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April 12, 2018: Chinese Citizen Pleads Guilty to Mail Fraud Related to Dietary Supplement Scheme


OCI Small Clear Seal 

 

Food and Drug Administration 
Office of Criminal Investigations

 

Zhang Xiao Dong (a.k.a. Mark Zhang), of Shanghai, China, pleaded guilty in Dallas to committing mail fraud in connection with a scheme to sell mislabeled dietary supplements, the Dept. of Justice announced today.  

Zhang was the sales manager for Genabolix USA Inc. & Shanghai Yongyi Biotechnology Co. Ltd., Chinese firms that sell raw ingredients for use in dietary supplements. In pleading guilty, Zhang admitted that he agreed to help sell synthetic stimulant ingredients, including the substance known as 1,4-DMAA, to a purported dietary supplement manufacturer in the United States. According to an indictment returned in October 2017, Zhang & two co-defendants agreed with a confidential government informant to either mislabel the synthetic ingredients or otherwise help to hide the true nature of a proposed dietary supplement from retailers. Zhang admitted that he knew major American dietary supplement retailers would refuse to carry supplements known to contain certain stimulants, such as DMAA.  

 

“Americans should be able to trust the products they consume are safe,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will continue to investigate & prosecute those who enable the sale of mislabeled and potentially unsafe dietary supplements.”

           

Zhang pleaded guilty before U.S. Magistrate Judge David Horan of the Northern District of Texas. He faces a statutory maximum sentence of 20 years of imprisonment. The Court set sentencing for Oct. 15.

 

“U.S. consumers trust that their dietary supplements are safe & contain appropriate labeling. When unscrupulous producers add undeclared or misidentified ingredients to dietary supplements, there is no assurance that the product is safe for consumption,” said Catherine A. Hermsen, Acting Director, FDA Office of Criminal Investigations. “The FDA will continue to pursue and bring to justice those who participate in fraudulently marketing dietary supplements to the detriment of public health.”

 

Zhang was arrested in September 2017 along with a co-defendant, Gao Mei Fang, while attending a dietary supplement trade show in Las Vegas. Gao pleaded guilty on April 3, 2018. A third defendant named in the case, Hu Chang Chun, is not believed to be in the United States.          

           

The case was investigated by FDA’s Office of Criminal Investigations. The case was prosecuted by Kate Rumsey, Assistant United States Attorney for the Northern District of Texas; & David Sullivan & Patrick R. Runkle, Trial Attorneys in the Dept. of Justice’s Consumer Protection Branch.

 

Additional information about the Consumer Protection Branch & its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.

 

Topic(s): 

Consumer Protection

Health Care Fraud

 

Component(s): 

Civil Division

USAO – Texas, Northern

 

Press Release Number: 

18-453

 

 

 

 

Updated: April 19, 2018 — 5:24 pm

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