As dietary supplement company USPlabs LLC and its corporate executives prepare for a 2018 trial in response to charges of fraud and other crimes, defense lawyers are keen to find exculpatory evidence that could help persuade a jury to exonerate their clients of guilt.
During a court hearing in July 2017, two attorneys for the defendants expressed concerns that federal prosecutors would wait to share potentially exculpatory evidence until the eve of trial.
S. Cass Weiland is an attorney representing Matthew Hebert, who is among the USPlabs executives charged with wire fraud, obstruction of an agency proceeding and other crimes in a superseding grand jury indictment.
During a July 20 court hearing in Dallas, Weiland advised U.S. Magistrate Judge Renee Harris Toliver that his client owned or owns 10 percent of USPlabs and “was the graphics guy who handled the labeling of the various USP products.
“And so, because of his status in the company and his relative inactivity in terms of operations of the company, particularly the technical aspects of the products, we believe that there could be an enormous amount of exculpatory material in the hands of the government," Weiland said, according to a written transcript of the court hearing. “And we believe, because of the complexity of this case, that they should point out what they already know to be exculpatory and not wait until the eve of trial."
Added Weiland: “The government's position, Your Honor, seems to be that we don't know of any exculpatory material, and if we do, we don't have to give it to you until the trial."
Exculpatory material, the lawyer suggested, could include testing of USPlabs’ dietary supplements, as well as patient medical records. For instance, evidence that medical patients who took USPlabs supplements suffered pre-existing health conditions could contradict FDA’s claims that the company’s products were unsafe and contributed to liver injuries.
According to FDA, USPlabs was linked to a 2013 outbreak of hepatitis that began in Hawaii, prompting the agency to warn the supplement company that its products containing aegelinea new dietary ingredient (NDI) not subject to a required notification to FDAwere adulterated. In the acute non-viral hepatitis outbreak, dozens of patients were hospitalized, at least three received a liver transplant and one person died, the agency noted on its website.
Weiland, a partner with the law firm Squire Patton Boggs, referenced related civil lawsuits in which he said the plaintiffs suffered from many pre-existing health ailments and could not prove they consumed USPlabs’ product.
“The corollary issue in this case is going to be, did these people actually take our products or did they take a counterfeit product?" the lawyer remarked during the court hearing.
Patrick Runkle, a trial attorney with the Department of Justice’s (DOJ) Consumer Protection Branch, said the government has turned over millions of documents to the defense.
“We've invested extraordinary numbers of resources and manhours into processing, reviewing documents to turn over," the government lawyer advised the judge. “And what I can tell you today is that not a single document has been withheld that we believe is Brady/Giglio material."
Runkle was referencing two landmark cases decided by the U.S. Supreme Court: Brady v. Maryland, a 1963 decision in which the Supreme Court held the prosecution cannot suppress evidence favorable to a defendant that could be material to his guilt or punishment; and Giglio v. United States, a 1972 case that examined a prosecutor’s failure to reveal to the jury that a witness had been promised not to be prosecuted in exchange for his testimony. After noting the prosecutor’s agreement was relevant to the witness’s credibility, the Supreme Court reversed the conviction, ordering a new trial.
Runkle said that, to his knowledge, the government has not withheld patient files. He also suggested he had no plans to overwhelm the defense with Brady and Giglio evidence right before the trial.
Such materials already had been turned over to the defense, the government lawyer said, although he noted he couldn’t remember immediately whether such evidence was separated from the other documents shared with the defense. In total, prosecutors have turned over millions of documents to the defendants, underscoring the complexity of the criminal case.
“And I'm not recalling right now whether that was a separate production, but there was a very limited amount of material that, out of an abundance of caution, we did turn over, because we thought … this is something that could potentially be exculpatory or it could be Giglio down the line, depending on what witnesses are called," Runkle advised the court.
Richard Roper, a lawyer representing USPlabs’ co-founder Jonathan Doyle, also expressed concern that prosecutors would turn over a tremendous amount of evidence on the eve of trial.
Toliver, the federal magistrate judge, ordered the government to advise defense counsel within 14 days of documents that are required to be produced under Brady and Giglioto the extent that such material has already been identified. Prosecutors also were ordered to turn over additional materials within 14 days if the government discovered additional material considered exculpatory while preparing for trial.
DOJ, Roper and Weiland either declined comment or didn’t respond to a request for comment for this article.
Trial Scheduled for September 2018
The case against USPlabs and its co-defendants was scheduled to go to trial in January 2018, but it was recently pushed back eight months to September 2018.
The prosecution against Dallas-based USPlabs symbolizes what industry critics perceive as rampant fraudulent activity plaguing America’s US$41 billion dietary supplement industry.
USPlabs, the indictment claimed, reaped a windfall of at least $400 million in revenues over a five-year period beginning in October 2008, thanks to a conspiracy to commit fraud, including misrepresenting in certificates of analysis (CoAs) that 1,3-dimethylamylamine (DMAA) was derived from nature when it was synthetically produced.
FDA warned companies in 2012 that DMAA was an illegal ingredient in supplements, and USPlabs eventually withdrew the controversial substance from its products.
But USPlabs’ criminal behavior, the indictment alleged, was not limited to DMAA. For instance, USPlabs imported other chemicals from China under false labels, according to the indictment. In an email on Dec. 8, 2011, USPlabs’ CEO Jacobo (aka Jacob) Geissler allegedly instructed a Chinese chemical seller to mislabel a shipment of nine different chemicals by writing: “Please send as green coffee samples and send them all together … And don’t label the individual bags. Label as green coffee sample 1, 2, 3, etc."
USPlabs has contested the allegations in the grand jury indictment. On its website, the supplement company denied it “ever attempted to defraud any of its retail customers or consumers, sold any unsafe products, or engaged in any wrongdoing."
One of the defendants, Sitesh Patel, is serving eight months in prison after being convicted of conspiracy and mail fraud in an unrelated criminal matter. Patel was the vice president of SK Laboratories Inc., another co-defendant in the grand jury indictment that manufactured products for USPlabs.
Joseph McMullen, a lawyer who represents SK Laboratories, told INSIDER in March that Patel intended to appeal his conviction. He also noted the verdict was unrelated to the manufacturer’s current operations.
“For the past half-decade, the company has been utilizing independent auditors, consultants, and legal counsel to assure that its products, quality control measures, and manufacturing standards surpass the requirements of the FDA regulations," he said in an email.
As INSIDER reported in September 2016, a federal judge rejected the government’s request to shut down the company, ruling SK Laboratories is not currently involved in illegal activities.
The criminal case against USPlabs, SK Laboratories and the other co-defendants is in the U.S. District Court for the Northern District of Texas, Dallas Division, Case No. 3:15-CR-00496-L.