FTC Busts Another Diet Pill Company

[Erik]

A federal court has ruled Hi-Tech Pharmaceutical (www.hitechpharma.com ) and related defendants—National Urological Group (a.k.a. Warner Laboratories), the National Institute for Clinical Weight Loss Inc., Dr. Terrill Wright, and corporate officers Jared Wheat, Thomasz Holda, Michael Howell and Stephen Smith—are responsible for paying about $15.8 million on charges it violated the FTC act via false advertising and unsubstantiated claims for several weight-loss products. The court has also approved a permanent injunction against Wright, a physician associated with the online pharmacies, as well as a fine of $15.4 million for his ill-gotten gains.

Can’t Trust A Doctor?

In the case against Dr. Wright, FTC accused the physician of making “numerous false and unsustainable endorsements that afforded the product an air of clinical safety that it otherwise may not have had.” The court rejected Dr. Wright’s defense that FTC cannot prove he will violate the law again. In fact, FTC showed that Dr. Wright violated the law in the past and continues and continues to make false claim endorsements for Hi-Tech and the other companies, including making some of the same claims in the case at hand.

Final Comments

The fine of 15.4 million dollars seems like a huge amount but it’s nothing compared to the revenue Hi-Tech generated in a very short period of time. Aggressive advertising claims result in massive increases in sales in all instances, but eventually you have to pay the piper. Crafty supplement owners channel money into offshore accounts or “shell” companies prior to being “caught” by the FTC.

[Erik]

More on Hi-Tech Pharmaceuticals:

The Rap Sheet of crazy new allegations being brought against the company and it’s former employees:

The Hi-Tech Pharmaceuticals Rap Sheet

* Plotting to kill an FDA agent.
* Blackmailing an assistant U.S. attorney.
* Hi-Tech Pharmaceuticals co-founder is jailed for possession of a “firearm silencer.”
* Using the herbal stimulant ephedra in diet pills after the FDA banned its use.
* Selling supplements that actually contained the active ingredients of prescription drugs to increase the potency of the product.
* Importing and selling steroids.
* Manufacturing phony ecstasy tablets that were sold on U.S. streets.
* Creating a muscle-building GHB drink but cleverly marketing it as a cleaning solution for your floors in an effort to mislead investigators.

[Blondell]

A couple of Hi-Tech products are da bombdiggity. :lol:

Lipodrene and Fastin (which they sent me free :hehe:) both work nicely on suppressing appetite. :nod:

[Blondell]

* Selling supplements that actually contained the active ingredients of prescription drugs to increase the potency of the product.


I've always thought this was going on!! :funny:

I'm telling you!! Some of their stuff is just too good to be legal. :lol:

[Erik]

Update on this story ...

Employees once working at Georgia-based supplement company “Hi Tech Pharmaceuticals (http://hitechpharma.com/) ” makers of the very popular Fastin , Lipodrene , and Stamina Rx supplements, have now gone to trial and things aren’t looking good for these dudes! The company itself, as well as Jared Wheat, Stephen Smith, Tomasz Holda, and “Mr. GHB” Sergio Oliveira all pleaded guilty to conspire to import and distribute adulterated, mislabeled and unapproved new drugs, and to commit mail and wire fraud. If you’ve been around the bodybuilding industry for a while you may recognize Sergio Oliveira as the former owner of BODY International magazine and a guy that’s pushed the supposed “health” benefits GHB, GBL, and other GHB precursors to unsuspecting bodybuilders for years.

United States Attorney David E. Nahmias said of the pleas,

“These defendants set up an offshore manufacturing facility where, in unsanitary conditions, they reproduced leading pharmaceutical products for importation into the United States, all without FDA approval or licensing from the rightful patent holders. Their motive in flouting the law, violating patents and exposing their customers to unknown health risks was greed, pure and simple. I commend the FDA and the DEA for their thorough investigation in this case. The Department of Justice and these agencies will continue to work hard to protect American consumers from such fraudsters.”

FDA Office of Criminal Investigations Special Agent In Charge David Bourne said,

“As in this conviction, the FDA’s Office of Criminal Investigations actively pursues those who deceive the public by manufacturing and selling unapproved and unregulated medications which may pose risks to the health of consumers. We are committed to investigating and preventing those who use trickery and deceit to illegally and unscrupulously sell medications over the internet at the expense of the public health.”

According to Nahmias and the information presented in court: The defendants in this case established a manufacturing facility in a small park in rural Belize. Inside what was essentially a four-room home, the defendants produced unauthorized generic versions of such popular prescription pharmaceuticals as Xanax, Valium , Ambien , Vioxx , Zoloft , Viagra , and Cialis . The manufacturing processes complied with none of the sanitary, hygienic, or quality-control regulations issued by the FDA, nor had the defendants obtained approval from the FDA or licenses from the patent-holders to make such drugs. Nonetheless, the defendants made the drugs and marketed them, primarily via the internet, to customers in the United States and elsewhere. The drugs were made available without prescription and also without disclosure of the unsanitary manufacturing conditions. The defendants realized millions of dollars of sales before the scheme was initially disrupted by Belizean authorities and ultimately ended by U.S. authorities.

United States District Court Judge Jack T. Camp accepted today’s guilty pleas in federal court in Newnan. All defendants pleaded to conspiring to violate federal prohibitions against mail and wire fraud and the importation and distribution of adulterated, unapproved, and mislabeled drugs. This conspiracy offense carries a maximum penalty of five years in prison and a maximum fine of $250,000 . The company itself will face a maximum of five years on probation and a fine of the greater of $500,000 or double the fraud amount. Sentencing for the defendants is now set for October 21, 2008. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines.

[Blondell]

That's like a slap on the wrists for these guys. Interesting info. Thanks for the update, Erik.

[liz jaeger]

Update on this story ...

Employees once working at Georgia-based supplement company “Hi Tech Pharmaceuticals (http://hitechpharma.com/) ” makers of the very popular Fastin , Lipodrene , and Stamina Rx supplements, have now gone to trial and things aren’t looking good for these dudes! The company itself, as well as Jared Wheat, Stephen Smith, Tomasz Holda, and “Mr. GHB” Sergio Oliveira all pleaded guilty to conspire to import and distribute adulterated, mislabeled and unapproved new drugs, and to commit mail and wire fraud. If you’ve been around the bodybuilding industry for a while you may recognize Sergio Oliveira as the former owner of BODY International magazine and a guy that’s pushed the supposed “health” benefits GHB, GBL, and other GHB precursors to unsuspecting bodybuilders for years.

United States Attorney David E. Nahmias said of the pleas,

“These defendants set up an offshore manufacturing facility where, in unsanitary conditions, they reproduced leading pharmaceutical products for importation into the United States, all without FDA approval or licensing from the rightful patent holders. Their motive in flouting the law, violating patents and exposing their customers to unknown health risks was greed, pure and simple. I commend the FDA and the DEA for their thorough investigation in this case. The Department of Justice and these agencies will continue to work hard to protect American consumers from such fraudsters.”

FDA Office of Criminal Investigations Special Agent In Charge David Bourne said,

“As in this conviction, the FDA’s Office of Criminal Investigations actively pursues those who deceive the public by manufacturing and selling unapproved and unregulated medications which may pose risks to the health of consumers. We are committed to investigating and preventing those who use trickery and deceit to illegally and unscrupulously sell medications over the internet at the expense of the public health.”

According to Nahmias and the information presented in court: The defendants in this case established a manufacturing facility in a small park in rural Belize. Inside what was essentially a four-room home, the defendants produced unauthorized generic versions of such popular prescription pharmaceuticals as Xanax, Valium , Ambien , Vioxx , Zoloft , Viagra , and Cialis . The manufacturing processes complied with none of the sanitary, hygienic, or quality-control regulations issued by the FDA, nor had the defendants obtained approval from the FDA or licenses from the patent-holders to make such drugs. Nonetheless, the defendants made the drugs and marketed them, primarily via the internet, to customers in the United States and elsewhere. The drugs were made available without prescription and also without disclosure of the unsanitary manufacturing conditions. The defendants realized millions of dollars of sales before the scheme was initially disrupted by Belizean authorities and ultimately ended by U.S. authorities.

United States District Court Judge Jack T. Camp accepted today’s guilty pleas in federal court in Newnan. All defendants pleaded to conspiring to violate federal prohibitions against mail and wire fraud and the importation and distribution of adulterated, unapproved, and mislabeled drugs. This conspiracy offense carries a maximum penalty of five years in prison and a maximum fine of $250,000 . The company itself will face a maximum of five years on probation and a fine of the greater of $500,000 or double the fraud amount. Sentencing for the defendants is now set for October 21, 2008. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines.

Well, the good thing is that US Probation is the one who figures sentencing and makes the sentencing recommendation to the judge - they have to follow guidelines - there is no option - they are usually pretty strict and just b/c it is "white collar" does not mean they will not get a prison sentence - I know several cases where people have gotten prison terms in white collar cases and these people had no prior criminal history ...