Sports Nutrition Guru Trailed by Allegations

With a background in music and no formal science training, Victor Conte Jr. struggled for nearly two decades to build a successful sports nutrition company that now counts baseball superstar Barry Bonds, Olympic gold medalists and middle-age weekend warriors among its disciples.

But along with endorsements from top athletes and skyrocketing sales of its most famous product, Conte’s Bay Area Co-Operative Laboratories left a trail of discontented shareholders, vendors and former employees.

Critics accuse Conte, 53, of failing to honor agreements, refusing to pay debts and misleading small investors who provided start-up funds, according to a review of numerous lawsuits and other court documents.

“It seems everything he did was always on the sly,” said Carl Minerva Jr., who together with his father invested in Conte’s business in the early 1990s.

Now, Conte and Burlingame-based BALCO are at the center of a sports drug scandal that has attracted worldwide attention. U.S. Anti-Doping Agency officials allege that Conte’s company supplied athletes with a new designer steroid, tetrahydrogestrinone, or THG, that was undetectable under standard testing methods.

Federal and local law enforcement agents searched the offices of BALCO on Sept. 3, and at least 40 athletes have been subpoenaed to testify before a federal grand jury in San Francisco, including Bonds, New York Yankee first baseman Jason Giambi, world-class sprinter Kelli White and welterweight boxing champion Sugar Shane Mosley.

Little is known about the grand jury, which was believed to have started hearing testimony in secret last week in the federal building here.

Internal Revenue Service agents were among those who searched BALCO’s offices. And the grand jury probe comes several months after the federal government sued BALCO and another company, alleging they were paid up to $1.8 million for unnecessary tests by the Medicare program in the mid-1990s.

Conte has said the claims in the civil suit are untrue. He also has denied providing athletes with any illegal substances. His friends, family and associates said in interviews that Conte for years has condemned the use of steroids and cautioned athletes about health hazards. Conte and his attorney, Robert Holley of Sacramento, declined to be interviewed for this article and did not respond to questions submitted in writing.

Supporters say Conte was able to rise from Fresno City College student to nutrition guru by utilizing a photographic memory to master thousands of arcane medical journals and laboratory reports.

“He is highly creative [and] an extremely egotistical, self-centered individual,” said Richard A. Goodman, a former bodybuilding gym proprietor who worked as a salesman and researcher at BALCO. “He is totally absorbed with his work.”

From his drab corner office facing U.S. 101 near San Francisco International Airport, Conte attracted superstars who were willing to promote his company’s services and products for free, a rarity in an era when athletes are paid millions of dollars to endorse sports products.

In 1988, Mac Wilkins, former world-record holder in the discus and 1984 Olympic silver medalist, told the San Mateo Times that the benefits of Conte’s nutrition analysis testing “are so dramatic I’m amazed it’s legal.”

Bonds was quoted in the June issue of Muscle & Fitness magazine saying that, beginning in the winter of 2000, he visited BALCO’s offices every three to six months to get his blood checked for zinc, magnesium and other minerals. He then would buy supplements from Conte if the tests indicated he was deficient in any of the minerals. Bonds became a proponent of Conte’s biggest-selling supplement, ZMA, a combination of zinc and magnesium.

“I’m just shocked by what they’ve been able to do for me,” Bonds said of Conte and his BALCO lab. “People don’t understand how important this is.”

Many employees and vendors said Conte’s business style was unorthodox.

In a deposition taken last year, Conte said he avoided signing written agreements, preferring verbal settlements instead. Court records show that the one case where Conte signed an exclusive retail agreement with a national distributor lasted less than four months because of alleged breaches of contract on Conte’s part.

He also was subjected to numerous federal, state and local tax liens over the years.Records of Conte’s 1995 divorce in San Mateo County documented some of his financial problems. He and his wife ran up $82,105 in unpaid charges with 30 companies, most of them department stores and credit card companies. In the divorce papers, Conte blamed most of the debt on his wife’s spending.

Robert Bruening, attorney for the law firm that represented Conte’s ex-wife, Audrey, declined to discuss Conte in a telephone interview. “Victor Conte is not anyone we would care to get involved with in any further legal squabbles. He is a scary guy.”

Few people had heard of Victor Conte Jr. in the 1980s when he began an unlikely transition from jazz bassist in the garage band Pure Food and Drug Act to purveyor of performance-enhancing supplements for elite athletes.

In the mid-1980s, the nutritional supplements industry was in its infancy, and Conte carved out a foothold by combining two elements that appealed to athletes and health aficionados -- sophisticated tests and nutritional products purporting to improve performance.

Because few laboratories had the necessary testing equipment, many doctors turned to BALCO for analysis of human blood, urine and other substances. Conte’s lab also developed protocols and products for addressing vitamin and mineral deficiencies that turned up in the testing. And Conte wasted no time in reaching out directly to athletes and selling nutritional supplements.

As the 1988 Summer Olympics in Seoul approached, Conte expanded his clientele.

Willy Cahill, a U.S. Olympic assistant judo coach who had known Conte for years, said he brought the entire team to BALCO for testing before the Seoul Games to see if the athletes were performing at peak levels.

Soon articles about Conte and testimonials from athletes and coaches began appearing in local newspapers.

After watching several of his “BALCO athletes” win medals in Seoul, Conte threw a party for them back home in San Mateo.

“It was a pig roast in our backyard, and all these hammer and discus throwers and runners came,” said Alicia Conte, 23, one of the nutritionist’s three daughters. “My dad had these medals made up for them. He was so proud of what they had done and he knew he had contributed to their success.”

Conte had compiled a long list of athletes he had tested, including the judo and track and field Olympians, as well a few pro football players. The list became part of the November 1989 business plan he assembled to attract investors in BALCO. So did an agreement Conte reached with 24 Hour Nautilus Fitness Centers to provide biochemical analysis for Northern California members.

But, in a sign of troubles to come, the deal fell apart. Company officials said Conte’s testing and products did not appeal to their members.

By the mid-1990s, several BALCO investors said, they felt cheated by Conte.

Minerva, an unemployed Burlingame welder, said he and his father began to get suspicious when they never received any dividends from their $5,000 investment.

“I remember telling my dad, ‘Let’s get out.... There’s something wrong here.’ ”

Gerald Speiser, a retired airline mechanic from Pike, Calif., said he has yet to see a dime of the $14,000 he invested in BALCO. Also in the early 1980s, Speiser said, he lent Conte $5,000 -- an obligation he said Conte has yet to pay off.

Others said they were never paid for work they performed for Conte’s company. In the mid-1990s, Conte asked a Marin County company to set up a system for billing Medicare and private insurers for BALCO. The president, Andrew Kluger, said Conte failed to pay for the work.

Records show that Kluger’s company sued and won an $8,824 default judgment against BALCO in 1998. But Kluger said he never was able to collect because Conte claimed he had financial difficulties after his divorce.

Two BALCO employees sued Conte in 1995 and again in 1997 to recover $21,000 in unpaid overtime, records show. The two employees, a lab technician and a payroll supervisor, were shareholders in the company.

Friends and relatives saw a different side of Conte, who they said was victimized by jealous competitors.

“Victor is under investigation over the mere fact that athletes who work with him are doing well,” said Cassie Ewers, Conte’s former sister-in-law.

Mary T. Stein, Conte’s former mother-in-law, who worked at BALCO as a secretary, spoke highly of the nutrition advocate despite his bitter divorce from her daughter. She said Conte put people ahead of profits.

“He was dedicated,” she said. “When he heard about the problem with breast implants, he wanted to help and started to do some testing. He looked at the unhealthy iron content in water. He wanted to use his knowledge of minerals to help people who were suffering.”

In 1993, four years after BALCO was licensed to perform blood and urine testing in California, the state health department ordered Conte’s facility to stop testing women with silicone breast implants. Inspectors had determined that BALCO had misrepresented the accuracy of lab results, said department spokesman Ken August.

The action was taken after the state received two complaints from women who claimed BALCO had falsified test results. August said BALCO chose to stop testing women for silicone rather than validate the results or make corrections.

On Sept. 22 of this year -- nearly three weeks after the FBI and other federal agencies raided BALCO’S offices -- the laboratory closed “for financial reasons” and voluntarily terminated its state license, August said.

Even though the lab closed, Conte was not out of business. He also operates Scientific Nutrition for Athletic Conditioning Systems Inc., which he founded in 1994 to market nutritional supplements.

Unlike BALCO, the company is wholly owned by Conte and in recent years has shown a remarkable rise in revenue. After reporting gross income of less than $12,000 for the first four years, sales soared to $449,633 in 1999 and $1.18 million in 2000.

Conte scored a big break for his fledgling company in December 1998 when he negotiated an exclusive agreement with Environmental and Applied Sciences Inc., a large distributor of nutritional products based in Golden, Colo. Conte’s company received $75,000 in advance royalties in exchange for granting EAS exclusive rights to distribute a zinc-magnesium-aspartame compound.

The mineral formula, which became known as ZMA, is billed as a natural muscle-building and performance enhancer. Within four months, however, the deal fell apart when EAS officials claimed that Conte’s company did not to live up to its agreement, including failure to provide substantiation for claims of ZMA’s benefits.

The two sides reached a verbal agreement to allow EAS to continue selling the zinc product along with other distributors. ZMA went on to become Conte’s best seller and is still widely available on the Internet under a variety of labels.

Many of Conte’s business associates say they are awaiting the outcome of the grand jury investigation before passing judgment.

Dr. Richard Kunin, a San Francisco nutrition specialist who used BALCO’s testing services, said Conte is a survivor.

“I don’t see him as deranged,” Kunin said. “From what I know, he will surprisingly slip through and get an apology.”

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Times staff writer David Wharton and researchers John Tyrrell and Penny Love contributed to this report.