More Diet Supplement Executives Head to Prison

Three executives of Hi-Tech Pharmaceuticals, Inc. of Norcross, Georgia have pleaded guilty to conspiracy and fraud charges for illegally selling prescription drugs. President and CEO, Jared Wheat, Vice President, Stephen D. Smith, and company co-founder Tomasz Holda admitted to conspiring to import and distribute adulterated, mislabeled and unapproved new drugs, and to commit mail and wire fraud. The company was selling via the internet generic forms of Xanax, Valium, Ambien, Vioxx, Zoloft, Viagra and Cialis manufactured in their lab in Belize without requiring a prescription.

As a result of the plea bargain, the government dropped assertions that the company was spiking its diet supplements with ephedrine alkaloids after the FDA’s 2004 ban on the marketing of ephedra products. See Alaska Personal Injury Law Group’s litigation over this practice of illegal spiking of diet supplements, Talbert v. E’ola Products, Inc.. Also absent were the earlier assertions that the executives had conspired to murder an FDA agent and blackmail a former US attorney general. (Holda also pled guilty to ordering a silencer over the internet.) They face prison terms up to 5 years each, with fines of as much as $250,000, and the company itself faces fines as much $500,000. In June, a different federal court issued a preliminary order against the company for FTC violations for deceptive advertisements of weight loss and sexual performance products. Among the company’s diet supplement products is Lipodrene, a weight loss product, and Stamina-Rx, a sexual stimulant.

Wheat had previously been arrested for selling ecstasy, and Holda had been convicted of steroid possession with intent to distribute. The FTC had also previously accused the company of falsifying medical research regarding sexual impotent products.

This conviction follows on the heels of two recent convictions of other diet supplement executives involving the President of Metabolife, Michael Ellis, and the President of Berkeley Nutraceuticals, Steve Warshak, Metabolife CEO Headed To Prison; Smilin’ Bob Ain’t Smilin’ No More: Herbal Company President Convicted

Sentencing is scheduled for October 21, 2008.

Sources:

Four “Hi-Tech Pharmaceuticals” Case Defendants Plead Guilty to Importing and Distributing “Knock-Off” Prescription Drugs

Norcross Company President Pleads Guilty To Conspiracy

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