Upcoming Issue Highlights

DOJ Announces Supplement Sweep – CRN, NPA and AHPA Express Support

AIDP

On Tuesday, November 17, Ben Mizer,  principal deputy assistant attorney general for the Civil Division of the Department of Justice (DOJ), revealed the government’s plan for a sweep of actions targeting unlawful dietary supplement makers and marketers. “We are here today to explain the critical steps the federal government is taking to stem the tide of unlawful dietary supplements being sold to consumers nationwide,” he opened.

Mizer also announced the indictment of USP Labs, related to “widely popular workout and weight-loss supplements.” Supplements included JACKED, OxyElitePro and OxyElitePro New Formula. The company doctored packaging, labeling and other paperwork to defraud others about what the product was, Mizer said. (USP Labs is not associated with United States Pharmacopeia [USP])

“As one defendant put it, the stuff is completely, 100 percent synthetic,” Mizer continued. The defendant falsified paperwork to stay off the radar of regulatory agencies, made misrepresentations to convince well-known retailers, who had concerns about untested synthetic materials, to sell their products. The company falsified labeling and marketing materials to convince consumers, who prized natural ingredients, to buy the products. All of these people, regulators, retailers and consumers, trusted [that the] defendants were telling the truth about their products, Mizer said.

“We are here in part to hold USP Labs accountable for its actions. The indictment revealed today charges USP Labs in Texas, four of its executives and one of its consultants with a criminal conspiracy to sell toxic substances. As noted, this is just one step. Whatever the outcome, I am confident that the dedicated men and women from the DOJ and 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 USP Labs should serve as a wake-up call to the supplement industry,” Mizer continued. “The unmistakable message is that the DOJ and its federal partners will be vigilant when it comes to the health and safety of the American public. Fighting a legal activity in the dietary supplement industry is a high priority of our consumer protection agenda. The case announced today is one of only many cases brought as part of this sweep that we are unveiling.”

The FTC filed a complaint against Sunrise Nutraceuticals, LLC, which was announced yesterday. The company, based in Boca Raton, FL, claims that its dietary supplement Elimidrol, a “proprietary blend” of herbs and other compounds, alleviates opiate withdrawal symptoms and increases a user’s likelihood of overcoming opiate addiction.

The company alleged, through advertising on its website, that Elimidrol was the “No. 1 opiate withdrawal supplement” and it is the only opiate withdrawal product that is “guaranteed to work.” The company also claimed this “supplement” was non-addictive, non-habit forming and will help users “permanently overcome withdrawal the first time.” It also claimed that the “effect could be felt from the first dose” and a high-success rate from users.

The Federal Trade Commision (FTC) complaint alleges that the Sunrise ads for Elimidrol are deceptive because they are unsubstantiated. The FTC is seeking a court order providing redress and preventing the company from making such claims unless they can be supported by competent and reliable scientific evidence.

The FTC also announced two partial settlements against marketers accused of making unsupported claims for weight-loss supplements. The cases are part of the law enforcement sweep that are targeting illegal dietary supplement marketing by the FTC, DOJ, Department of Defense (DOD), Food and Drug Administration (FDA), Postal Inspection Service (USPIS) and the U.S. Anti-Doping Agency (USADA).

In May 2014, the FTC brought an action against Health Nutrition Products and related defendants. In its amended complaint, the FTC charged Crystal Ewing, five other individuals, and five companies with making false and misleading health and efficacy claims in direct mail ads and on a website owned by Ewing. In ads for W8-B-Gone, CITRI-SLIM 4, and Quick & Easy diet pills, the defendants featured bogus weight-loss experts. Citing fake scientific studies, the defendants also deceptively claimed to have clinical proof that consumers would experience a “RAPID FAT meltdown diet program” that lets them shed five pounds in four days with one pill, or up to 20 pounds in 16 days with four pills.

According to a press release by Ullman, Shapiro & Ullman, LLP, the stipulated court orders announced will settle the FTC’s charges against three defendants involved. The order against repeat offender Crystal Ewing and her company Classic Productions, LLC requires them to admit liability in the case, bans them from selling weight-loss programs, products and services, and imposes a non-suspended judgment of $2.7 million. The order against Ricki Black, a former officer and director of non-settling defendant Global Access Management Systems, Inc., prohibits the deceptive conduct alleged in the complaint, contains a suspended judgment of $1.6 million, and requires her to provide the FTC with proceeds from the sale of her sports car and fine jewelry.

According to the FTC’s complaint in an action brought in May 2014, Florida-based NPB Advertising, Inc. and others capitalized on the green coffee bean diet fad by using false weight-loss claims and fake news websites to market a dietary supplement called Pure Green Coffee. The Dr. Oz Show, a syndicated television program, praised green coffee bean extract as a potent weight-loss treatment that supposedly burns fat. Weeks after the show, the defendants launched Pure Green Coffee, which they promoted through internet ads and on their own website, making allegedly misleading, deceptive, and unsupported claims about its ability to help consumers lose weight.

The stipulated court order announced settled the FTC’s charges against several companies and individuals involved in the Pure Green Coffee scheme, including: Nationwide Ventures, LLC; NPB Advertising, Inc.; JMD Advertising, Inc.; Olympic Advertising, Inc.; Sermo Group, LLC; Signature Group, LLC; Paul Pascual; Bryan Walsh; and relief defendant CPW Funding, LLC. The proposed order bars the defendants from the deceptive acts and practices described in the complaint and imposes a $30 million judgment that will be suspended upon the sale of certain assets, payment of $160,800, and the collection and turnover of an additional $155,760 that was lent to a third party, according to the press release.

The FTC also sent warning letters to 20 companies, which have remained unnamed, that advertise and sell dietary supplements online for weight loss, warning them that Commission staff has reviewed their weight-loss claims and that they could be misleading. The letters describe the type of scientific evidence needed before making weight-loss claims and also raise concerns over the websites’ use of consumer testimonials.

The letters detail potential penalties for violating the FTC Act, provide links to relevant business education information, and request that the companies review the claims on their sites, revise them if necessary, and notify the agency of the specific actions they have taken to change the ad claims.

The Natural Products Association (NPA) applauded the actions taken by the Justice Department’s Civil Division and it’s federal agency partners to protect consumers and punish criminals. The NPA released the following statement:

“We welcome and applaud today’s enforcement action against rogue elements that are giving the overwhelming majority of legitimate dietary supplement manufacturers and retailers a bad image.  The fact is that America’s dietary supplement supply is the safest in the world because of the strong rules and good manufacturing practices that are prevalent among our members.

“We have long called on the government to prosecute illegal activity to the full extent of the law, and today’s action demonstrates the government’s vast power to regulate this industry.  We welcome the coordination and collaboration of the other agencies involved, and offer to work with them and others to continue educating the public about the benefits of proper dietary supplement usage.

“This is good news both for millions of Americans who use dietary supplements and the hardworking people in our business who are meeting the growing demand for natural products.”

“We are grateful to the DOJ, the FDA, the FTC and other government agencies for taking an important step today toward protecting consumers and responsible dietary supplement companies by taking strong enforcement actions against companies that do not follow the laws and put consumers at risk,” said Steve Mister, president and CEO of the Council for Responsible Nutrition (CRN). “These actions should serve as a strong warning to any company selling products in the dietary supplement space that if you’re going to engage in illegal activity, you’re going to pay the price.”

In May of this year, CRN reached out to the Department of Justice, noting concerns that companies engaging in blatant criminal activity were presenting a serious public health risk and hijacking the credibility of the reputable industry, Mister continued. The CRN urged the DOJ to use all available tools to hold transgressors fully accountable for their actions.

“These actions both help consumers navigate the market to avoid products that may do them harm, and also level the playing field for responsible companies who do things right. We pledge our support to help the government on this important initiative,” Mister concluded.

Michael McGuffin, president of the American Herbal Products Association (AHPA), also responded positively to the action taken by the DOJ and other government agencies in their sweep.

“The enforcement actions announced by the Justice Department, FDA, USPIS, and FTC are appropriately focused on companies alleged to have acted in contravention to the established laws that are in place to ensure informed consumer access to safe dietary supplements,” McGuffin said. “The American Herbal Products Association (AHPA) fully supports appropriate enforcement of all the laws that regulate the dietary supplement industry.”

“The Justice Department’s Principal Deputy Assistant Attorney General Ben Mizer accurately identified enforcement and education as the most effective steps that can be taken to mitigate the risk of criminals looking to defraud dietary supplement consumers by selling unlawful products,” McGuffin concluded.

The FTC has information on its website to help consumers make informed decisions about dietary supplements and health claims made in advertisements and to keep businesses on the right side of the law. Dietary Supplements contains links to information on what dietary supplements are, whether they are safe, and how to report a potential problem to the Commission. Health Claims contains links for business that sell dietary supplements and a range of other products describing how to ensure their advertising is not deceptive or misleading.

For more information, visit www.justice.gov.