The executives of a previously high-flying brand of sports supplements were recently sentenced to prison after they admitted to a criminal conspiracy.
At its zenith, USPlabs LLC often had trouble meeting demand, according to a grand jury indictment, which alleged the fraudulent behavior of the supplements brand and its co-conspirators allowed them to make at least $400 million between October 2008 and October 2013.
The Dallas-based company attracted the attention of state and federal regulators in 2013 after dozens of people in Hawaii who took its popular-selling supplement, OxyElite Pro, suffered liver injuries.
Then, a grand jury in 2015 indicted the firm, as well as a contract manufacturer with whom it had a relationship, and executives of both companies on charges of criminal conspiracy, fraud and other malfeasance. USPlabs’ CEO Jacobo Geissler and its president, Jonathan Doyle, mounted a defense to the criminal charges for years, but they both pleaded guilty in 2019 to conspiracy to introduce misbranded food into interstate commerce.
According to the U.S. Department of Justice (DOJ), the two men admitted they imported substances with false and misleading labels to skirt law enforcement and attention from regulatory agencies. The indictment further alleged the defendants sold some of their products without determining whether they were safe for human consumption.
On Oct. 13, U.S. District Judge Sam A. Lindsay sentenced the 44-year-old Geissler to five years of prison. Doyle, age 41, was sentenced to two years behind bars. USPlabs was previously sentenced to pay $4.7 million in criminal forfeiture, while SK Laboratories was ordered to forfeit $6 million.
“It’s sad that it has to come to this where people are … fined and imprisoned, but it’s even sadder that people had to suffer and die from these supplements,” said Linda Wong, a liver transplant surgeon at The Queen’s Medical Center in Honolulu, in an interview.
Wong was working at the same facility—the only transplant and liver center in Hawaii—when she and her colleagues noticed a pattern of cases of liver failure among patients who had taken OxyElite Pro. The outbreak in September 2013 fueled an investigation by state and federal authorities, including the Hawaii Department of Health, Centers for Disease Control and Prevention (CDC) and FDA.
The Hawaii Department of Health declined to comment for this article.
CDC identified 97 people with acute non-viral hepatitis in an outbreak that began in Hawaii—72 of whom reported exposure to an OxyElite Pro branded product, FDA stated in an annual report to Congress submitted in February 2015.
A 42-year-old female who took OxyElite Pro and fell ill could not have a liver transplant because an “emergent liver transplantation work-up” disclosed she had an early form of breast cancer, according to a 2015 article published in the scientific journal, Drug Testing and Analysis.
“Despite aggressive care,” she died on Oct. 4, 2013 after suffering swelling of the brain, researchers wrote.
Another patient died due to complications from a liver transplant and other factors, Wong shared. A third patient who took OxyElite Pro and received a liver transplant remains alive, “but she’s on chronic medications for the rest of her life,” the surgeon added.
Sean Higgins is a shareholder with Andrews & Thornton, a litigation firm in Newport Beach, California that sued USPlabs on behalf of consumers who took its supplements.
“For almost ten years, we have vigorously fought for the vindication of hundreds of American consumers whose lives were destroyed by use of dietary supplements marketed by USPlabs,” the attorney said via email. “These victims were duped into believing these products were natural, safe and effective dietary supplements, when, in fact, they were untested and dangerous drugs masquerading as supplements. Many paid dearly, some with their lives.”
Michael Gibson, Doyle’s defense lawyer, told Lindsay during last week’s sentencing hearing that his client’s company has so far paid out $22 million in settlements to victims who brought legal claims over its products, the Dallas Morning News reported. Asked for this article whether there is any pending civil litigation against USPlabs, Higgins responded the matters have been resolved.
Other people indicted in the case who have pleaded guilty are expected to be sentenced in the coming months, according to DOJ. Attorneys who represented Doyle, Geissler, USPlabs and SK Laboratories did not respond to requests for comment.
In a 2019 plea agreement reached with the federal government, USPlabs agreed to cease its business activities and liquidate its inventory.
“Dietary supplement companies cannot be allowed to deceive their consumers and hide the fact that they are including untested ingredients in their products,” Erin Nealy Cox, U.S. Attorney for the Northern District of Texas, said in a statement. “We are committed to holding people who harm consumers accountable for their unconscionable behavior.”
In an interview, Oliver Catlin, president and co-founder of the Banned Substances Control Group (BSCG), described the defendants’ behavior as “egregious,” considering they concealed the identity of ingredients and continued to sell their supplements, even after they were aware the products could cause liver injuries.
According to the indictment, despite promising FDA and the public that it would stop distributing OxyElite Pro, “USPlabs internally engaged in a surreptitious, all-hands-on-deck effort to sell as much OxyElite Pro as it could as quickly as possible, and attempted to ship the rest of the OxyElite Pro in its possession out of the United States to avoid having FDA seize the product.”
The prosecution of USPlabs and its executives demonstrates “there’s severe consequences for not following the laws, or for having a structure that’s not going to be honorable toward FDA laws,” said Dan Fabricant, Ph.D., the head of the Natural Products Association (NPA), who helped respond to the 2013 outbreak of liver injuries while serving as director of FDA’s Division of Dietary Supplement Programs.
In November 2013, following pressure from FDA, USPlabs voluntarily recalled OxyElite Pro products that contained an ingredient called aegeline. USPlabs described aegeline as a “synthesized version of a natural extract from the Bael tree.”
A previous version of OxyElite Pro incorporated DMAA (1,3-dimethylamylamine). DMAA was the subject of a recent petition to the U.S. Supreme Court that was denied and the target of 2012 warning letters from FDA to several brands, including USPlabs.
In a 2013 warning letter addressed to Geissler, FDA maintained certain supplements, including OxyElite Pro, were adulterated because they contained a new dietary ingredient (NDI)—namely aegeline—and USPlabs failed to submit documentation to the agency establishing the safety of the substance.
“The tip of the spear really was the NDI issue to start, and so it shows how important that piece of the law is,” Fabricant reflected.
Asked about the sentencings in the USPlabs case, Peter Lurie, M.D., president of the Center for Science in the Public Interest (CSPI), a consumer advocacy group, said it was “good to know” people were being apprehended for their misdeeds. He also noted it’s highly unusual for individuals to be sentenced to prison for violating the Federal Food, Drug & Cosmetic Act (FD&C).
“But the problem, of course, is that this is the mere tip of the iceberg of misbehavior in the dietary supplement industry,” said Lurie, who previously served as associate commissioner for Public Health Strategy and Analysis at FDA.
He suggested authorities are constantly playing a game of catch-up, due to a “weak” law governing dietary supplements, an “under-resourced” FDA and the “creativity of people in this industry [that] knows no bounds.”
“It’s always a whack-a-mole problem,” added Lurie. “They appear to have whacked the mole, and all the power to them for having done so.”
Wong said she imagined many supplement manufacturers are “not following the rules,” and she questioned how well FDA can monitor or enforce its dietary supplement regulations.
“I’m not really sure that this is going to change anything,” the surgeon said, commenting on the impact of the recent sentencings.
While thanking DOJ for its efforts, Higgins struck an optimistic note about the potential impact of the case.
“On behalf of the victims of this reckless enterprise, we applaud the great work of the Department of Justice in putting the key individuals behind bars,” he said. “We hope this case will deter other start-up companies from hawking untested synthetic chemicals as natural products to unsuspecting consumers.”
Asked if justice was served in the USPlabs case, Catlin of BSCG said, “I certainly think so.”
He described the terms of the prison sentences as “some of the most severe” penalties imposed on executives of supplements brands.
“It matches the severity of the violations,” Catlin added, describing a company that intentionally ignored safety concerns and continued to sell its supplements.
The USPlabs case functions as a reminder to anyone in an FDA-regulated business that any violation of the FD&C is potentially a criminal violation within the discretion of the FDA and DOJ, said Marc Ullman, an attorney in Uniondale, New York, who advises supplement firms on FDA regulations and the FD&C.
“The Supreme Court has said in multiple decisions that the obligation that you take upon yourself when you enter a trade that’s regulated under the Food, Drug & Cosmetic Act is so serious that the concept of strict criminal liability applies,” explained Ullman, of counsel with Rivkin Radler LLP.
Few statutes impose strict liability, he added. Based on the legal doctrine, a person can be held criminally liable even if they did not intend to violate the FD&C.
“The Court’s analysis has been, ‘You have voluntarily entered a market with very serious potential health consequences, so you better beware of what you do,’” Ullman remarked. “Obviously in the [USPlabs] criminal prosecution, we’ve gone beyond actions not specifically intended to break the law, but they nevertheless serve as a reminder of the kind of regulation that people who engage in this trade need to be aware of.”
Catlin said the USPlabs case underscores brands should scrutinize ingredients and certificates of analysis (CoAs) for those substances to ensure their “quality control package is complete and avoids noncompliance.” According to DOJ, the defendants engaged in a conspiracy to import dietary supplement ingredients from China, including DMAA, using false CoAs and untruthful labeling, then lied about the source and nature of those ingredients. They allegedly advised some of their retailers and wholesalers that their products contained natural plant extracts, when they actually contained a synthetic stimulant produced in a Chinese chemical factory.
Catlin himself has identified similar misrepresentations in the supplement industry.
“I saw a CoA not long ago for vinpocetine where they started by describing it as a plant extract,” he reflected. “In the course of the CoA, they sort of waffled back and forth on whether it was really an extract or not. And of course, it’s not. It’s synthesized.”
Rick Collins, an attorney in Mineola, New York who has represented clients in the sports nutrition category prosecuted by DOJ, offered counsel to firms in the wake of the USPlabs’ case.
“Innovation is a good thing, but not if a new ingredient isn’t compliant,” said Collins, a partner with Collins, Gann, McCloskey & Barry PLLC, via email. “Make sure that what’s in your product adheres to the law. Ensure that your correspondences regarding the importation of the ingredient are accurate and truthful. And always remember that FDA prioritizes safety—if the ingredient appears to be harmful to consumers, the risk of an enforcement action dramatically rises.”