SAN FRANCISCO--On Feb. 12, after months of investigation into a company that customized supplements for professional athletes, a grand jury indicted BALCO and the company’s founder Victor Conte, vice president James J. Valente, track coach Remi Korchemny and personal trainer Greg F. Anderson. The charges returned by the grand jury included possession with intent to distribute anabolic steroids; conspiracy to defraud the United States; introduction and delivery of misbranded drugs into interstate commerce with intent to defraud; and misbranding of drugs held for sale with intent to defraud. Conte, Valente and Anderson were also charged with possession of human growth hormone (hGH) with intent to distribute, as well as money laundering.
The indictment alleges between December 2001 and Sept. 3, 2003, Conte, Valente, Anderson and Korchemny had, on six separate occasions, distributed steroids to athletes. In particular, the indictments allege the defendants violated federal law by distributing “The Clear” containing tetrahydragestrinone (THG), promoted as a “steroid-like derivative" that would provide "steroid-like" effects without causing the athlete to test positive for steroids, and distributing “The Cream” to conceal an athlete’s elevated testosterone levels during drug screenings.
In terms of fraud against the government, one E-mail found during an Internal Revenue Service (IRS) search warrant had Conte instructing a coach to refer to drugs only by initials. He wrote, "And remember that all E-mails are saved for a very long time, so be careful about how you say what you say. Searches for keywords like 'anabolic' and many others are going on at all times by big brother [sic]."
Conte also allegedly entered into agreements with athletes in which they agreed to endorse ZMA™, a nutritional supplement also sold by Conte.
The indictment further alleges Conte, Valente and Anderson conspired to launder the proceeds from the anabolic steroids by segregating the money from normal business proceeds and placing it into a personal bank account; the defendants also allegedly used a third party to handle checks to pay for the steroids.
The indictments were announced by U.S. Attorney General John Ashcroft along with IRS Commissioner Mark Everson and the Food and Drug Administration’s (FDA) Commissioner Mark McClellan. The IRS has been the lead investigator on the case, and FDA became involved during a September 2003 raid of BALCO’s facilities.
"The tragedy of so-called performance-enhancing drugs is that they foster the lie that excellence can be bought rather than earned and that physical potential is an asset to be exploited rather than a gift to be nurtured,” Ashcroft said in a statement. “These drugs are bad for sports, bad for the players and bad for the young people who look to athletes as role models."
Kevin Ryan, a Department of Justice attorney, reported, "The allegations contained in this indictment involve an organized effort to distribute illegal anabolic steroids and other performance-enhancing substances to top athletes. The indictment also alleges a systematic cover-up concerning the true nature of the drugs being trafficked in, by disguising the drugs, and by laundering the proceeds of the crime.”
BALCO’s clients are not named either in the indictment or a search warrant affidavit, which were unsealed today. The athletes' identities are not a matter of public record, either, although during the investigation it came out that baseball slugger Barry Bonds and Olympic sprinter Marion Jones had been clients.
The maximum statutory penalty for violation of conspiracy to possess with intent to distribute anabolic steroids and for possession with intent to distribute anabolic steroids is five years imprisonment and a $250,000 fine. The maximum statutory penalty for each violation of introduction and delivery of misbranded drugs into interstate commerce with intent to defraud and misbranding of drugs held for sale with intent to defraud is three years imprisonment and a $250,000 fine. The maximum penalty for each violation of possession of hGH with intent to distribute is five years imprisonment and a $250,000 fine. The maximum penalty for conspiracy for money laundering is 20 years imprisonment and a $500,000 fine.
The four defendants are scheduled to make their initial appearance in federal court in San Francisco on Feb. 13 before Magistrate Judge Maria-Elena James.
A copy of this press release may be found on the U.S. Attorney's Web site (www.usdoj.gov/usao/can). Related court documents and information may be found on the District Court Web site at www.cand.uscourts.gov.