U.S. District Court Imposes $40M Judgment Against Hi-Tech Pharmaceuticals

An Atlanta district judge issued an order on October 16, finding several defendants in contempt for violating previous court orders associated with the sale of weight loss supplements.

The order imposes an approximately $40 million judgment against National Institute of Weight Loss, Inc., National Urological Group, Inc., Hi-Tech Pharmaceuticals, Inc., Dr. Terrill Mark Wright, Stephen Smith, Jared Wheat, Michael Howell and Thomas Holda.

In November 2004, the Federal Trade Commission filed a lawsuit against the defendants, charging them with making deceptive claims about the safety and efficacy of “Lipodrene” and “Thermalean.” The defendant claimed the supplements contained Spontane-ES, a supposed erectile dysfunction treatment and ephedra.

A federal district court found in favor of the Federal Trade Commission in December 2008. The defendants were ordered to pay $15.8 million, which would be utilized to compensate injured consumers. The court order permanently barred the defendants from representing their products as rapid weight or fat loss, appetite suppressing and metabolism booster dietary supplements, unless they had scientific evidence to back it up.

The FTC sought sanctions in November 2011 against Hi-Tech, Smith and Wheat for violating the 2008 order. FTC alleged in 2009, the defendants made claims that four of its supplements, Benzedrine, Fastin, Stimerex-ES and Lipodrene, offered weight loss capabilities without having reliable and competent scientific evidence to support those claims.