercepted phone calls discussing his wide-ranging use of PEDs.

The new intel about SGF-1000 arrived Nov. 15 in the form of a sentencing report for Kegley submitted by the government in advance of his Jan. 6 appearance in United States District Court (Southern District of New York), when he will learn his potential prison fate.

Both Kegley and Rhein are facing maximum three-year terms of incarceration. Rhein's sentencing is Jan. 5, and his report from the government is due Nov. 24.

Kegley is the former sales director for MediVet Equine, the Kentucky-based company that marketed and sold SGF-1000. Rhein is a now-suspended veterinarian formerly based at Belmont Park who has admitted that he and Servis were “leaders and organizers” of a network of associates who performed criminal actions related to doping. The feds also allegedly have Rhein taped on an intercepted phone call bragging that he sold “assloads” of SGF-1000 to racetrackers.

Soon after the arrests of 27 defendants on Mar. 9, 2020, we learned about Servis's alleged conversations with Rhein from June 2019 in which the trainer expressed fears that his purportedly doped MGISW Maximum Security would trigger a positive for SGF-1000. Rhein assured him Max wouldn't, because “they don't even have a test for it in America.”

And this past September, when prosecutors released a separate trove of wiretapped evidence, it was further disclosed that MediVet later in 2019 allegedly attempted to trick the Racing Medication and Testing Consortium (RMTC) into delisting SGF-1000 as a prohibited substance.

The government's sentencing submission from Nov. 15 fills in some previously unknown blanks about how SGF-1000 was marketed, pitched, and positioned during this time frame to maximize sales and avoid scrutiny.

$200 a bottle…but it worked

By the time SGF-1000 had landed in the crosshairs of federal prosecutors in early 2019, MediVet had already “reaped millions of dollars in revenue,” the court document stated. Part of the reason the company was able to rake in enormous profits had to do with bypassing the costs of the rigorous drug approval and registration process required by the Food and Drug Administration (FDA).

“Unlike legitimate drug manufacturers, MediVet spent no funds on studies to demonstrate to the FDA the safety and efficacy of SGF-1000,” the submission stated.

Working in tandem, Kegley and Rhein “both extolled the performance-enhancing benefits of the drug to racehorse trainers.”

Up until the spring of 2019, marketing material for SGF-1000 was routinely provided to purchasers and was readily available on MediVet's website. According to the government, its sellers emphasized “the potent effects of SGF-1000,” which were supposedly derived from “an innovative formulation consisting of Regenerative Proteins, Cytokines, Peptides, potent Growth Factors and Signaling Molecules derived from Ovine Placental Extract.”

The submission further stated that SGF-1000 was explained to trainers as being similar to a vasodilator that would “increase stamina, performance, and overall health.” The materials even listed the growth factors that were purportedly found in SGF-1000, including fibroblast growth factor and hepatocyte growth factor.

“Of course, many jurisdictions prohibited the use of such growth factors on racehorses, particularly where the growth factors are component parts of drugs that are not approved by the FDA, and administered solely to improve a horse's recovery and race performance,” the submission stated.

“Despite the advertised effects of, and ingredients in SGF-1000, the drug's appeal was rooted in the fact that it was undetectable in a horse's system through standard drug screens used in the racing industry, which Rhein repeatedly touted when discussing the drug,” the document continued.

The feds also alleged that despite what Kegley, Rhein, and other MediVet representatives claimed when they were parroting the company's marketing materials, no one pushing the product really had any accurate idea of what was in it.

“Notably, Kegley and his coconspirators did not know the precise contents of SGF-1000 until at least in or about August 2019–years after MediVet had started marketing and selling the drug,” the submission stated. “But [they] believed that no matter the component parts of the drug, it would enhance a horse's performance.”

So too, apparently did trainers. That's why they shelled out $200 a bottle for SGF-1000.

After Servis phoned Rhein on June 5, 2019, to allegedly tell him that Maximum Security had received a dose of SGF-1000 right before an unannounced drug test, “Rhein grew concerned regarding the potential for regulatory scrutiny of SGF-1000, and shared this concern with others at MediVet,” the sentencing submission stated.

The filing continued: “A few weeks later, on July 9, 2019,  Rhein and others affiliated with MediVet convened a conference call in which they discussed the potential for increased scrutiny of the drug. During that call, a participant mentioned that the federal government had prosecuted a racehorse trainer, Murray Rojas, for doping horses, citing it as an example of a case where drug use on racehorses had been pursued by governmental authorities beyond state racing commissions.

“Following the drumbeat of events indicating heightened suspicion of SGF-1000, Rhein and Kegley strategized regarding the best way to divert people's attention away from SGF-1000.

Rather than cease their sales of that drug, Kegley and Rhein instead discussed how they could tweak the labeling of SGF-1000, so as to make it appear innocuous,” the sentencing submission stated.

“You're right, it might help to re-brand it,” the feds allegedly recorded Kegley saying on a wiretap. “We won't mention the word 'growth factor' in any way shape or form…. We can even put on the box, you know, 'dietary supplement for equine.' That way it's not–no one even has to question if it's FDA-approved or not. It's strictly a supplement.”

RMTC Trickery

By the summer of 2019, the push was on at MediVet to try and convince the RMTC that this “supplement” was so harmless that it should be delisted as a banned substance.

“On August 8, 2019, a MediVet representative received a report from Industrial Laboratories reflecting a negative finding (at that time) for certain growth factors,” the court document stated.

Yet that same test did detect, among other prohibited substances, “low levels of acepromazine, levamisole, detomidine, pyrilamine, lidocaine, MEGX, xylazine, and caffeine.”

MediVet's reaction to this disturbing news?

According to the sentencing submission, it was “to request that the negative and positive findings be split into two separate reports. On Sept. 10, 2019, MediVet, through counsel, conveyed the negative findings to the RMTC, while withholding the positive findings.”

Around the same time, MediVet was feeling heat from regulators in New York who were zeroing in on SGF-1000 as an allegedly abused PED.

“In September 2019, MediVet's sales of SGF-1000 hit a significant hurdle,” the sentencing submission stated. “The New York Gaming Commission issued a notice in which it reiterated its longstanding prohibition against the use of growth factors and growth hormones on racehorses, but also specifically named SGF-1000 as a prohibited drug of the type that contained growth hormone or growth factors.”

Yet still, the court document explained, “Kegley and Rhein continued to market and sell SGF-1000” while MediVet “altered the promotional material for SGF-1000 to divert attention and mislead anyone who was unfamiliar with the prior marketing materials description of SGF-1000.”

So whereas the packaging and label for SGF-1000 in July 2019 described it as consisting of “regenerative placental proteins” and being “made in Australia,” by October the drug's description “had been altered to remove any reference to Australia, and was instead described as a 'homeopathic placental extract.'”

Yet by Oct. 14, 2019, MediVet had already learned “that a subsequent test of SGF-1000 did result in findings reflecting the presence of a specific growth factor,” the document stated.

And by the time Kegley and Rhein were arrested five months later, “the website for SGF-1000 had been scrubbed clean, removing any reference to growth factors, and much of the description regarding SGF-1000” itself.

“In short, even after Kegley and others at MediVet had reason to pause and take stock of the illegality of SGF-1000, they nonetheless continued to sell the drug,” the submission stated.

“With full knowledge that SGF-1000 was banned in New York, that a racehorse trainer had been criminally charged for doping, and that law enforcement was beginning to scrutinize the use of SGF-1000 specifically…Kegley and Rhein worked together and with others to deceptively label that drug, and to continue to sell the drug to those in the racehorse industry seeking a competitive advantage,” the document stated.

“Given the proliferation of websites that offer potent PEDs to those in the racehorse industry, similar to that operated by MediVet, a significant sentence is warranted to send a strong signal to others thinking of engaging in such criminality that there will be consequences for their crimes.

“Many actors in the racehorse industry have grown indifferent to, and dismissive of, the notion of obtaining illegal drugs to dope racehorses for profit, and assume that no serious ramifications will follow if they are ever caught,” the submission summed up.