Shengyang Zhou assured the American buyers that his Chinese-made weight-loss capsules were safe. Zhou was sure because he had a test — one person eats a whole bottle.
Such a person would have "maybe some stomach problem, but not die," he told undercover federal agents posing as buyers, according to court records.
Making sure customers didn't die was a big priority, Zhou told the agents at a meeting in Bangkok. "If the people die, I will be killed," he said.
Zhou had reason to soothe the buyers' concerns. His supplements were not simply made of herbs and other natural ingredients; they contained a pharmaceutical drug, an appetite suppressant called sibutramine that is no longer sold in the U.S. because of safety concerns.
The U.S. government's pursuit of Zhou, who is now serving time in federal prison, sheds light on an illegal practice that regulators say is increasingly common: adding drugs to products aimed at helping people lose weight, have better sex or bulk up, and labeling them as dietary supplements.
Such "supplements" have sickened customers young and old who do not realize they are consuming powerful medications. Some of the drugs are experimental and not approved for use under any circumstances.
"We consider it a very, very big problem," said Dan Fabricant, director of theU.S. Food and Drug Administration'sDivision of Dietary Supplement Programs. "If we went out there today, to the Web or to certain retail outlets, we would have absolutely no problem finding products that are tainted."
Operations like Zhou's operate largely off the FDA's radar, producing their products in unregulated factories overseas, using anonymous email addresses and aliases to sell them as dietary supplements over the Internet to U.S. middlemen, and shipping them through the mail in packages marked with innocuous labels like "rice."
Since 2008, the FDA has announced warnings or recalls on about 400 dietary supplements containing hidden pharmaceuticals, Fabricant said, adding that the recalls represent a fraction of what is out there. He called the real numbers "staggering."
Trade organizations for the dietary supplement industry say the problem is troubling for consumers and for responsible companies that make and sell supplements.
"Anytime criminals hijack the reputation of a legitimate industry, it is of great concern," Steve Mister, president and CEO of the Council for Responsible Nutrition, wrote in an email. "Consumers need to know that this kind of illegal activity is not indicative of the supplement industry."
Michael McGuffin, president of the American Herbal Products Association, wrote: "This is a limited problem in the context of the world of dietary supplements, since the tens of thousands of lawful supplement products do not contain these ingredients."
Mister called on the FDA to move aggressively against companies selling tainted products labeled as supplements. "Criminal acts deserve criminal punishments," he wrote.
Arrested in Hawaii in March 2010, Zhou is serving time in a federal prison in Youngstown, Ohio, after pleading guilty to trafficking and attempted trafficking in counterfeit goods and aiding and abetting that crime.
Contacted through his attorney, Zhou declined to be interviewed for this story. But documents from his case detail the inner workings of the underworld of a thriving illicit industry.
Zhou's journey from Audi Q7-driving millionaire to Inmate No. 11210-022 began in March 2009, when U.S. Customs and Border Protection agents intercepted a large brown package from China on its way to Colorado, according to court records. Its invoice identified its contents as "dry fruit."
Instead of fruit, the package contained 6,120 capsules of Super Slim and Meizitang, which were sold as dietary supplements but laced with sibutramine and phenolphthalein, a laxative suspected to be carcinogenic, according to court records.
The package led the agents to a Coloradan who had been selling the illicit diet pills on the Internet and gave up the names of his suppliers. Zhou, known to the Colorado distributor as "Tom," was one of them, according to a lengthy affidavit filed in court by special agent Russell Hermann, who was working with FDA's Office of Criminal Investigations.
Posing as buyers, Hermann and his colleagues met Zhou in Bangkok in February 2010, where they negotiated the sale of 200 boxes of the sibutramine-laced supplements, 2 Day Diet and Super Slim, and 1,000 boxes of counterfeit Alli, the popular weight-loss drug. The fake Alli also would contain sibutramine, he promised. The total price was set at $11,000.
During their negotiations with Zhou, the 30-year-old spoke at length about himself and his operation, according to transcripts of their recorded conversations. He told the agents he had a business degree but no scientific or medical degree. He started out working at a large company that produces weight-loss products and said he learned enough to begin making sibutramine-laced copies of popular weight-loss dietary supplements and pharmaceuticals on his own.
His 2 Day Diet, he said, was a copy of a product with the same name in Japan. His Alli was made to look exactly like GlaxoSmithKline's moneymaker even though it contained the wrong active ingredient. Real Alli contains the chemical orlistat, not sibutramine.
Zhou told the agents he wanted to make lots of money, but not so much that he drew the attention of the pharmaceutical company that makes Alli.
"I do not want these products to bring me any trouble, you know," he said. He worried about being sued or being thrown in jail, he told the agents.
His operation was based in Kunming, he told the agents, the large city in southwest China where he was born. Zhou said he had a factory that could make thousands of boxes of 30 types of weight-loss products per day.
He told the agents he had 20 employees, each making $300 a month, and that he sold his product through at least two websites. Zhou said he bought his bottles from one company, empty capsules from another and the sibutramine from yet another.
Zhou's network included a former customer in Plano, Texas, who was paid $1,000 a month to handle his banking at U.S. banks and to receive shipments, which she would then send out to customers. Other distributors included a septuagenarian in Pennsylvania who allegedly sold Zhou's counterfeit Alli on eBay.
To the agents, Zhou fretted aloud about being caught and tossed in jail — but he also indicated he believed what he was doing was commonplace.
"All company do the illegal thing, do you understand?" he was recorded saying. "For example, they produce the capsule no day time, evening they will produce."
His pills made their way to folks looking to lose weight naturally or perhaps hoping to save money on Alli, which retails for more than $60 for a box of 120 capsules.
Elizabeth Miller, acting director of FDA's Division of Non-Prescription Drugs and Health Fraud, said people often turn to supplements after physicians tell them that pharmaceutical solutions would be dangerous because of underlying health problems or other drugs they are taking.
In other words, the very people seeking the supplements often are the ones at highest risk if the products turn out to be laced with hidden chemicals.
One of Zhou's victims was a California emergency room doctor who testified that he bought some of Zhou's Alli on eBay for about half the retail price. Soon after he started taking it, he began to feel ill, he said.
"Eventually over the course of three or four days I became confused, had an insatiable thirst," he testified. "I had headaches and just a general confusion. I would forget where I was at times."
A CT scan showed that he had a stroke, he said, and he eventually left his job. During Zhou's sentencing in June 2011, U.S. District Judge Philip Brimmer ordered Zhou to pay the doctor $87,000 in lost wages and restitution. He also ordered Zhou to pay GlaxoSmithKline more than $400,000.
At the sentencing, Brimmer admonished Zhou for hiding sibutramine in capsules he sold as supplements, which was estimated to have earned him more than $200,000.
"When you know what these products can do to the public, but nonetheless sell them to the public and anticipate that innocent people will be ingesting them, you deserve the top of the guideline range," he said.
Brimmer sentenced Zhou to 87 months in federal prison. Zhou is appealing his sentence; oral arguments are set for September.
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