Execs Fined for Selling Steroids

August 2, 2012

4 Min Read Execs Fined for Selling Steroids

BOISE, LLC, Jeremy DeLuca and Ryan DeLuca must pay $8.1 million for violating the Food, Drug and Cosmetic Act (FDCA) by selling misbranded drugs into interstate commerce. The company and the DeLucas were charged with misdemeanor counts of introduction and delivery of steroid products they labeled as dietary supplements.

According to their plea agreements, the defendants admitted that they sold five products misbranded as dietary supplements, when they were actually drugs. The five productsI Force Methadrol, Nutra Costal D-Stianozol, I Force Dymethazine, Rage RV5 and Genetic Edge Technologies (GET) SUS500were drugs because they contained synthetic anabolic steroids or synthetic chemical clones" of anabolic steroids that were not dietary supplements, and because they were labeled and promoted as products intended to affect the structure and function of the human body (building muscle mass). LLC was fined $7 million, the maximum possible fine. Under federal sentencing law, corporations convicted of violating FDCA can be fined up to twice the gross gain from sales of the misbranded product. LLC had gross gain of $3.5 million from misbranded products. In addition, Chief U.S. District Judge B. Lynn Winmill ordered LLC to serve four years probation and to implement a product testing procedure recommended by both parties.

Jeremy DeLuca, 33, the former president and vice president of LLC, was fined $600,000; $100,000 for each of the misdemeanor counts to which he pled guilty. Ryan DeLuca, 34, the companys founder and CEO, was fined $500,000. Judge Winmill also ordered both defendants to serve three years probation. The defendants fines are to be paid in monthly installments during the period of probation.

During the plea hearing, Ryan DeLuca accepted full responsibility and assured the court that would never again engage in such violations. In April 2012, Ryan DeLuca entered a guilty plea in the federal case.

Under FDCA, an individual in a business who has responsibility and authority either to prevent or correct a violation of the FDCA is strictly liable for a misdemeanor criminal violation of the Act, regardless of the extent of his knowledge of the violations. The DeLucas admit that during the time period charged, they had authority over products offered for sale on the company's website.

In 2008 and 2009, an FDA compliance officer at informed the DeLucas that some of LLCs products contained ingredients that did not qualify as dietary ingredients. recalled 65 products in November 2009 in response. Still, court records show in the first seven and one-half months of 2009, had gross revenue of almost $1.8 million from the sale of products similar to the five products the DeLucas and admitted were improperly sold as dietary supplements., LLC, is the largest internet retailer of supplements in the world. It does not manufacture dietary supplements, but only retails products made by others.

The sentencing is the end result of an investigation that included the execution of search warrants in September 2009 at LLC's Boise warehouse and Meridian, ID, headquarters.

The $8.1 million fines imposed in this case send a clear message that retailers, as well as manufacturers, of products sold as dietary supplements have a clear responsibility under the law to ensure that the products they are selling are indeed dietary supplements, and not synthetic steroids or steroid clones masquerading as dietary supplements," said U.S. Attorney Wendy J. Olson. The officers of those retailers also now know that they will be held responsible and have an obligation to know what the products they sell contain."

Lisa Malinowski, Acting Special Agent in Charge, FDA-Office of Criminal Investigations, Los Angeles Field Office, added, Today's sentencing should serve as a reminder and deterrent to those involved in the distribution of products promoted as dietary supplements that the FDA-Office of Criminal Investigations will continue working with U.S. Attorneys' Offices to protect consumers, vigorously pursuing and holding accountable those who sell unsafe and illegal products to the unsuspecting public."

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