FDA and Genapharm, Inc
- 03-17-2004, 12:36 PM
FDA and Genapharm, Inc
FOR IMMEDIATE RELEASE
March 17, 2004
Media Inquiries: 301-827-6242
Consumer Inquiries: 888-INFO-FDA
FDA and the U.S. Attorney for the Western District of Texas Announce Guilty Plea in Drug Counterfeiting Case
The Food and Drug Administration and the U.S. Attorney for the Western District of Texas announced today that Hadi M. Ghandour, owner of Genapharm, Inc. of Austin, Texas, pled guilty on March 9, 2004 to four counts of an indictment charging conspiracy to introduce misbranded and unapproved new drugs into interstate commerce, counterfeiting human growth hormone, and possessing controlled drugs with intent to distribute.
Through his plea Ghandour admitted engaging in a conspiracy to sell unapproved, misbranded, counterfeit and Schedule I controlled drugs from 1999 to 2001. Ghandour sold these drugs through Genapharm, Inc., Biosculpt Technologies, Inc., and through a website, www.genapharm.com. All were businesses he controlled and represented as wholesalers of dietary sports supplements. Ghandour also sold drugs directly to consumers, such as body builders, and through other channels.
"Americans must have confidence that the drugs offered for sale are, in fact, genuine; that dangerous drugs and dangerous dietary supplements will be removed from the market; and that the perpetrators of illegal drug schemes are punished to the full extent of the law," said FDA Commissioner Mark B. McClellan, M.D., Ph.D.
The drugs included:
Tiratricol, tri-iodothyroacetic acid (TRIAC), a potent thyroid hormone
1,4 Butanediol, which converts into gamma hydroxybutyric acid or GHB, a Schedule I Controlled Substance, when metabolized by the human body
Counterfeit Nutropin AQ (Somatropin), HGH, or recombinant human growth hormone, manufactured by Genentech, Inc. for children with growth hormone deficiency
4 Bromo-2, 5-dimethoxyphenethylamine (2CB or Nexus), a Schedule I Controlled Substance
BZP, if combined with 1-(3-trifluoromethylphenyl) piperazine (TFMPP) has stimulant and hallucinogenic effects similar to 3,4-methylenedioxymethamphetamine (MDMA), or ecstasy, a Schedule I Controlled Substance.
Hadi Ghandour faces up to five years in prison and a fine of $250,000 on each count. It should be noted that Ghandour was previously convicted in 1998 of counterfeiting drug labels.
Two other persons involved in these offenses, Derek Ettinger and Joel Desmarais, were previously convicted and sentenced. Derek Ettinger was sentenced on May 15, 2003 to 30 months in a Federal Correctional Institution followed by three years of supervised release for his role in counterfeiting human growth hormone and possession with intent to distribute controlled substances. Joel Desmarais was sentenced on May 30, 2003 to 36 months supervised release for introducing an unapproved new drug into interstate commerce and aiding and abetting.
The investigation was conducted by Special Agents of FDA's Office of Criminal Investigations (OCI) and the Drug Enforcement Administration (DEA), with assistance from the Dallas District Office of the FDA and Texas Department of Health. The prosecution was handled by Assistant United States Attorneys Michelle McElroy and Elizabeth Cottingham and FDA attorney Laura Pawloski, who acted as a Special Assistant United States Attorney.
FDA issued a public warning in 1999 against consuming a metabolic enhancer containing tiratricol, because of serious health consequences associated with this product, including heart attacks and strokes. FDA had identified tiratricol as a Class I Health Hazard, indicating a potentially life-threatening risk and declared it an unapproved new drug.
In August 2000, FDA's Office of Regulatory Affairs (ORA) inspected Genapharm after receiving information that it continued to distribute tiratricol capsules despite the health hazard designation. Ghandour told the inspector that manufacturers were not making the product because of the health hazard warning, that he had no product in stock, and that he did not plan on dealing with tiratricol in the future. In fact, Ghandour, with the assistance of co-conspirators, Derek Ettinger, Joel Desmarais, and others, sold twice the amount of tiratricol (7,938 units) in the nine months following the inspection than in the eight months leading up to the inspection (3477 units).
In April 1999, a man in Austin , Texas died as a result of consuming 1,4 butanediol. The person who gave the product to the victim identified the product as "Thunder Nectar," a product that had previously been manufactured by Genapharm. In May 1999, FDA issued a public warning about products containing 1,4 butanediol and declared the products to be a Class I Health Hazard. Ghandour told a newspaper reporter and an FDA Office of Criminal Investigations (OCI) agent that he did not use 1,4 butanediol in his products because he knew it was dangerous when consumed with alcohol, and he knew people were abusing his products.
In fact, from January 2000, through May 2001, Ghandour sold approximately 13,420 units of products containing 1,4 butanediol identified as "Dream On" and "Miracle Growth."
Ghandour's labels falsely listed the distributor as "Sleep Aid" in Phoenix , Arizona . The label failed to list 1,4 butanediol as an active ingredient.
Moreover, the products were identified to customers as either a cleaner or a plant growth stimulator. Genapharm also supplied 1,4 butanediol to an Ohio business operating as MINDCANDY, which sold it as a GHB substitute called, "Thunder II."
In May 2001, OCI searched the residence of Derek Ettinger, a Genapharm employee, and seized vials labeled as Nutropin AQ. A sample of this lot was tested by FDA and determined to be counterfeit.
Nutropin AQ is a registered trademark of Genentech, Inc. and is the brand name for its somatropin product. Subsequent investigation revealed that Genentech had not manufactured any of the product seized from Ettinger's residence and had not authorized use of its trademark.
Defendant Ghandour admitted to purchasing insulin vials, graphics for the lot numbers and expirations dates, and a labeling machine, then re-labeling the vials as Nutropin AQ.
BZP and Nexus
Ghandour and Ettinger began distributing 4 Bromo-2, 5-dimethozyphenethylamine (2C-B or Nexus), a Schedule I Controlled Substance, in the fall of 1999 as a substitute for 3-4 methylenedioxymethamphetamine (MDMA).
In January 2000, after his customers became dissatisfied with the effects of Nexus, Ghandour began purchasing Benzylpiperazine (BZP) from Sigma-Aldrich, a Missouri firm. Sigma-Aldrich became suspicious of these purchases and Ghandour was forced to look for another distributor. Ghandour ordered BZP in bulk from India and had the raw product pressed into tablet form with insignia to imitate MDMA, or ecstasy, a Schedule I controlled substance. By March 2000, Ghandour was distributing the BZP throughout the United States . Over 5,000 tablets stamped with butterflies, smiley faces, bulls, and crowns found at Ettinger's home were determined to contain BZP.
On June 13, 2002 , FDA issued a Warning Letter to the President of Muscle Lane, Inc. of Austin , Texas for marketing a product called Adrenalin, which according to the firm's website, www.gennapharm.com , contained among other ingredients, nor-ephedrine HCl, a drug. Statements on the Internet web site indicated the product was a dietary supplement intended to be thermogenic and to "burn" fat. The FDA informed Muscle Lane, Inc. that Adrenalin is an unapproved new drug in violation of the Federal Food, Drug and Cosmetic Act. FDA informed the company in the Warning Letter that failure to correct the violations would result in an enforcement action being initiated by the FDA without further notice.
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