Randy Olshen, one of the founders of Innovative Health Solutions LLC (IHS), solicited and received more than $7 million from at least 50 victims as part of a scheme in which he defrauded investors, according to the U.S. Attorney’s Office for the District of Utah in a news release.

Josh Long, Associate editorial director, Natural Products Insider

September 22, 2014

2 Min Read
President of Sports Drink Company Charged with Defrauding Investors

SALT LAKE CITY—A federal grand jury last week returned a 38-count indictment against the president of a company that manufactured and sold sports hydration drinks, federal prosecutors said.

The indictment, charging Randy Olshen with mail fraud, wire fraud and money laundering, claimed he received more than USD $7 million from at least 50 victims as part of a scheme in which he defrauded investors, according to the U.S. Attorney’s Office for the District of Utah in a news release. Olshen is one of the founders of Innovative Health Solutions LLC (IHS), whose products marketed for energy and stamina included H2O Overdrive.

The 51-year-old Olshen represented IHS had roughly $1.1 million in sales in 2009 when sales only totaled $98,275, and he claimed the company generated more than $28 million in 2012 sales when the figures were only around $579, 239, according to the indictment.

The indictment also alleged Olshen misrepresented the company had large receivable accounts with national chains, masked the company’s finances, and contrived documents including sales records. He also was accused of failing to pay creditors, using IHS funds beyond his reported salary for his personal benefit and paying a portion of investor funds to others as commissions for hauling in investments for the company.

The grand jury charged Olshen with 12 counts of mail fraud, nine counts of wire fraud and 17 counts of money laundering. For each count of mail fraud and wire fraud, he faces a maximum penalty of 20 years in prison with fines of $250,000 if he is convicted.

Olshen, who currently resides in Newport Beach, California, maintained a home in Summit County, Utah, during times that are relevant to the indictment. A number listed online for a Randy Olshen in Newport Beach was disconnected. Stephen McCaughey, a criminal defense lawyer in Salt Lake City who represents him, did not immediately respond to a request for comment on the indictment.

Olshen is due to make an initial appearance on Oct. 22 before U.S. Magistrate Judge Paul M. Warner.

Special agents of the FBI, IRS Criminal Investigation, and the Utah Division of Securities have been investigating the case, which is being prosecuted by the U.S. Attorney’s Office in Salt Lake City.

About the Author(s)

Josh Long

Associate editorial director, Natural Products Insider, Informa Markets Health and Nutrition

Josh Long directs the online news, feature and op-ed coverage at Natural Products Insider, which targets the health and wellness industry. He has been reporting on developments in the dietary supplement industry for over a decade, with a focus on regulatory issues, including at the Food and Drug Administration.

He has moderated and/or presented at industry trade shows, including SupplySide East, SupplySide West, Natural Products Expo West, NBJ Summit and the annual Dietary Supplement Regulatory Summit.

Connect with Josh on LinkedIn and ping him with story ideas at [email protected]

Education and previous experience

Josh majored in journalism and graduated from Arizona State University the same year "Jake the Snake" Plummer led the Sun Devils to the Rose Bowl against the Ohio State Buckeyes. He also holds a J.D. from the University of Wyoming College of Law, was admitted in 2008 to practice law in the state of Colorado and spent a year clerking for a state district court judge.

Over more than a quarter century, he’s written on various topics for newspapers and business-to-business publications – from the Yavapai in Arizona and a controversial plan for a nuclear-waste incinerator in Idaho to nuanced issues, including FDA enforcement of the Dietary Supplement Health and Education Act of 1994 (DSHEA).

Since the late 1990s, his articles have been published in a variety of media, including but not limited to, the Cape Cod Times (in Massachusetts), Sedona Red Rock News (in Arizona), Denver Post (in Colorado), Casper Star-Tribune (in Wyoming), now-defunct Jackson Hole Guide (in Wyoming), Colorado Lawyer (published by the Colorado Bar Association) and Nutrition Business Journal.

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