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Judge Orders Hi-Tech Pharmaceutical Execs Jailed for Contempt

U.S. District Senior Judge Charles Pannell Jr. has ordered the CEO and senior vice president of Hi-Tech Pharmaceuticals, Inc. be jailed for contempt of court for failing to recall four dietary supplements as directed by a May, 2014 judgment that found them in violation of a 2008 court order. The May, 2014 judgment also ordered them to pay more than $40 million for violating the 2008 order.

The May order directed an immediate recall of four dietary supplement products, Fastin, Lipodrene, Benzedrine and Stimerex-ES. However, the Judge Pannell found that the defendants, CEO Jared Wheat and Stephen Smith, senior vice president in charge of sales, have not complied with the recall order.  

The case began in November, 2004, when the FTC charged Hi-Tech Pharmaceuticals, Wheat and Smith with making deceptive claims about the effectiveness and safety for weight loss of products containing ephedra.

The complaint also included a charge of deceptive claims for a product containing yohimbine that was marketed as an erectile dysfunction treatment and also named National Urological Group, Inc. and National Institute for Weight Loss, Inc., Michael Howell and Dr. Terrill Mark Wright as defendants.

In 2008, the marketers were ordered  to pay $15.8 million, and were permanently barred the from claiming that their products cause rapid or substantial weight or fat loss, or affect body fat, appetite, or metabolism unless the claims are true and supported by scientific evidence.

In November 2011, the FTC sought sanctions against Hi-Tech, Wheat, and Smith for violating the 2008 order. The FTC alleged that the defendants made prohibited weight loss claims for Fastin, Lipodrene, Benzedrine and Stimerex-ES dietary supplements without having any competent and reliable scientific evidence to substantiate the claims.

In August 2013, the court found the defendants in contempt for violating the 2008 order and subsequently ordered the $40 million judgment and product recalls.

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