U.S. District Court Judge Arthur Spiegel sentenced the remaining employees of Berkeley Premium Nutraceuticals this week, each receiving prison sentences. The Berkeley executives, Greg Cossman (former President), Susan Cossman (Warshak’s sister), Shelly Kinmon (Sales Director), James Teegarden (Chief Operating Officer), Michael Wagner (Financial Officer), and Steven Pugh (Warehouse Manager) received sentences ranging from 12 to 13 months. Berkeley’s accountant, William Bertemes, and its bookkeeper, Sam Grote, cooperated with authorities and drew the lightest sentences of one month in prison.
Berkeley’s in-house counsel, Paul Kellogg, was the last of those convicted to be sentenced. He also received a sentence of a year and a day. Despite his professional training, Kellogg claimed that he was following the orders of Steve Warshak, Berkeley’s President, and did not realize what he was doing was wrong. (Surely he couldn’t have been clueless when he told a night manager to hide potentially damning evidence from FDA inspectors and had it returned to the warehouse when they left.)
All told, 11 Berkeley executives and employees were convicted on fraud, money laundering, and conspiracy charges.
One might ask why the authorities didn’t just shut Berkeley down. Well, they can’t. Berkeley is not a pharmaceutical company, and the fake sexual enhancement supplement was not a drug, so the FDA has a more limited reach. Instead, the company, (like other diet supplement companies falsifying clinical research, spiking supplements with pharmaceuticals, selling supplements containing toxic contaminants, or mislabeling the amounts of active ingredients) is regulated under DSHEA, the Dietary Supplement Health And Education Act, which is toothless and requires that the FDA prove that the product is harmful before a supplement can be taken off the market (whereas drug companies must first prove to the FDA a product is safe and efficacious before it can be placed on the market).
While the regulatory authorities must be applauded here, this company is not a remarkable exception in the diet supplement industry. This industry is riding out well in front of the posse, and this won’t change unless DSHEA is changed.