Hi-Tech Ordered to pay over $40M for Deceptive Diet Supplement Advertising

Posted On June 15th, 2014 By CSSFIRM.COM

On May 14, 2014 a Georgia federal court handed out contempt sanctions, ordering Hi-Tech Pharmaceuticals and three of its directors to pay more than $40 million to consumers for violating a 2008 court order relating to the advertising and labeling of Hi-Tech’s diet supplements. The court also demanded an immediate recall of four of the company’s products dietary supplements – Fastin, Lipodrene, Benzedrine, and Stimerex-ES – that featured deceptive labeling with false claims regarding the products’ effectiveness.

Procedural History

In 2008, the court enjoined the defendants from advertising the weight-loss products without substantiated, competent and reliable scientific evidence, but in 2011, the company began running print advertisements in national magazines and through its website with claims that violated the 2008 injunction. The advertising was not removed from the company website until January 2014, approximately five months after the court had found the defendants in contempt.

In 2009, Hi-Tech Pharmaceuticals CEO Jared Wheat and several other executives spent 18 months in federal prison for violating an FDA request barring him from marketing or selling more than a dozen different supplements. It was in prison that Wheat implemented Hi-Tech’s national marketing campaign that was featured in USA Today, Cosmopolitan, Women’s Day, Redbook, and The National Enquirer, among others.

Dangerous Side Effects

Besides questionable effectiveness regarding weight loss, the supplements in question can also lead a number of potentially serious side effects:

  • Fastin – highly addictive and can lead to physical and psychological dependence
  • Lipodrene – may cause nausea, dehydration, constipation, sleep complications, and cardiovascular issues
  • Benzedrine – a stimulant with characteristics similar to amphetamine
  • Stimerex-ES – raises heart rate and blood pressure

Wheat and Senior Vice President Sean Smith will face jail time if they fail to comply with the court’s order, and to date they still have not fully paid the $15.8 million in regulatory fines they were ordered to pay in 2008. The judge also permanently banned Wheat from continuing to rely on unsubstantiated representations to sell expensive supplements. The contempt actions came at the urging of the Federal Trade Commission, the U.S. Food and Drug Administration, and Georgia federal prosecutors.

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