Feds File Criminal Charges Against Dietary Supplement-Makers

By Siddharth Cavale and Diane Bartz

USPlabs, which made the workout supplement Jack3d, and six of its executives face criminal charges for the unlawful sale of the nutritional supplement, the U.S. Justice Department said Tuesday in announcing a larger probe by multiple federal agencies aimed at stemming the sale of unproven nutritional supplements.

Six executives with USPlabs and a related company, S.K. Laboratories, face criminal charges related to the sale of unlawful dietary supplements. Four were arrested Tuesday and two are expected to surrender, the Justice department said.

%VIRTUAL-pullquote-The defendants knew of studies that linked the products to liver toxicity.%The indictment says that USPlabs used a synthetic stimulant manufactured in China to make Jack3d and OxyElite Pro but told retailers that the supplements were made from plant extracts.

"The defendants knew of studies that linked the products to liver toxicity," the department said in a press statement.

News of the impending press conference earlier sent share prices of GNC Holdings, Vitamin Shoppe and Herbalife lower. But those companies were not named in the subsequent announcement and all recovered to close down slightly.

GNC Holdings (GNC) closed down 6.4 percent, Vitamin Shoppe (VSI) ended down 5 percent and Herbalife (HLF) slipped 1.5 percent.

Along with the Justice Department, the news conference was attended by representatives of the U.S. Food and Drug Administration, the U.S. Postal Inspection Service, the Federal Trade Commission, the Department of Defense and the U.S. Anti-Doping Agency.