Natural Products Insider

MAY-JUN 2019

INSIDER is the leading information source for marketers, manufacturers and formulators of dietary supplements, healthy foods and cosmeceuticals. Since 1997, INSIDER has been serving the needs of the global nutrition industry.

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naturalproductsinsider . com 5 In the News Popular sports nutrition company Blackstone Labs, its co-founders, key employees and manufacturing partners were indicted by a federal grand jury for selling illegal substances, including prohormones (primarily dimethazine or DMZ), AMP citrate (aka 1,3-Dimethylbutylamine/DMBA) and SARMs (selective androgen receptor modulators), as dietary supplements. The defendants face signifi cant prison time and fi nes, as well as forfeiture of real estate, automobiles, equipment and already seized funds. Issued March 7 and unsealed March 13, 2019, the indictment named Blackstone President and CEO Phillip "P.J." Braun as a defendant, along with his fellow Blackstone Labs co-founders, Aaron Singerman and Robert DiMaggio. Singerman left day-to-day operations in 2016 but was still an owner until around January 2018; he is currently CEO of RedCon1. DiMaggio helped manage Blackstone and took monthly payments until about September 2017; he is currently president and CEO of IronMag labs. Blackstone employees James Boccuzzi, lead salesman and wholesale sales manager, and David Winsauer, vice president and marketing/website manager, were also named, as were contract manufacturer VenTech Labs LLC and its co-owner and CEO, Anthony Ventrella. All the defendants are based in Florida, except for Ventrella, who resides in Nevada. The indictment alleged the defendants knew the hundreds of thousands of products they sold were illegal and unsafe, and they attempted to shield themselves from liability by creating illicit companies to handle the manufacturing of the products, which were sold through trusted distributors. In the 14-count indictment, all the defendants were charged with one count of conspiracy to defraud consumers and FDA, which carries a maximum of fi ve years in prison and a US$250,000 fi ne. Braun and Singerman also face several other counts: Two counts of introducing unapproved new drugs into interstate commerce (max three years in prison and a fi ne of $250,000 or twice the gross gain/loss per count) One count (along with six other defendants) of conspiracy to distribute anabolic steroids (Schedule III)—the indictment alleged one consumer suffered serious harm from the conspiracy (max 15 years, $500,000) Three counts of distributing a controlled substance (max 10 years, $500,000 fi ne per count) Three counts (each) of money laundering (max 10 years, $250,000 or twice the gross gain/loss) "Fraud by supplement manufacturers and distributors is extremely dangerous for consumers, who rightly assume that a dietary supplement product sold in stores or online will not contain unapproved drugs," said Jody Hunt, assistant attorney general in the Civil Division at the Department of Justice (DOJ), in a press release. Under FDA Scrutiny but Not Worried Blackstone Labs was raided by federal authorities in February 2017 a few days after an article on Blackstone Labs, "How Two Florida Gym Rats Conquered the Shadowy World of Dietary Supplements," was published in Men's Journal. In a video interview with PricePlow several months later, Braun talked about the raid and expressed confi dence in his company's compliance. "We have a very good attorney. We are very, very confi dent in the fact that we didn't break any laws," he said. "We have no desire to put out products that are illegal. I stand by my word that we've never done anything [illegal], and I believe that will all be shown in the end. So, I'm honestly really not worried." However, Blackstone Labs released a statement online in response to the government's "false and inaccurate charges." The company vowed to "vigorously defend the right of health-conscious strength athletes, bodybuilders and wellness professionals to access and use nutritional supplements that assist in muscle development and body tone." The company said the government was "overreaching" in the case and challenged FDA's application of the defi nition of a dietary ingredient. Noting this is not the fi rst time the company went up against the government, the statement promised Blackstone is prepared to battle the federal government. "The government intends to destroy the weight lifting industry by making it hard for lifters to use legal nutritional supplements," Blackstone said in the statement. "That will not happen," Braun assured. "We intend to prevail." Deception, Lying and Impersonating an FDA Offi cer Highlight Conspiracy Charge Forty "overt acts" involved in the conspiracy were listed in the indictment as perpetrated by the defendants and several unindicted co-conspirators, including an owner/CEO of a Batesville, Arkansas- based retailer who repeatedly bought and sold Blackstone products. The list of overt acts included many instances where the defendants' communications with each other showed they knew ingredients like DMZ, methadrol, AMP citrate (DMBA), prohormones and SARMs (ostarine) were not legal dietary supplements, but they allegedly hid inventory, shifted sales to shell companies and sold out remaining stock through trusted retailers only. After Blackstone recalled Super DMZ in March 2014, emails in the court records showed it sought to purchase the product's ingredients from China. After receiving a warning letter from FDA advising its Angel Dust product was adulterated, Braun and Singerman told Blackstone employees to sell all remaining inventory of the product, according to the indictment. The next month, Blackstone informed FDA it stopped distributing and selling the product. In 2016, Boccuzzi falsely described himself as an FDA agent in an emailed document entitled "Certifi cate of Free Sale" that he sent a wholesale customer. The indictment stated this email also said, "This is the best I can do. I don't [sic] even feel comfortable doing this because I am impersonating the FDA, and our business could get shut down, tons of people will lose their jobs." Sports Nutrition Firm and Its Execs Indicted for Selling Illegal Substances by Steve Myers

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