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Friday, July 12, 2024 | Back issues
Courthouse News Service Courthouse News Service

OxyElite Pro Supplement at Center of Crackdown

DALLAS (CN) - Lax regulation of the diet supplement industry stiffened up Tuesday when USPLabs and its top bosses, makers of OxyElite Pro, were whacked with an 11-count criminal indictment, including charges of wire fraud, conspiracy, money laundering and obstruction.

The federal indictment, filed Nov. 4 and unsealed Tuesday, accuses USPLabs, its CEO Jacobo Geissler, its president Jonathan Doyle, four other people and S.K. Laboratories of, among other things, using synthetic stimulants made in a laboratory instead of natural plant extracts, as advertised.

USPLabs, of Dallas, makes the popular diet supplements OxyElite Pro and Jack3d.

Four of the six individual defendants were arrested early Tuesday, and IRS and FDA officials seized several sports and luxury cars, dozens of investment accounts and real estate in Dallas County.

Prosecutors say the best-selling supplements contain a methamphetamine-like chemical, 1,3-dimethylamylamine, or DMAA.

"The DMAA used in Jack3d and OxyElite Pro was a synthetic stimulant manufactured in China," the 35-page indictment states. "USP Labs had been introduced to the substance by S.K. Laboratories and its vice president Sitesh Patel. USP Labs and its principal Jacobo Geissler were concerned about importing large amounts of DMAA, which Jacobo Geissler referred to as a 'questionable powder.' Jacobo Geissler was concerned because, as he told Sitesh Patel in 2007, the 'last thing' he wanted was for USP Labs to be 'on the FDA radar.'"

Prosecutors say USPLabs conspired to import the ingredients from China "using false certificates of analysis and false labeling and then lied about the source and nature of those ingredients after it put them in its products," and told retailers and wholesalers it used natural plant extracts in its products.

Prosecutors said Tuesday at a news conference in Washington, D.C., that the defendants failed to determine whether the products were safe, while knowing that studies linked them to liver toxicity.

Defendants include USPLabs co-founder, co-owner and CEO Jacobo Geissler, 39, of University Park; its co-founder, co-owner and president Jonathan Doyle, 37, of Dallas; Matthew Hebert, 37, of Dallas, responsible for product packaging design at USPLabs; Kenneth Miles, 69, of Panama City, Fla., the quality assurance executive in charge of compliance at USPLabs; S.K. Laboratories, of Southern California, which made many of USPLabs' drugs.; S.K. vice president Sitesh Patel, 32, of Irvine, Calif.; and Cyril Willson, 34, of Gretna, Neb., a consultant to USPLabs, who, "when dealing with the public on USP Labs matters ... used the fake name 'Eric White,'" according to the indictment.

All the individual defendants except Doyle and Miles were arrested Tuesday.

In Washington Tuesday, Deputy Assistant Attorney General Benjamin Mizer said the defendants were on a "perpetual search for the next miracle ingredient" from Chinese chemical makers.

"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, 'the stuff is completely 100 percent synthetic,'" Mizer said. "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 indictment, the defendants falsified paperwork to stay off the radar of regulatory agencies 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 chemicals, 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."

Mizer said an outbreak of liver injuries was associated with OxyElite Pro New Formula.

"Consumers experienced jaundice; several needed transplants to save their lives," he said. "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. They did not. Instead, they undertook a surreptitious, all-hands-on-deck effort to sell as much of the product as they could."

Congress has allowed the diet supplement to be laxly regulated, at best, for decades. The industry claims there is a difference between a diet supplement and a drug, though a pharmacologist at a leading research university told Courthouse news that that claim is "nonsense."

If convicted, the defendants face up to 20 years in federal prison and a $250,000 fine on each wire fraud and wire fraud conspiracy charge; 20 years and $500,000 or twice the value of property involved on each conspiracy to commit money laundering charge; five years and $250,000 on each count of obstruction of an agency proceeding and conspiracy to introduce misbranded food; three years and $10,000 on each count of introduction of adulterated food into interstate commerce with an intent to defraud and mislead; and one year and $10,000 on each count of introduction of misbranded food into interstate commerce and the introduction of adulterated dietary supplements into interstate commerce.

USPLabs did not immediately respond to an email message seeking comment Tuesday afternoon.

The identities of the national retailers who sold USPLabs' products were redacted from the indictment. GNC Holdings was identified as one such retailer in 2013 when it was sued along with USPLabs in Honolulu Federal Court by a woman who claimed two dozen people had contracted hepatitis from OxyElite Pro.

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