SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., business owner pleaded guilty in federal court today to his role in a conspiracy to fraudulently market dietary supplements over the Internet with illegal claims that these supplements could prevent, treat or cure a number of diseases. Several Web sites were used to sell more than $17.4 million worth of products in 2005 and 2006.
Charles Thao, 42, of Springfield, pleaded guilty before U.S. District Judge Richard E. Dorr this morning to his role in conspiracies to violate the Food, Drug and Cosmetic Act, to defraud the United States, to commit wire fraud, to commit mail fraud and to commit money laundering.
Thao admitted that he and his wife, co-defendant Mai Lor, 25, also of Springfield, contracted with co-defendant Tony T. Pham, 41, of Grand Rapids, Mich., to market and distribute the dietary supplements. Co-conspirators claimed that six products sold over the Internet with a computer had been proven reliable through clinical testing for the treatment and prevention of diabetes, irritable bowel syndrome, gout, high cholesterol, high blood pressure, heartburn and diarrhea. In reality, no clinical testing had been performed.
Lor pleaded guilty on Friday, Feb. 5, 2010, to her role in the conspiracy to commit wire fraud. Lor was co-owner of Medycinex. At Thao’s direction, Lor also formed Bio Nutrasource, LLC, located in Springfield, to carry on the business previously conducted by Medycinex.
Pham pleaded guilty on July 2, 2009, to his role in the conspiracy to violate the Food, Drug and Cosmetic Act and to one count of wire fraud. Pham owned and operated Techmedica Health, Inc., located in Grand Rapids. Pham admitted that he used Techmedica to repackage, sell, market, and distribute unapproved new drugs and misbranded drugs over the Internet. Web sites used by Techmedica contained materially false testimonials, product information, and identification of medical professionals.
Techmedica fabricated fraudulent customer identities using photographs purchased from Istockphoto.com. Testimonials attributed to these fraudulent identities touted the effectiveness of the unapproved new drugs and misbranded drugs. Techmedica also posted one of the Istockphoto.com photographs on their Web sites to fabricate a non-existent physician, Dr. Judy Hamilton, for the purpose of lending authenticity to and endorsing product claims about Diabeticine for customers with Type I and Type II diabetes. The person identified as Dr. Hamilton was in fact a model from California. This same model’s photograph was also used by Pham on another Web site to fabricate a non-existent nurse, Bethany Hunt, RN, to tout the effectiveness of the unapproved new drugs and misbranded drugs.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Food and Drug Administration – Office of Criminal Investigation.
Source: Office of the US Attorney Western District of Missouri
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