Justice Department and Federal Partners Announce Enforcement Actions of Dietary Supplement Cases

Justice Department and Federal Partners Announce Enforcement Actions of Dietary Supplement Cases


MR. MIZER: Good afternoon. I am Benjamin Mizer,
the Principal Deputy Assistant Attorney General for the Civil Division at the United States
Department of Justice. We are here today to explain critical steps the federal government
is taking to stem the tide of unlawful dietary supplements being sold to consumers nationwide.
Almost every day new sources on the internet, television, and in print feature stories about
the dangers of dietary supplements: A supplement is laced with an undeclared pharmaceutical
ingredient. A study is released about adverse health effects of a so-called natural remedy.
An athlete or a member of the military falls ill after taking an untested energy product.
These stories arise across the country all too often.
Consumers turn to supplements when they want to lose weight, get an edge in athletic performance,
or improve their overall well-being. From California to Maine consumers ingest pills,
powders, and liquids every day not knowing whether they are wasting money or whether
they may end up harming, rather than helping, themselves.
Unfortunately, many of these products are not what they purport to be or cannot do what
the distributors claim they can do. In some instances, consumers might be choosing supplements
over other proven therapies for serious conditions under the mistaken belief that these products
can help. I’m honored to be joined at the podium today
by my colleagues from the Federal Trade Commission, the Food and Drug Administration, the U.S.
Postal Inspection Service, the Department of Defense, and the United States Anti-Doping
Agency. Today we are announcing a sweep of actions
targeting unlawful dietary supplement makers and marketers. Over the past year we have
pursued civil and criminal cases against more than 100 makers and marketers of dietary supplements
and similar products. A centerpiece of the sweep announced today
is the indictment of USPlabs relating to widely popular workout and weight loss supplements.
Best-selling dietary supplements like Jack3d, OxyELITE Pro, and OxyELITE Pro New Formula
and Advanced Formula raked in hundreds of millions of dollars in sales.
As alleged in the indictment unsealed today, the defendants were on a perpetual search
for the next miracle ingredient. That search generally focused on Chinese chemical manufacturers.
When they found an ingredient that they believed was promising, and knowing full well how the
market for dietary supplements worked, they doctored packaging, labeling, and other paperwork
to defraud others about what the product was. Much of the alleged fraud focused on the defendants’
claims that their products were made from natural plant extracts. In truth, as one defendant
put it, “LOL, stuff is completely, 100 percent synthetic.” These fraudulent claims ensured
that the synthetic chemicals entered the United States, got on store shelves, and were purchased
by consumers. As alleged in the indictments, the defendant
falsified paperwork to stay off the radar of regulatory agencies both when the products
crossed the border and as they circulated in commerce. They made misrepresentations
to convince well-known retailers who had concerns about untested synthetic materials to sell
their products. They falsified labeling and marketing materials to convince consumers
who prized natural ingredients to buy their products.
All of these people — regulators, retailers, and consumers — trusted that the defendants
were telling the truth about their products. All of these people were deceived. This deception
put lives at risk. The indictment describes the safety testing
or, more accurately, the lack of safety testing that the defendants undertook before hocking
their factory-made supplements. For instance, the indictment alleges that the defendants
sometimes tested the products on themselves and sold the ones that made them feel good.
With one product the defendants allegedly recognized that the substance could potentially
cause liver toxicity, yet without conducting a single test to determine whether the substance
was safe they went ahead and sold it, working from the baseless assumption that they were
not using enough of the toxic substance in their products to cause problems, but there
were problems. There was an outbreak of liver injuries allegedly
associated with the OxyELITE Pro New Formula. Consumers experienced jaundice. Several needed
transplants to save their lives. How did the defendants respond? As the indictment
alleges, they promised the FDA and the public that they would stop distributing the product
at issue, but they did not. Instead, they undertook a surreptitious, all hands on deck
to sell as much of the product as they could. We are here today in part to take an important
step in holding USPlabs accountable for its actions. The indictment unsealed today charges
USPlabs in Texas, four of its executives, and one of its consultants with a series of
crimes associated with the sale of dietary supplements.
Charged with these defendants is SK Laboratories based in southern California which manufactured
many of USPlabs’ products, and one of SK Labs’ executives.
As noted, this is just one step. Whatever the outcome, I’m confident that the dedicated
men and women from the Department of Justice and the special agents from the FDA and IRS
Criminal Investigation who have worked so hard to bring us to this point will ensure
that justice is served. The allegations against USPlabs and its operators
should serve as a wake up call to the supplement industry. The unmistakable message is that
the Department of Justice and its federal partners will be vigilant when it comes to
the health and safety of the American public. Fighting illegal activity in the dietary supplement
industry is a high priority of our consumer protection agenda. The USPlabs case announced
today is only one of the many cases brought as part of the sweep that we are unveiling.
For the past year law enforcement and regulatory officials have focused efforts on many additional
products that cause high levels of concern among health officials nationwide.
Many of the cases that we have brought relate to products that misrepresent the ingredients
they contain. We have also brought cases involving products that make unsupported claims about
their effects. In numerous matters, the defendants are selling
products online through websites and touting their products to consumers for the cure,
treatment, and prevention of diseases that range from cancer, to Alzheimer’s Disease,
to herpes. Making these disease cure claims defines these
products as drugs under the law, and even though they were warned by the FDA, and in
some cases through joint letters with the FTC, to stop making such claims, a number
of the individuals and companies at issue continued to make these claims and promote
their products as treatments or cures for diseases; yet these drugs lacked substantial
evidence of safety and effectiveness. They’re also being sold without adequate directions
for their use. Therefore, selling them in interstate commerce in these circumstances
is illegal. The government is taking a multifaceted approach
to combating the problems of unlawful dietary supplements. In addition to criminal actions
we are using civil and administrative tools to safeguard consumers from harmful products.
As part of the sweep announced today, the Justice Department brought a dozen civil actions,
including just five in the last week, under the Food, Drug, and Cosmetic Act, and in some
cases using the Civil mail fraud injunction statute, seeking to stop the defendant entities
and individuals from violating the law. In these cases we are asking the courts to
order the defendants to stop their illegal conduct and to put in place processes and
procedures to prevent them from violating the law in the future. Our partner agencies,
including the FTC, the FDA, USPIS, DOD, and USADA, are taking other measures both to enforce
the law and to educate the public. As I mentioned, I stand here in partnership
with other agencies with whom we have joined forces to address this problem. Through enforcement
and education each agency is performing its own mission to protect consumers, and service
members, and athletes from dangerous, ineffective products.
You will hear more from my colleagues about the actions their agencies are taking. Together,
through cooperation and teamwork, we can multiply the impact of our efforts. These efforts won’t
put an end to this widespread problem, but they will go some distance toward bringing
change to the industry. We are not here to criticize the entire supplement
marketplace. Not every supplement contains an undisclosed ingredient, not every label
lies about what is contained in the bottle, and not every claim about dietary supplements
is unsupported by scientific evidence, but consumers must be on guard before taking dietary
supplements. Oftentimes it may be difficult or impossible
to tell the conditions under which the supplements are manufactured, and it is challenging to
sort through real scientific substantiation for a product as compared to unsupported hype.
How can consumers perform their own due diligence? Talk to your healthcare provider. Ask the
physician whether the bottle that you see on the store shelf or on the internet will
cause you harm or whether the money you’re going to spend on it is worth it.
Consult the public education materials provided by FTC, FDA, DOD, and USADA. The FDA’s website,
for example, includes tips for making informed decisions in evaluating dietary supplements,
and the FTC’s website also contains a wealth of information.
The Department of Defense and USADA have developed extraordinary tools, including a cell phone
app, to help consumers make informed choices about supplements.
This is only the beginning. Thanks to the partnerships we’ve built, our efforts in this
area will continue. We will keep investigating violators and we will use all available tools
at our disposal to advance our enforcement goals and to protect consumers.
With that, I’d like to turn the podium over to my colleague Deputy Commissioner for Global
Regulatory Operations and Policy, Howard Sklamberg, of the Food and Drug Administration.
MR. SKLAMBERG: Thank you. Dietary supplements are one of the most challenging areas that
FDA regulates. This arena encompasses a vast array of products and has a complicated supply
chain. We see a number of serious issues with dietary supplements and products falsely marketed
as dietary supplements, including companies not adhering to good manufacturing practices
and products with hidden pharmaceutical ingredients, both of which have the potential to cause
safety issues. We also find products making false claims
that are in violation of our laws. Some examples include products that claim to treat serious
diseases such as cancer or Alzheimer’s. We find that a company using one name and one
supply chain can change course the very next day, switch its name, and we’re back to square
one, but we take vigorous enforcement action. Recently, the FDA took action to prevent additional
deaths from the use of pure powdered caffeine, a dangerous product that has already resulted
in the known deaths of two young men. Indeed, during the past several years we’ve
issued hundreds of warning letters, worked with firms to voluntarily recall products,
and pursued civil and criminal enforcement against persons marketing illegal products.
In addition, the agency works with firms to achieve voluntary compliance such as removing
violative claims, destroying unsafe inventory, and ceasing distribution. We leverage resources
across the agency, but still have to prioritize our efforts to maximize impact, focusing first
on safety concerns. We’re also working with our government partners
such as the Department of Justice, the Federal Trade Commission, States Attorneys’ General,
and with members of industry who have a strong vested interest in seeing bad actors held
accountable. Consumers should be mindful of scams in which
products claim to prevent, treat, or cure diseases or other health conditions but are
not proven safe and effective for those uses. These health fraud scams lead to delays in
getting proper diagnosis and treatment and waste money. And these scams can also cause
serious, or even fatal, injuries. Today’s joint agency effort is a testament
to our commitment to protecting consumers from potentially unsafe dietary supplements.
The criminal charges against USPlabs should serve as notice to industry that if your products
are found to be severely harming public health, the FDA will exercise its full authority under
the law to bring you to justice and to protect consumers.
Thank you. With that, I will introduce Acting Deputy Chief Inspector Gary Barksdale of the
U.S. Postal Inspection Service. MR. BARKSDALE: Thank you. So as he said, my
name is Gary Barksdale. I’m the Acting Deputy Chief for the United States Postal Inspection
Service. On Friday, as part of a nationwide sweep on
dietary supplement marketers, postal inspectors executed federal search warrants in Ocala,
Florida. Today, two additional search warrants were served in Hyannis, Massachusetts and
Los Angeles, California. At all three locations postal inspectors seized
evidence to support mail fraud charges and food and drug charges against the companies
doing business as Vibrant Life, Viruxo, Optimum Health, and Regeneca Worldwide.
Despite legitimate medical breakthroughs, scammers, like the companies I just mentioned,
continue to peddle worthless pills, oils, and ointments, promising miracles and defrauding
our postal service customers and the American public. It’s the mission of the Postal Inspection
Service to enforce the laws that defend the nation’s mail system from illegal use.
In the outlined scheme, victims lose their money by ordering a product that promises,
but doesn’t deliver. Victims are also expecting certain health improvements by using the product,
but their health suffers when none of the advertised claims actually work, and it can
even pose health risks. Postal inspectors have a long history of effectively
enforcing the mail fraud statute to halt scammers from using the mail to sell their wares to
unsuspecting citizens. Working with our law enforcement partners and our regulatory partners,
we hope to protect the American consumer by keeping these scams at bay through our multi-pronged
approach of prevention, education, and prosecutive action.
So with that, I’d like to turn the podium over to Acting Director Reilly Dolan from
the Federal Trade Commission. MR. DOLAN: Thank you very much. Again, my
name is Reilly Dolan and I am the Acting Deputy Director for the FTC’s Bureau of Consumer
Protection. Like to thank our colleagues at the Department of Justice and our other agencies
for organizing and participating in this initiative. We are pleased to participate, as part of
the FTC’s ongoing consumer protection mission, to combat deceptive and unfair marketing practices
in connection with dietary supplements, and as part of that we are announcing three new
actions, one complaint, and two recent settlements, 20 warning letters, to go along with 11 other
cases the FTC has announced within the last year.
According to the Nutrition Business Journal, Americans spend nearly $40 billion a year
on dietary supplements. Many deliver what they promise, but unfortunately, some supplements
are nothing more than 21st Century snake oil. Disreputable companies are always on the prowl
to capitalize on changes in demographics, new public health scares, and growing epidemics.
Our law enforcement actions announced as part of this initiative reflect the false claims
we’ve seen recently: Supplements marketing to an aging demographic to stop memory decline
or graying hair, weight loss pills targeting the growing percentage of people who are battling
obesity, and even herbal remedies seeking to profit off an epidemic of opiate drug addiction.
Today we filed a complaint in Federal District Court seeking a permanent injunction and other
relief against Sunrise Nutraceuticals for its marketing of Elimidrol, a concoction of
vitamins, minerals, and herbs purported to alleviate the terrible physical and mental
symptoms of opiate withdrawal. Sunrise said Elimidrol allowed addicts to
get and stay clean on the first try but, as alleged in the FTC complaint, they didn’t
have the science to back up that claim. Still, they charged $75 a bottle for the product.
The company targeted vulnerable consumers who were trying to get clean, using moving
testimonials from addicts who claimed that Elimidrol had saved their lives.
We also are announcing recent settlements obtaining injunctive and monetary relief from
a number of individuals and companies involved in two different weight loss scams.
In the health nutrition matter we settled with several defendants involved in a classic
weight loss scam promising rapid, dramatic weight loss with bogus experts and fake scientific
studies. The products were named “Weight-B-Gone” and “Quick and Easy”.
In the second matter in NPB we reached a settlement with several companies and individuals who
capitalized on the green coffee bean diet fad, a fad first touted on the Dr. Oz Show.
In this case, the FTC alleged the defendants launched the pure green coffee extract just
weeks after the Dr. Oz segment aired and alleged false weight loss claims in news stories posted
on the web. Marketers must understand and comply with
the basic requirements that claims must be truthful, accurate, and supported by solid
science. The FTC will continue to be an active enforcement presence in the enormous dietary
supplement marketplace. For those who don’t, we will prioritize cases that serially affect
consumer health or safety or prey on vulnerable populations.
However, law enforcement alone cannot solve this problem. If you’re looking for a dietary
supplement to improve your health, you’re going to have to wade through an awful lot
of misleading advertising. Be skeptical about — for supplements that
claim to cure diseases, reverse the signs of aging, cause weight loss without diet or
exercise, or tout miracle cure or scientific breakthrough, talk to your healthcare professional
about supplements you’re considering, and please visit ftc.gov/dietarysupplements for
the materials that were referenced earlier. Now I’d like to introduce Dr. David Smith,
the Deputy Assistant Secretary for Defense for Health, Readiness, and Policy Oversight.
DR. SMITH: Well, good afternoon. I’m here today representing the Department of Defense,
and more specifically the Military Health System. And many of you may be aware that
the Military Health System is responsible for medical care for more than 9.5 million
beneficiaries around the world, including active-duty service members and their families,
retirees, reserve and National Guard beneficiaries. And I want to say that the DoD and the Military
Health System is in full cooperation and support with the Department of Justice and their initiative
to curb the use of unsafe dietary supplements. And ensuring the readiness of the force is
one of the department’s top goals, and unsafe dietary supplements are a threat to readiness
in the DoD. Now, why do I say that? Well, more than 70
percent of active duty service members take some type of supplement. And we also know
that 20 percent of those take performance-enhancing, body-building, or weight-loss supplements.
Some dietary supplements, including some performance-enhancing and body-building supplements, may be unsafe,
according to the FDA. And our overall goal is to keep our servicemen fit to serve.
And in December of 2011, Dr. Jonathan Woodson, my boss and the Assistant Secretary of Defense
for Health Affairs, asked to have a DoD-wide initiative created to promote education in
dietary supplements, which resulted in the development of a project called Operation
Supplement Safety, or OPSS, and the Consortium of Health and Military Performance, CHAMP,
at our medical school, the Uniform Services University of the Health Sciences, leads OPSS.
And the Operation Supplement Safety, or OPSS, website is our go-to resource in the DoD for
information about dietary supplements. And since 2012, the OPSS team has developed many
products to educate our service members, leaders, family members, providers, and retirees on
how to choose supplements wisely. And CHAMP, this DoD Center of Excellence for Health and
Military Performance, and the U.S. Anti-Doping Agency, have also partnered since that time
to develop additional educational resources for OPSS, or Operation Supplement Safety.
And they released the OPSS high-risk supplement list in February of this year.
And today, this partnership, along with funding from the U.S. Army Comprehensive Soldier and
Family Fitness Program, have produced two additional educational products that were
being released today: one, an online interactive educational module called Get the Scoop on
Supplements; and a mobile application that allows mobile downloading of our high-risk
supplement list. And these new products are now available on the OPSS website to anyone
that wants to access that. The DoD is proud to participate in the dietary
supplement sweep, alongside our federal agencies here today, and to address that issue of unlawful
and potentially unsafe dietary supplement products being marketed to our service members
and to our citizens. We applaud the team for taking on this clear
public health issue for the nation. Thank you.
And now it’s my pleasure to introduce Dr. Amy Eichner, who is the special advisor on
drug and supplements of the U.S. Anti-Doping Agency.
DR. EICHNER: Hi. My name is Dr. Amy Eichner. I’m from the U.S. Anti-Doping Agency, and
I’m the special advisor on drugs and supplements. I am here on behalf of USADA and clean athletes
to fully support the enforcement actions announced today. Elite athletes, but all athletes, including
recreational level, youth athletes, masters athletes, even the kids on playing fields
in your neighborhoods are very heavily targeted by dietary supplement companies wanting to
sell their products, especially sport and performance-enhancing products.
The actions announced today are a real win for clean athletes. We will continue working
with the federal agencies to share information about risky products as we become aware of
them, and we will also continue to directly educate U.S. athletes and the general public
on the dangers of the dietary supplement industry, and provide guidance on how people can choose
safe supplements. We offer this education on our Supplement411.org
website, on which we also host the USADA Supplement-411 high-risk list. The high-risk list is a list
of products that are known to contain or advertise to contain substances prohibited in sport.
For those of you who are familiar with the World Anti-Doping Agency prohibited list,
you will realize that nothing on that list has anything to do with nutrition. Those substances
should not be in dietary supplements. I would also like to announce that we are
also launching the Supplement-411 high-risk list application, similar to OPSS. So I invite
anybody who would like to view that to visit the Apple Store. It will be available in Android
in two weeks time. I would also like to acknowledge our very
important partnership with the Uniform Services University. Working together with that agency
has strengthened all of our educational materials, and I can tell you this is just the beginning.
Again, we fully support the agencies here and the actions that they’ve taken today.
Thank you very much. MR. MIZER: Questions?
(No audible response.) DR. EICHNER: Well, if there are no questions,
then — (Whereupon, at 3:59 p.m., the press conference
in the above-entitled matter was concluded.)