Judge Issues Order to Jail Two Dietary Supplement Sellers for Contempt

A federal district judge in Atlanta has issued an order finding that two dietary supplement marketers failed to comply with a previous court order that required them to recall purported weight-loss products that they deceptively pitched to consumers.

The current order, issued on September 2, requires Jared Wheat and Stephen Smith to be jailed until they comply with the recall requirements. Both Wheat and Smith have surrendered.

The defendants, who ran an operation known as Hi-Tech Pharmaceuticals, Inc., continued to deceptively market weight-loss products in violation of a 2008 federal court order, with unsubstantiated claims such as “rapid fat loss,” “fat burner,” “thermogenic,” and “curbs the appetite.” Earlier this year, the FTC received a $40 million judgment in the case – one of the largest ever against a dietary supplement manufacturer.

Specifically, in order to be released from jail, Wheat and Smith must: 1) ensure that the products are not available for purchase from retail stores; 2) send out a proper recall notice for each product; 3) ensure the recall notice has been distributed to all retailers and anyone else associated with the products; and 4) ensure that links to the recall notices are prominently displayed on each page of the company’s website.

In issuing the order, the judge wrote: “The continued availability of the violative products in retail stores is not surprising considering the lack of effort by the defendants to comply with the court’s order to effectuate a complete recall. Despite [their] assurance to the contrary, a recall was and is necessary to protect consumers.”

A summary of the FTC’s ongoing case against Wheat and the other Hi-Tech defendants is provided in a press release the Commission issued last month, in anticipation of the court’s most recent ruling.

This case is part of the FTC’s ongoing efforts to protect consumers from misleading advertising. The order determining the sanctions against Hi-Tech Pharmaceuticals, Inc.; Jared Wheat, Stephen Smith, and Dr. Terrell Mark Wright was issued by the U.S. District Court for the Northern District of Georgia, Atlanta Division, on May 15, 2014.

The FTC is a member of the National Prevention Council, which provides coordination and leadership at the federal level regarding prevention, wellness, and health promotion practices. This case advances the National Prevention Strategy’s goal of increasing the number of Americans who are health at every stage of life.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.