Hi-Tech loses $15.8 million in FTC fraud case

ATLANTA Coupled with some harsh rebukes, U.S. District Judge Charles Pannell earlier this month ordered Hi-Tech Pharmaceuticals to forfeit $15.8 million for fraudulent claims made on behalf of their dietary supplements sold online.

According to the Fulton County Daily Report, Pannell released the findings in an order granting summary judgment to the Federal Trade Commission after a four-year legal battle against the National Urological Group (doing business as Warner Laboratories), the National Institute for Clinical Weight Loss Inc. and Hi-Tech Pharmaceuticals Inc. (doing business as Planet Pharmacy, Global Pharmacy and others).

The companies had marketed their weight loss diet aid ThermaLean from their web sites and via spam e-mail with claims that it caused fat loss of more than 600 percent. The companies also marketed a second weight loss drug, Lipodrene, and the “natural” erectile dysfunction remedy Spontane-ES.

“All of the products at issue in this case are dietary supplements and/or drugs that are marketed as promoting health benefits in the form of weight loss and sexual enhancement,” Pannell’s order stated. “Not surprisingly, all of the unsubstantiated representations that the FTC claims the advertisements make are related to the safety and/or efficacy of the dietary supplements, and correspondingly, implicate health concerns.”

In court papers, Hi-Tech attorneys argued the company was not subject to FTC regulatory fines because—while it produced and marketed “multiple products under the name Lipodrene”—those products are “completely different in look and formulation” from the Lipodrene that the National Urological Group marketed in the advertisements cited in the FTC complaint, the Fulton County Daily reported.

However, Hi-Tech was also subject of a 2003 district court ruling, granting a request by the Food and Drug Administration to prevent the company from marketing and selling the same products that were subject to the latest ruling. In addition, Hi-Tech is one of 12 defendants named in a federal indictment that charges them with fraud, adulteration or misbranding of drugs, the introduction or distribution of drugs not approved by the Food and Drug Administration, and violations of federal drug import laws, according to published reports.

The criminal case is pending before U.S. District Judge Jack Camp, the Fulton County Daily reported.