Executive could face 25 years for fraudulent supplement marketing

By staff reporter

- Last updated on GMT

Related tags: Supreme court of the united states

A Michigan business owner has pleaded guilty to fraudulently marketing dietary supplements that claimed to prevent or treat a number of diseases.

Tony Pham, owner of Techmedia Health, admitted that he used the company to repackage, sell, market and distribute unapproved new drugs and misbranded drugs over the internet.

By pleading guilty to these charges in federal court last week, Pham and his collaborators will be faced with a fine of $12m, which corresponds to the value of the products sold by the firm in 2005 and 2006.

Behind bars

In addition, Pham may face a lengthy jail sentence for his role in the conspiracy.

“Under federal statutes, Pham is subject to a sentence of up to 25 years in federal prison without parole, plus a fine up to $500,000 or twice the gross gain. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office,”​ said the office of Acting United States Attorney for the Western District of Missouri, Matt Whitworth, in a statement.

Pham used Techmedia to market supplements on a number of websites that claimed to treat or prevent diseases such as diabetes, irritable bowel syndrome, gout, high cholesterol, high blood pressure, heartburn and diarrhea. The sites falsely claimed that the effects of the products were backed by clinical testing.

Pham also fabricated false customer identities, to which he attributed testimonials, as well as the false identity of a physician to endorse the claims.

Mirror technology

In addition, the company used mirror image technology on the websites, so that when these websites were accessed via an FDA network computer, they displayed “sanitized” ​versions of the site, containing medical claims that attempted to comply with the federal Food, Drug, and Cosmetic Act (FDCA), said Whitworth’s office.

“However, when each of these Web sites was accessed from a computer whose IP address could not be traced to the FDA, they displayed claims that the dietary supplements could cure, mitigate, treat, and prevent diseases, so that these supplements were sold as unapproved new drugs and misbranded drugs.”

The case, which was investigated by the Food and Drug Administration – Office of Criminal Investigation, is being prosecuted by Supervisory Assistant US Attorney Michael S. Oliver.

Related topics: Regulation

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