Federal officials on Tuesday announced fraud charges against dietary supplement companies, saying products billed as natural were oftentimes synthetic and toxic.
Dallas-based USPlabs and several executives where charged with conspiracy to import ingredients from China and making false statements as to their source. The company sold widely popular workout and weight-loss supplements under names including Jack3d and OxyElite Pro.
SK Laboriatores, which produces supplements for USPlabs, was also charged.
"Defendants sometimes tested the products on themselves and sold the ones that made them feel good," Benjamin Mizer, a principal deputy assistant attorney general told a news conference. "With one product, defendants allegedly recognized that the substance could potentially cause liver toxicity, but without causing conducting a single test, they went ahead and sold."
An outbreak of liver injuries associated with the Oxy Pro new formula resulted, leading to several cases of jaundice and the need for life-saving transplants for some, Mizer said.
Two years ago, after OxyElite Pro had been connected to the outbreak, USP told the Fodd and Drug Administration it would stop distributing the supplement. Instead, the company worked to unload as much of the product as it could as quickly as possible, according to an 11-count indictment unsealed Tuesday.
Jacobo Geissler, chief executive of USPlabs, and Jonathan Doyle, its president, were among the six people charged in the case, with four of the defendants arrested on Tuesday and two others set to surrender, officials said. Along with the arrests, federal agents seized assets in dozens of investment accounts, real estate in Texas and a number of luxury and sports cars.
Shares of dietary supplement retailers GNC Holdings (GNC) and Vitamin Shoppe (VSI) dropped significantly ahead of the afternoon news conference at the Department of Justice. Neither company was charged in the case, but both sell USPlabs supplements on their websites.
Representatives for GNC and Vitamin Shoppe did not return requests for comment.
Oregon Attorney General Ellen Rosenblum last month filed a lawsuit against GNC, alleging it sold products containing two illegal synthetic drugs. GNC dismissed the charges as "without merit," and said it had filed a motion to move the case to federal court.
GNC in March reached an agreement with New York's attorney general on testing standards for its herbal supplements.
In a related development, the Federal Trade Commission on Tuesday said it had filed suit in federal court to stop a dietary supplement marketer Sunrise Nutraceuticals from making misleading claims, including that its product, Elimidrol, could cure people addicted to prescription pain medications and illegal drugs such as heroin.
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