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Office of Criminal Investigations 2003

In Fiscal Year 2003, the efforts of FDA’s Office of Criminal Investigations (OCI) resulted in 345 arrests and 206 convictions for violations of the Federal Food, Drug, and Cosmetic Act and related statutes. Additionally, these criminal investigations resulted in $815,673,205.00 in fines and restitution.

Center for Food Safety and Applied Nutrition

High Calorie Bakery Items Labeled as Low Calorie

Donut with 33 Grams of Fat Labeled as Containing 3 Grams of Fat

The FDA’s Office of Criminal Investigation (OCI) received information in July 1997 from Protex Corporation in Crestwood, Illinois. Protex Corporation advised OCI that Nutritional Source, Inc., of Paducah, Kentucky, which is owned and operated by Robert Ligon, was mislabeling rolls, donuts and cookies. Nutritional Source was doing business as First Health Products in Crestwood, Illinois. Ligon purchased high caloric rolls, donuts, and cookies at wholesale prices and then labeled them as low caloric rolls, donuts, and cookies. He then sold the products to the health food industry at an inflated price taking advantage of the current trend for nutritional foods. These rolls and donuts had a caloric value of 400 to 520 calories per roll/donut and a fat content of 33 grams of fat per roll/donut. Ligon labeled them as 110 to 135 calories per roll/donut and a fat content of 3 to 5 grams of fat per roll/donut. Ligon’s company purchased rolls and donuts from Cloverhill Bakery in Chicago, Illinois. The rolls and donuts would be shipped to a warehouse in Crestwood, Illinois, where they would be labeled as low calorie and low fat, then shipped to consumers throughout the United States. The cookies were purchased from Harvest Valley Bakery in Spring Valley, Illinois. These cookies were shipped to the same warehouse where they were labeled as low calorie and low fat cookies, then shipped to consumers throughout the U.S. The billings and sale orders would come from Paducah, Kentucky, where Ligon operated the business.

Ligon would market his product to the health food industry by sending samples of his products with accompanying literature. There would be an 800 number with the literature for purchasing the products. This number went to Park City, Utah, where Ligon‘s daughter took the order. Once the customer called the 800 number, the information would be faxed to Paducah, Kentucky, where it would be processed and a shipping order would be forwarded to Crestwood, Illinois. In Crestwood, Illinois the order would be filled and shipped to the customer with a billing statement. The money would eventually make its way to Ligon in Paducah, Kentucky.

After interviewing several potential witnesses and reviewing records, three search warrants were served simultaneously on August 27, 1997. A fourth search warrant was served two days later. During these searches, OCI seized numerous documents and other related evidence against Ligon.

On May 8, 2002, a Grand Jury for the Northern District of Illinois, Chicago, Illinois, returned a “True Bill” charging Ligon in a six count indictment with violations of Title 18 U.S.C. § 1341- Mail Fraud; and Title 18 U.S.C. § 2- Aiding and Abetting.

On January 29, 2003, Ligon appeared before Judge James Moran, and was convicted of 1 count of Title 18 U.S.C. § 1341- Mail Fraud; and Title 18 U.S.C. § 2- Aiding and Abetting.

On September 23, 2003, Ligon was sentenced to 15 months incarceration, and 36 months supervised release after incarceration. In addition, Ligon is not allowed to purchase, distribute, or sell any food product regulated by any government agency.

Bakery Selling Penicillin and Other Rx Drugs

OCI, Oklahoma Inspector General, Drug Enforcement Administration Results in Conviction

Information was developed by the Oklahoma Department of Human Services, Office of Inspector General that Mercadito Chihuahua, a store/bakery located in Oklahoma City, Oklahoma, was selling penicillin. The products were reported to have come into the United States from Mexico. The owners/operators of the Mercadito Chihuahua were Armida and Adolfo Gomez. Three undercover buys of Bristol Myers Squibb penicillin were made from the store/bakery. Each buy consisted of a five capsule blister pack.

On September 24, 2002, the FDA’s OCI, the Drug Enforcement Administration and the Oklahoma City Police Department executed a federal search warrant at the store/bakery. Pursuant to the execution of the search warrant, 125 penicillin capsules were recovered along with about 1500 other medications.

On June 13, 2003, Armida Gomez was convicted of violating Title 21 U.S.C. § 331 (a) - Introduction into Interstate Commerce of a Misbranded Drug; and Title 18 U.S.C. § 2 - Aiding and Abetting.

On July 18 2003, Adolfo Gomez was convicted of violating Title 21 U.S.C. § 331 (a) - Introduction into Interstate Commerce of a Misbrand Drug; and Title 18 U.S.C. § 2 - Aiding and Abetting.

On September 6, 2003, Armida and Adolfo Gomez were sentenced to 1 year probation and a fine of $1,000.00 and $3,000.00 respectively.

Soybean Oil Substituted for Cream in Cheese

FDA Forensic Chemists Develop Test to Identify Oil in Cheese

OCI’s Chicago Field Office initiated this case in 1996. Old Fashioned Foods (OFF) was manufacturing cold-pack cheese food and substituting soybean oil for cream. Soybean oil costs approximately half the price of cream or butter. Neither the addition of the soybean oil, nor the deletion of a portion of the cream was listed on the ingredient statements of the cold-pack cheese food products. In addition, OCI also determined that a systematic short weighting of various cheese products produced at OFF was occurring under the direction of Gary Youso, owner of OFF.

OCI and the FDA’s Minneapolis District Office conducted a series of retail purchases of cold-pack cheese food. The cold-pack cheese food was submitted to the FDA Midwest Laboratory for Microbiological Investigations, to determine if soybean oil could be detected in the cold-pack cheese food. FDA chemists advised that while there were tests to determine the percentage of fat in a product, there were no methodologies to determine the specific identity of the fat in the cold-pack cheese food. In this case, the chemists were asked to distinguish the differences in animal fat, such as butter or cream, typically used in the production of cold-pack cheese food, from fat derived from a vegetable source. If this could be established, then the allegations of misbranding and adulteration of the cold-pack cheese food could be independently established.

FDA chemists were able to develop a methodology to determine if a quantity of “B-Sitosterol” was present in a sample. B-Sitosterol is a chemical marker, unique to vegetable fat, which if present in a sample, would indicate that vegetable oil was an ingredient in the sample. Therefore, if any sample contained B-Sitosterol then vegetable oil was an ingredient within the sample. This would render the cold-pack cheese food misbranded and adulterated. Sixteen samples of cold-pack cheese food, produced by OFF, were determined by the Midwest Laboratory for Microbiological Investigations to contain B-Sitosterol.

On May 30, 1996, a search warrant was served on the business of OFF. Employee interviews and production records obtained during the search confirmed the allegations of adulterated and misbranded products. An analysis of OFF production records from 1993 through May 21, 1996, determined that OFF produced 16,971 batches of cold-pack cheese food, of which 5,237 batches (30.86%) were adulterated with soybean oil. This produced a net savings to OFF of approximately $53,315. An analysis of OFF production records from 1992 through 1996, determined that OFF produced 21,776 batches of cold-pack cheese food, of which 16,663 (76.52%) contained less than the required amount of 51% cheese. This produced a net savings to OFF of approximately $158,657.

On November 27, 2002, Youso and Old Fashioned Foods, Inc. were convicted of violations of 21 U.S.C. § 331(a) and 333(a)(1) - Causing Adulterated Food to be Introduced and Delivered for Introduction into Interstate Commerce; 21 U.S.C. §§ 331(a), 331(k), 333(a)(2) and 18 U.S.C. § 2 - Scheme to Defraud the Food and Drug Administration by Causing Adulterated Food to be Introduced and Delivered for Introduction into Interstate Commerce, and Causing Misbranded Food to be Introduced and Delivered into Interstate Commerce with the Intent to Defraud and Mislead.

Youso was ordered to pay a fine of $175,000 for the felony violations. This concluded an investigation of close cooperation between the OCI’s Chicago Field Office and the FDA’s Minneapolis District Office.

Food Storage Warehouse Contaminated With Rodent Infestation

Firm Owner Sentenced for Obstruction of Justice

In June 2002, the FDA’s Baltimore District Office referred this case to OCI. The Jeppi Nut Company, located in Baltimore, Maryland, distributes nuts, bulk candies, popcorn and other food supplies. The company also roasts nuts and packages various food products. During a routine inspection of the company in April 2002, FDA inspectors uncovered evidence of unsanitary conditions and extensive rodent infestation. Sometime prior to that inspection, the company had expanded its operations to include a second building located nearby.

The firm’s owner, Theodore Pavlos, did not post any signs or otherwise indicate that his company was operating from the second building. He also denied having any operations in that building when asked by the FDA inspectors.

Following the FDA inspection, information was received that food products were being manufactured and warehoused in the second building. Based on this information, FDA personnel returned to the company on May 12, 2002, at which time Pavlos again denied he had any operations at that location. Surveillance conducted that evening revealed Jeppi Nut employees moving items out of the second building and moving them to a nearby garage. A subsequent inspection of the garage determined that those food products were contaminated by rodents and insects.

On October 8, 2003, Pavlos was convicted of 1 felony count of violating Title 18 U.S.C. § 1505 - Obstruction of Justice.

On November 20, 2003, Pavlos was sentenced to 18 months probation and 6 months monitored home detention.

Lobster Contaminated with Salmonella Released for Sale

On April 4, 2002, OCI’s Miami Field Office was notified that Alpha Brokers Corporation, a customs broker, had assisted Carlos Seafood, Inc., (Carlos Seafood) in falsifying dump tickets for lobster meat and tails that were refused entry by FDA due to Salmonella contamination. The lobster meat and tails were then released by Carlos Seafood for sale and distribution.

On November 20, 2002, Carlos Seafood, one of South Florida’s largest seafood importers, was convicted of violations of 21 U.S.C. §§ 331(a) and 333(a)(2)- Introduction into Interstate Commerce of an Adulterated Food with the Intent to Defraud; 16 U.S.C. § 3372(d)(1) and 3373(d)(3)(A) and 18 U.S.C. § 542 – Importation of a Food into the Commerce of the United States using False Documents. In addition, Lillian Berdeal, Vice President of Carlos Seafood, was convicted of violating 18 U.S.C. § 4 – Misprison of a Felony. On January 29, 2003, Carlos Seafood was sentenced by Judge Moreno, Southern District of Florida, to 5 year’s probation and was fined $350,000.00. Berdeal was sentenced to 3 years probation and was fined $5,000.00.

Defendant Confesses to Placing Razor Blade in Apple Pie

Tampering Results in 63 Month Prison Sentence

OCI’s New Orleans Resident Office initiated this case pursuant to a referral from the Federal Bureau of Investigation (FBI) in Lafayette, Louisiana. The FBI reported an alleged tampering incident that occurred on November 24, 2002, at a McDonald’s restaurant located in Eunice, Louisiana.

On December 3, 2002, Adam Fontenot confessed that he placed a razor blade in an apple pie while working at the McDonald’s Restaurant. Fontenot was subsequently arrested and charged with 2 counts of violating Title 18 U.S.C. § 1365 - Tampering with Consumer Products.

On March 13, 2003, Fontenot was convicted of violating Title 18 U.S.C. § 1365 - Tampering with Consumer Products.

On October 29, 2003, Fontenot was sentenced to 63 months incarceration and an additional 36 months of supervised release.