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Office of Criminal Investigation continued 2001

Chapter 6

Last Update: August 07, 2003

Center for Food Safety and Applied Nutrition

Conspiracy to Traffic in Counterfeit Goods – Counterfeit Metabolife

Following Reports of Adverse Physical Reactions OCI Investigation Discloses Counterfeit Metabolife

This case involves the sale of counterfeit Metabolife 356 (a dietary supplement) in the Houston, Texas area. The investigation was initiated upon information related to complaints received by Metabolife Inc., in San Diego, California, from Houston area consumers. These complaints involved adverse physical reactions experienced as a result of taking "Metabolife 356" purchased in the Houston area. Metabolife Inc., obtained samples of the product taken by the consumers. A laboratory analysis of the sample taken indicated it was a counterfeit of the true Metabolife product. In addition, the sample bottles bore an old label style not currently in use and the company had never used the Lot number on the label. All of the labels used on the bottles sold in the Houston area were counterfeit.

Tom Simmons and Dennis Pack (in separate deals with Calvin Sowa, Michael Moreland and Larry Demetro) acted as the contacts to have the counterfeit Metabolife labels printed. The labels were used on the bottles sold to the public as true Metabolife product.

On February 21, 2001, Pack was convicted in U.S. District Court, Southern District of Texas, of violating Title 18 U.S.C. § 371 – conspiracy to traffic in counterfeit goods. On August 1, 2001, Pack was sentenced to serve three months in prison and was ordered to pay a $5000.00 fine.

On March 5, 2001, Tom Simmons was convicted in U.S. District Court, Southern District of Texas, of violating Title 18 U.S.C. § 371 – conspiracy to traffic in counterfeit goods. On August 1, 2001, Simmons was sentenced to two years federal probation.

Larry Demetro, Calvin Sowa and Mike Moreland were previously sentenced in the Southern District of Texas for violation of Title 18 U.S.C. § 371 – conspiracy to traffic in counterfeit goods.

Adulteration of Milk With Water and Salt

Dairy Farmers and Milk Transporters Convicted and Ordered to Pay Restitution for Adulterating Milk

This criminal investigation was initiated when the United States Department of Agriculture and FDA’s Office of Criminal Investigations received information from the Louisiana Department of Health and Hospitals, Milk and Dairy Programs. This information alleged that numerous milk producers and drivers of milk tankers in Louisiana, Mississippi, and Alabama were adulterating milk with water and salt in order to increase the weight of milk, thereby increasing profits.

After conducting a 10 month audit and completing a comparison of the milk, the Louisiana Health Department identified approximately 60 dairy farmers and milk transporters adding water and salt to milk. The adulterated milk was distributed to various food stores, schools, hospitals, nursing homes, and military installations in the U.S. and internationally.

The joint investigation resulted in the following criminal prosecutions in U.S. District Court, Eastern District of Louisiana:

On April 4, 2001, Larry Edwards, a milk transporter, was sentenced to serve 5 months in prison followed by 5 months home detention, and was ordered to pay restitution in the amount of $23,000.00 to the Dairy Farmers of America, pursuant to his conviction of violating Title 21 U.S.C. 331(a) of the U. S. Food, Drug and Cosmetic Act.

On April 18, 2001, Linnie Walker English, a milk transporter, was sentenced to serve 5 years probation and was ordered to pay restitution in the amount of $7,500.00 to the Dairy Farmers of America, pursuant to his conviction of violating Title 21 U.S.C. 331(a) of the U. S. Food, Drug and Cosmetic Act.

On June 27, 2001, Jeffery Bankston, a milk transporter, was sentenced to serve a 6 month period of home detention followed by 5 years probation, and was ordered to pay restitution in the amount of $11,000.00 to the Dairy Farmers of America, pursuant to his conviction of violating Title 21 U.S.C. 331(a) of the U. S. Food, Drug and Cosmetic Act.

On July 18, 2001, Richard Montet, a dairy farmer, was sentenced to serve a 6 month period of home detention followed by 3 years probation, and was ordered to pay restitution in the amount of $8,482.53 to the Dairy Farmers of America, pursuant to his conviction of violating Title 21 U.S.C. 331(a) of the U. S. Food, Drug and Cosmetic Act.

On July 18, 2001, Clayton Givens, Jr., a dairy farmer, was sentenced to serve a 6 month period of home detention followed by three (3) years probation, and was ordered to pay restitution in the amount of $8,482.53 to the Dairy Farmers of America, pursuant to his conviction of violating Title 21 U.S.C. 331(a) of the U. S. Food, Drug and Cosmetic Act.

On August 7, 2001, Gregory Everett Martin, a milk transporter, was sentenced to 3 years probation pursuant to his conviction of violating Title 21 U.S.C. 331(a) of the U. S. Food, Drug and Cosmetic Act.

Seafood Firm Submits False Records to USCS and FDA

President and Vice President of Seafood Firm Receive Prison Sentences – Firm Ordered to Implement HACCP Plan

FDA’s Office of Criminal Investigations initiated this investigation after receiving a request from the United States Attorney’s Office, Southern District of Florida, to assist the United States Customs Service (USCS) in a joint investigation into the alleged falsification of dump tickets and the subsequent submission of those false records to USCS by Blue Fin International (BFI). BFI submitted the false forms following an FDA inspection that uncovered decomposition in tuna.

On July 5, 2001, David Partridge, Vice President of Blue Fin International Corporation (BFI) was convicted in U.S. District Court for the Southern District of Florida of violating Title 18 U.S.C. § 545 (smuggling), Title 16, U.S.C. § 3372(d)(1), (2), (Lacy Act) and Title 21 U.S.C. § 331 and 333, FD&C Act (misbranding).

On the same date, Partridge was sentenced to serve 4 months in prison, and was ordered to pay a $60,000.00 fine to be paid jointly and severally with the President of BFI and the BFI Corporation.

On July 13, 2001, Luis H. Rodriquez, President of BFI was also convicted in U.S. District Court for the Southern District of Florida, Miami, FL., of violating Title 18 U.S.C. § 545 (smuggling), Title 16, U.S.C. § 3372(d)(1), (2), (Lacy Act) and Title 21 U.S.C. § 331 and 333, FD&C Act (misbranding).

On the same date, Rodriquez was sentenced to serve 4 months in prison, and was ordered to pay a $60,000.00, fine to be paid jointly and severally with the Vice President of BFI and the BFI Corporation.

The BFI Corporation was ordered to share in the criminal fine. BFI was also ordered to draft, update and implement a Hazard Analysis and Critical Control Points Plan with respect to each of its foreign suppliers of seafood, and submit the plan to the FDA District Office, Orlando, Florida. BFI must also take effective measures to insure the segregation by entry number of all imported seafood in order to preclude and prevent commingling products prior to final clearance by USCS and FDA, and will prepare and maintain for inspection, records reflecting the segregation. This is a process required by federal law and regulation that seeks to minimize health risks to the public that can arise at various stages of the handling of imported food products.

The U.S. Department of Commerce, National Marine Fisheries Service, Office of Enforcement also participated in this investigation.

Milk Firm Not Properly Testing for Antibiotics

Firm to Pay $650,000. In Restitution to U.S. for Milk Adulterated With Antibiotics

As the result of joint investigation conducted by the U.S. Department of Agriculture Office of Inspector General and FDA’s Office of Criminal Investigations, Flav–O–Rich Dairy (a division of Land–O–Sun Dairies, LLC), will pay restitution to the United States in the amount of $650,000.00. On October 23, 2001, Flav–O–Rich Dairy entered into an Agreement for Pre–Trial Diversion with the U.S. Attorney’s Office for the Western District of Virginia in Roanoke, VA. The agreement holds criminal charges regarding the introduction of adulterated milk into interstate commerce in abeyance, pending successful completion of a twelve–month period of supervised probation. The agreement also requires Flav–O–Rich Dairy to implement an intensive monitoring and education program to ensure that antibiotic tainted milk is detected and destroyed.

This case originated when it was determined that the Flav–O–Rich Dairy plant in Bristol, Virginia, was not properly testing for the presence of antibiotics in bulk milk tanker trucks that delivered raw milk for processing. As a result, 2% and whole milk products containing antibiotics were shipped in interstate commerce. Random sampling conducted by the Tennessee Department of Agriculture detected the presence of antibiotics in milk packaged by Flav–O–Rich Dairy. The company initiated a voluntary recall of 2% milk products, but failed to recall all of the adulterated whole milk products.

Investigation Discloses Tampering of Hypo–Allergenic Infant Formula

OCI Investigation Identifies Individual Responsible for Tampering with Infant Formula

This tampering investigation was initiated in late June 2000 upon information regarding complaints received by Mead Johnson, the manufacturer of Enfamil baby formula. Specifically, these complaints involved their brand Nutramigen, a hypo–allergenic baby formula. Mead Johnson received two reports of infants becoming ill after consuming the Nutramigen. Upon receiving the suspect containers, Mead Johnson discovered the product to be a milk–based infant formula manufactured by Carnation, bearing a Nutramigen label.

Investigation revealed that cans of the formula in question were purchased at three Meijer Superstores located in Michigan. With the assistance of a Meijer Regional Corporate Investigator, a review was conducted of Nutramigen stock, security videos, and refund slips at these store locations. This review led to the discovery of additional cans of mislabeled/tampered Nutramigen as well as several return/refund receipts filled out by one individual, Lori Knop.

OCI special agents interviewed Knop, during which she refused to answer all but the most preliminary questions. Cans of the mislabeled/tampered Nutramigen were provided to the IRS, Criminal Investigation Division, National Forensic Laboratory for fingerprint analysis. By mid–August, the lab advised that latent print development of the Nutramigen labels had identified Lori Knop’s fingerprints on six of the labels and one of the infant formula cans.

Upon being reinterviewed, Knop admitted to returning the cans of mislabeled/tampered infant formula, but stated that she thought the cans were going to be destroyed and not returned to the shelf. Knop was given a polygraph examination, which disclosed that Knop believed the cans would not be placed back on the store shelves.

On June 4, 2001, Knop appeared in U.S. District Court, Eastern District of Michigan, where she was convicted of Consumer Product Tampering with Intent to Injure a Business, in violation of Title 18 U.S.C. §1365(b).

On October 2, 2001, Knop appeared in U.S. District Court, Eastern District of Michigan, where she was sentenced to 6 months of home confinement.

Animal Food Relabeled as Human Food

Criminal Fines Total $663,000 for Sale of Animal Feed Grade Products in Domestic Cheese

This case involves the sale and shipment of animal feed grade products by Wacon Corporation, Whitehall, Wisconsin (subsidiary of DMV USA, Inc., LaCrosse, Wisconsin), to human food plants in the United Kingdom, as well as the sale and use of these animal feed products by Whitehall Specialties, Whitehall, Wisconsin, in domestic cheese sales. This case originated on April 11, 1996, upon receipt of an allegation concerning the fact that, although Wacon was only licensed to manufacture and sell animal feed products, Wacon in tentionally mislabeled a product, removing the reference to animal feed. Investigation revealed that Wacon received instructions from personnel at DMV to relabel the animal feed product so it could be sold to a human food manufacturer overseas, CPC Food Ingredients. In addition, animal feed product relabeled for human food use was sold to Whitehall Specialties, at the request and with the knowledge of Whitehall owner, Steve Fawcett, and used to manufacture imitation cheese slices.

On September 5, 2001, Wacon Corporation was convicted in U.S. District Court, Madison, Wisconsin, of violating Title 21 U.S.C. § 331(a) and 333(a)(2). On November 15, 2001, Wacon Corporation was sentenced to pay a criminal fine in the amount of $163,000.00.

On October 10, 2001, Whitehall Specialties was convicted in U.S. District Court, Madison, Wisconsin, of violating Title 21 U.S.C. § 331(a) and 333(a)(2). On December 19, 2001, Whitehall Specialties was sentenced to pay a criminal fine in the amount of $500,000.00.

False and Fraudulent Transportation Entry Manifest For Decomposed Conch

Seafood Firm Attempts to Falsely Re–Export Snapper and White Fish in Place of Decomposed Conch

This investigation was initiated following a report by the FDA Miami Resident Post, that Condoritos Seafood had attempted to falsely re–export snapper and white fish in place of adulterated conch meat. On July 31, 2001, Andres Canova, owner of Condoritos Seafood, was convicted in U.S. District Court, Southern District of Florida, of violating Title 18 U.S.C. § 542, entry into the U.S. contrary to law, regarding 2,372 fifty pound cartons of decomposed frozen conch seafood, by means of a false and fraudulent Transportation Entry Manifest.

Concurrently, Canova pled guilty on behalf of his company, Condoritos Seafood, to a violation of Title 21 U.S.C. § 331(a) and 333(a)(2), regarding the introduction of adulterated seafood into interstate commerce, with intent to defraud or mislead. Canova and Condoritos Seafood were sentenced to two years probation and Condoritos Seafood was ordered to pay a $25,000.00 fine to be personally guaranteed by Canova.

On July 31, 2001, Vivian Alina Delgado was convicted in U.S. District Court, Southern District of Florida, of violating Title 18 U.S.C. § 542, entry into the U.S. contrary to law, also relating to the importation of 2,372 fifty pound cartons of frozen conch seafood, by means of a false and fraudulent Transportation Entry Manifest and of violating Title 21 U.S.C. § 331(a) and 333(a)(1), regarding the introduction of adulterated seafood into interstate commerce. Delgado was sentenced to one–year probation. As a special condition of probation, Delgado was ordered to refrain from obtaining an U.S. Customs brokerage license.

Center for Veterinary Medicine

Veal Calves Fed Unapproved New Animal Drug

Judge Admonishes Defendant for Putting Human Food Supply At Risk

The FDA/OCI, Chicago Field Office initiated an investigation into Gerald L. Herrell and his business, B & H Veal, as a result of a referral from the FDA Minneapolis District Office. Allegations included that Herrell/B & H Veal caused the feeding of the unapproved new animal drug nitrofurazone (NFZ) to Veal calves intended for human food. In addition, Herrell and B & H Veal allegedly sold Veal calves fed NFZ to a meat packing company for slaughter as human food. The sale of animals fed NFZ for human food is a violation of the Food, Drug, and Cosmetic Act (FD&CA).

Special agents of the FDA’s Office of Criminal Investigations, the U.S. Department of Agriculture, Office of Inspector General, Office of Investigations (USDA/OIG/OI), and CSOs from the FDA, Minneapolis District Office, executed federal search warrants at B & H Veal and at Herrell’s residence, where empty NFZ packets and NFZ labeling were seized.

On March 14, 2001, in U.S. District Court, Milwaukee, Wisconsin, Herrell was convicted of violating Title 21 U.S.C. § 331(a) and 333(a)(1) for his introduction into interstate commerce of an adulterated food, namely Veal calves for human consumption that had been treated with NFZ, after the January 1992 NFZ ban. The District Court Judge admonished Herrell for putting the human food supply at risk and sentenced Herrell to one year probation and ordered Herrell to pay a $3,000.00 fine.