Dietary Supplement Executives Ordered to Sit Behind Bars Pending Recall

<p>On Sept. 2, U.S. District Judge Charles A. Pannell, Jr. held Jared Wheat and Stephen Smith of Hi-Tech Pharmaceuticals in contempt of court for failing to recall four different products.</p>

ATLANTA--At the request of the FTC, a federal judge last week ordered two executives of a dietary supplement firm to go into the custody of the U.S. Marshals Service pending the company’s recall of products from retail stores that contained unauthorized claims on the packaging and labels.

On Sept. 2, U.S. District Judge Charles A. Pannell, Jr. held Jared Wheat and Stephen Smith of Hi-Tech Pharmaceuticals in contempt of court for failing to recall four different products, including a weight-loss supplement known as Fastin. Wheat is the owner, president and CEO of Hi-Tech Pharmaceuticals while Smith serves as senior vice president in charge of the company’s products.

The judge ordered Wheat and Smith to voluntarily surrender to the U.S. Marshals Service in Atlanta no later than Friday, Sept. 5. The U.S. Marshals Service did not immediately return a phone call Wednesday seeking comment on when the executives surrendered.

Although Pannell issued the recall order on May 14, the Norcross, Georgia-based company did not initiate the recall until late June and didn’t attempt to contact retailers, distributors or wholesalers until the following month, Pannell found in his 34-page order. He also questioned the accuracy of a mailing list used to notify retailers and said the recall notice was inadequate.

On June 24, Hi-Tech Pharmaceuticals announced the nationwide recall of various lots of products sold under the names Fastin, Lipodrene, Stimerex ES and Benzedrine. Pannell ordered the recall due to claims he deemed false on labels, including use of the terms “thermogenic", “fat burner" and fat loss aid," the notice said.

Wheat and Smith must remain behind bars until four conditions are satisfied. The products subject to the previous order must no longer be available for purchase, the defendants must use and distribute a proper recall notice to all retailers, distributors and wholesalers that are associated with the products, and links to the notice must be prominently displayed on each page of the company’s website.

Counsel for Wheat and Smith may seek their release after the conditions have been met. Jack Wenik, a Sills Cummis & Gross P.C. lawyer representing the defendants, did not immediately respond to a request for comment.

This isn’t the first time the FTC has asked a judge to throw a person tied to weight-loss products behind bars for violating a court order. Last year, U.S. District Judge Robert Gettleman jailed TV pitchman Kevin Trudeau for contempt of court, USA Today reported, finding he repeatedly neglected to pay USD $37 million in fines for violating a settlement with the FTC. In March, a federal judge sentenced Trudeau to 10 years in federal prison for violating a court order that barred him from making infomercials that misrepresented the contents of his book on weight-loss cures.

TAGS: Litigation
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