LOS ANGELES (CN) - "Craze" diet supplement is spiked with "illegal analogs to methamphetamine," and its president is a felon who did this before, a competitor claims in court.
Nutrition Distribution, of Phoenix, sued Driven Sports and Sports Nutrition Research in Federal Court, listing the same New York City address for both defendants.
Nutrition Distribution does business as Athletic Xtreme, which markets the AX brand of supplements.
USA Today's reporting on Craze has prompted many retailers to stop selling the drug. The newspaper reported on Aug. 12 that eBay had dropped the product, adding to a list that includes Wal-Mart and Bodybuilding.com, which previously had named Craze the best new supplement for 2012.
But in its lawsuit, Nutrition Distribution claims that side effects reported from Craze include "insomnia, depression, irritability, paranoia, hallucinations, stroke, myocardial infarction, cardiac arrhythmia and addiction."
The complaint states: "This is a civil action arising from defendants' false advertising and blatant misrepresentations regarding its Craze pre-workout nutritional supplement which is marketed as containing a natural extract as its active ingredient, when, in fact, it contains illegal analogs to methamphetamine."
Driven Sports was "founded by a convicted felon, Matt Cahill," the complaint states. It continues: "According to a recent USA Today article, Cahill has, over his nearly 12 year career in the nutritional supplement industry, 'continued to launch new and risky products.' Most notoriously, Cahill and his wife pled guilty in 2005 to introduction of a misbranded drug into interstate commerce, and were sentenced to 24 months in federal correctional facilities for their crimes. Shockingly, at the end of his sentence, Cahill and his wife formed DS [Driven Sports] in 2008 and began selling nutritional supplements anew. Cahill is again facing criminal charges for introducing a separate supposedly all-natural bodybuilding supplement in 2008 that prosecutors allege contains an unapproved new drug.
"Defendant SNR, founded in late 2007, is also run by Cahill and his wife, and supplies DS with the formula for its products, including Craze. Both DS and SNR are run from the same address." (Citation to 21 U.S. Code omitted.)
Neither Cahill nor his wife are named as individual defendants.
Federal prosecutors in San Jose sued Matthew Cahill in August 2012, alleging "Introduction and Delivery of Unapproved New Drugs Into Interstate Commerce With the Intent to Defraud and Mislead." That lawsuit involved a drug called "Rebound XT," which prosecutors said contains the unapproved drug ATD (androsta-1,4,6-triene3, 17-dione.)
In the newest complaint, Nutrition Distribution claims it planned to introduce its AX product in 2011 to fill a hole left by the departure of GNC's bodybuilding supplement, Jack3d. That product came off the market after the FDA found it included the dangerous stimulant dimethylamylamine, or DMAA.
AX developed a sports drink called Supersize to fill the void, the complaint states, but the defendants' illegal drug competed unfairly against it.
"Craze was far more potent than anything on the market and quickly became the market leader," the complaint states.
"Unable to compete with what turned out to be the illegal contents of Craze, the initial traction of SuperSize faded and plaintiff lost out on the income streams it anticipated and the benefit of its research and development efforts. ...
"In June 2012, the U.S. Anti-Doping Agency (USADA) did tests on a sample of Craze and found several prohibited stimulants in the product, including amphetamine and amphetamine-related compounds N-methylphenethylamine, beta-methylphenethylamine, [and] ethylamphetamine. These compounds are banned by the world anti-doping agency. None of these ingredients are listed in on the Craze ingredient list. The USADA has listed Craze on its website's 'High Risk Dietary Supplement List.'"
Craze is banned in Australia, according to the complaint.
But Driven Sports denies on its website that Craze contains illegal stimulants, and claims an independent lab found the product is clean, according to the complaint.
The plaintiff wants sales of Craze enjoined, and compensatory, treble and punitive damages for false advertising and Lanham Act violations.
Similar claims were made against Craze last year in state court. The supplement is also the subject of a pending patent infringement lawsuit in Federal Court.
Nutrition Distribution is represented by Robert Tauler with Godwin Tauler.
Driven Sports did not immediately respond to an emailed request for comment.
"Diet supplements" are a $32 billion industry in the United States. A complaisant Congress let industry operate largely without regulation.
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