USPlabs Execs Face Criminal Charges For Dietary Supplements

Updated on

The U.S. Justice Department announced the successful conclusion of a nationwide sweep of illegal activities by 100 makers and marketers of dietary supplements Tuesday afternoon.

Among the firms charged are USPlabs, which manufactured the workout supplements Jack3d and OxyElite Pro, as well as six of its executives, who have been hit with criminal charges for the unlawful sale of the nutritional supplement, according to the Justice Department.

Over the course of the more than one-year-long investigation by multiple federal agencies, 117 individuals and entities were served with criminal and civil enforcement actions.

The news of the federal investigation of dietary supplement makers sent many issues in the sector, including HLF and GNC, tumbling earlier on Tuesday.

More on federal charges against USPlabs execs

The statement Tuesday allowed that six executives with USPlabs LLC and a related company, S.K. Laboratories, are now looking at criminal charges related to the sale of unlawful dietary supplements. Four suspects were arrested on Tuesday and two are expected to surrender in the coming days.

The indictment alleges that USPlabs manufactured Jack3d and OxyElite Pro using an illegal stimulant made in China, but told retailers that the supplements were made from plant extracts.

“The defendants knew of studies that linked the products to liver toxicity,” the department pointed out in its statement.

News of the Justice Department press conference earlier hammered shares of GNC Holdings Inc, Vitamin Shoppe and Herbalife, but none of them were named in the announcement and their prices were only down slightly at the close.

Do you know which under-the-radar stocks the top hedge funds and institutional investors are investing in right now? Click here to find out.

Of note, the press conference on Tuesday was attended by senior officials at the Department of Justice, the U.S. Food and Drug Administration, the U.S. Postal Inspection Service, the Federal Trade Commission, the Department of Defense and the U.S. Anti-Doping Agency

Statement from Justice Department

“The Justice Department and its federal partners have joined forces to bringing to justice companies and individuals who profit from products that threaten consumer health,” noted Principal Deputy Assistant Attorney General Mizer. “The USPlabs case and others brought as part of this sweep illustrate alarming practices the department found—practices that must be brought to the public’s attention so consumers know the serious health risks of untested products.”

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!