SPRINGFIELD, Mo.—Marketing dietary supplements over the Internet with disease claims made Charles Thao an estimated $17 million—which he will forfeit to the U.S. government as he faces up to 35 years in prison after entering a guilty plea in federal court. U.S. District Judge Richard E. Dorr, for U.S. District Court, Western District of Missouri, oversaw the case, in which Thao pleaded guilty in a conspiracy to violate federal regulations, commit wire fraud and money laundering, and defraud consumers. Under terms of the plea agreement, Thao will dissolve his business, Nutrapha Research, and forfeit more than $17 million in proceeds. Following completion of a presentence investigation by the U.S. Probation Office, he may be subject to a sentence of up to 20 years in federal prison without parole on the money laundering charge and 15 years on the other conspiracy counts.
Thao was the final defendant to face the judge. Mai Lor, Thao’s wife, pleaded guilty in February 2010 to wire fraud charges. Tony T. Pham pleaded guilty in July 2009 in the conspiracy to violate the Food, Drug and Cosmetic Act, and to one count of wire fraud. Together, the three defendants stood accused of selling six products over the Internet through various company names using false marketing claims that positioned the dietary supplements as unapproved new drugs. The defendants also used false testimonials and made use of mirror image technology on its Web sites to display “sanitized” versions of the claims when accessed by an FDA network computer.
