Two Dietary Supplement Companies Found Guilty of Criminal Contempt for Violating Consent Decree

Jun 14, 2011   

A New Jersey jury found two dietary supplement companies guilty of several counts of criminal contempt for violating a consent decree, see Department of Justice announcement. A consent decree is an agreement wherein the defendant agrees to take voluntary action to remedy nonconformance and, in turn, settles a pending civil suit with the government. Criminal contempt generally refers to conduct that defies or disrespects the court and impedes the administration of justice.

Dr. Mohamed Desoky is the owner of two dietary supplement companies, Quality Formulation Laboratories, Inc. and American Sports Nutrition, Inc. These companies manufactured and distributed food products and supplements, including protein powder mixes and other dietary supplements, under the American Sports Nutrition brand and other private labels across the United States.

In December 2008 and January 2009, the U.S. Food and Drug Administration (FDA) launched an investigation of Desoky and his companies in Paterson, New Jersey. During the course of that investigation, the FDA observed several instances of noncompliance with good manufacturing principles (GMPs), see FDA Inspection Form here.

Based on the results of the FDAs investigation, the Justice Department filed suit against Desoky and his companies. In the complaint, the Justice Department claimed that Desokys companies produced adulterated food because its operations failed to meet the FDAs regulations for GMPs and that its insanitary conditions may have resulted in products contaminated with filth. The complaint also alleged that Desokys companies caused misbranding of food because their product labels failed to indicate the presence of a major allergen, milk.

The complaint alleged that upon observation of the production area, the FDAs investigator found raw ingredient bags with rodent urine stains and numerous holes where rodents had gnawed completely through the packaging. Furthermore, the investigator allegedly surveyed that at least two dead rodents”one of which was apparently cut in half”were found in production or product storage areas. The complaint went on to allege observation of multiple instances of live, active rodents and the existence of rodent excrement throughout the factory. The companys alleged “failure to have adequate control over their manufacturing process, sanitizing and cleaning operations, and employee training” may have resulted in a product containing a major allergen due to “cross-contamination” or “cross-contact” during the manufacturing process.

In March 2010, Desoky signed and entered into a consent decree of permanent injunction that required the defendants to immediately cease all manufacturing operations, including directly or indirectly receiving, manufacturing, preparing, packing, labeling, and distributing any article of food, including dietary supplements, see FDAs announcement of consent decree here. Pursuant to this consent decree, Desoky and his companies were prohibited from reopening their operations in New Jersey or elsewhere without first correcting their violations and obtaining FDA approval.

Soon thereafter, the FDA conducted another investigation of the Quality Formulations facility and found evidence that some manufacturing and distribution had occurred after the consent decree came into effect. Additionally, the FDA determined that Desoky transported some employees and equipment to a new facility to continue manufacturing and shipping products. As a result of this violation, the government filed criminal contempt charges against Desoky, his companies and Desokys two sons, who, even with the knowledge of the consent decrees terms, allegedly helped Desoky set up the new manufacturing facility in Congers, New York. Criminal charges were filed in the U.S. District Court for the District of New Jersey and the jury returned a guilty verdict. Sentencing has been scheduled by the court for September 7, 2011.

The jurys guilty verdict may be a strong indication to food and dietary supplement manufacturers of the importance of compliance with food safety laws. This case raises interesting questions about the role of consent decrees in future litigation with the FDA, as well as the FDAs future regulation of dietary supplement companies and GMPs. Fuerst Ittleman will continue to monitor the progress of these issues. For more information, contact us at contact@fidjlaw.com.