Thursday, May 29, 2014

Hi Tech Pharmaceuticals Ordered to Pay $40M in Sanctions

A USDCT Judge in Georgia has imposed a $40 million sanctions against Hi-Tech Pharmaceuticals, Inc. (“Hi-Tech”), Jared Wheat, Sean Smith, and Dr. Terrell Mark Wright. The sanction arose from the defendants’ failure to comply with orders obtained by the U.S. Federal Trade Commission (FTC) requiring that they cease making unsubstantiated claims about their products and include a health-risk warning on products containing yohimbe.
On November 11, 2004, the FTC filed a complaint alleging that several defendants had violated Sections 5 and 12 of the Federal Trade Commission Act (hereinafter “the FTC Act”), 15 U.S.C. §§ 45(a) and 52, by making false
and unsubstantiated claims in connection with their advertising and sale of various dietary supplements.
The court entered two separate final judgment and permanent injunctions against the defendants on December 16, 2008, enjoining them from several activities related to their previous violations of the FTC Act. The first final judgment and permanent injunction is against National Urological Group, Inc., Hi-Tech, Wheat, Thomasz Holda, and Smith hereinafter “the Hi-Tech Order”). The second final judgment and permanent injunction is against Wright (hereinafter “the Wright Order.”) Section II of each of the injunction orders prohibied the defendants from advertising weight-loss products using claims that the products cause rapid or substantial weight loss and fat loss or claims that the products affect metabolism, appetite, or fat unless those claims are substantiated with “competent and reliable scientific evidence.”

Here's the Order: