Metabolife, Founder Indicted by Grand Jury 40061

Metabolife, Founder Indicted by Grand Jury

SAN DIEGOA grand juryreturned an eight-count indictment against Metabolife International Inc. and itsfounder, Michael Ellis, on July 22. The indictment charges the defendants withsix counts of making false, fictitious and fraudulent representations to theFood and Drug Administration (FDA) and two counts of corruptly endeavoring toinfluence, obstruct and impede proceedings concerning the regulation of dietarysupplements containing ephedra.

According to prosecutors, Metabolife and Ellis are chargedwith falsely representing material facts to FDA in letters from April 1998 andFebruary 1999. The prosecutors allege the letters included false statements thatMetabolife ha[d] never received one notice from a consumer that any seriousadverse health event has occurred because of the ingestion of Metabolife 356and that the company had a claims-free history.

It is never acceptable for corporations to lie toregulatory agencies, but it is particularly egregious when those lies threatenthe public health, said U.S. Attorney Carol Lam.

The case is being investigated by the FDA Office of CriminalInvestigations and the Internal Revenue Service Criminal Investigation Division.Each of the eight charges holds a maximum penalty of five years in prison and afine up to $250,000. The defendants pled not guilty at their arraignment on July27.

Metabolife (www.metabolife.com) issued a response from itsattorney, Steve Mansfield from Akin Gump. The allegations in this indictmentare utterly baseless, he said. The prosecuter handling this case appearsto be doing the bidding of a disgruntled agency that has been seeking for thepast 10 years to put the dietary supplement industry out of business. ... Aftertwo years of investigation, during which no stone was left unturned, millions ofdollars of investigation resources, deployment of over 100 federal agents, andover a dozen search warrants, the government has concocted a hypertechnicalviolation by taking statements to a regulatory agency out of context. We willvigorously contest each and every allegation and look forward to our day incourt.