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Grand Jury Indicts Metabolife, Founder

July 23, 2004|Julie Tamaki and Dan Morain | Times Staff Writers

A federal grand jury has indicted Metabolife International Inc. and its founder on charges of lying to the Food and Drug Administration about the dangers of a diet supplement containing the potent stimulant ephedra.

Metabolife and Michael J. Ellis, founder of the San Diego company, were each indicted on six counts of making false statements and two counts of obstructing government efforts to regulate supplements made by the firm with now-banned ephedra, the U.S. attorney's office in San Diego said Thursday.

Ephedra has been blamed for heart attacks, strokes and at least 155 deaths. The debate surrounding the herbal stimulant intensified last year with the death of Baltimore Oriole pitcher Steve Bechler, 23, who had used ephedra. An FDA ban on ephedra took effect in April.

Metabolife was among the largest retailers of dietary supplements in the country thanks largely to sales of Metabolife 356, an ephedra-based product, according to federal prosecutors.

Prosecutors allege Metabolife and Ellis made a series of false statements in letters to the FDA dated April 17, 1998, and Feb. 9, 1999, including that the company had a "claims-free history" and that "Metabolife has never been made aware of any adverse health events by consumers of its products."

The indictment alleges that the company knew the statements were untrue.

In August 2002, Metabolife's sales slumped after it disclosed that its customers had reported nearly 15,000 "adverse events" during the previous five years. Company executives insisted that the product was safe when used according to instructions.

"It is never acceptable for corporations to lie to regulatory agencies, but it is particularly egregious when those lies threaten the public health," U.S. Atty. Carol C. Lam said in a statement.

Added acting FDA Commissioner Lester Crawford: "We will pursue to the full extent of the law those who would seek to mislead consumers by providing false information or impeding investigations of risky products."

Attorney Steve Mansfield, who is representing the defendants, described the six-page indictment as "baseless" and accused prosecutors of "doing the bidding of a disgruntled agency" bent on putting the dietary supplement industry out of business.

"We will vigorously contest each and every allegation and look forward to our day in court," Mansfield said in a statement.

Ellis is scheduled to be arraigned in federal court Tuesday.

Last month, a Texas jury awarded $7.46 million to a woman who suffered a stroke after taking Metabolife 356. The company said it would appeal the verdict, the second in 18 months against Metabolife over supplements containing ephedra.

At its height, Metabolife was a major political player in Washington, in Sacramento and in Texas, where its lawyers and lobbyists tried during then-Gov. George W. Bush's administration to derail Texas health department efforts to ban and later to regulate ephedra in the middle and late 1990s.

In Sacramento, the firm and Ellis donated $175,000 to former Gov. Gray Davis during his tenure. Last year, after he had been recalled and as reports of ephedra-related injuries increased, Davis signed legislation banning sales to minors, and imposing other state restrictions.

Sen. Jackie Speier (D-Hillsborough), who carried the bill that Davis signed into law, said Thursday that Ellis "should stand trial," given the company's public statement that it had received no reports of adverse reactions to its product.

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