News and Press Releases, LLC and Deluca Brothers Sentenced for Violating the FDCA

August 01, 2012

Three Defendants Fined a Total of $8.1 Million

BOISE – U.S. Attorney Wendy J. Olson announced today that, LLC,
and Jeremy DeLuca and Ryan DeLuca, both of Eagle, Idaho, received criminal fines totaling
$8.1 million for violating the Food, Drug and Cosmetic Act (FDCA). The company and the
DeLucas were charged with misdemeanor counts of introduction and delivery for introduction of
misbranded drugs into interstate commerce.

The three defendants appeared this afternoon before Chief U.S. District Judge B. Lynn
Winmill in United States District Court in Boise., LLC was fined $7 million,
the maximum possible fine. Under federal sentencing law, corporations convicted of violating
the Food, Drug and Cosmetic Act can be fined up to twice the gross gain from sales of the
misbranded product., LLC had gross gain of $3.5 million from misbranded
prohormone products, including those specifically identified in the plea agreement. In addition,
Judge Winmill ordered, LLC to serve four years’ probation and to implement
a product testing procedure recommended by both parties.

Jeremy DeLuca, 33, the former president and vice president of, LLC,
was fined $600,000; $100,000 for each of the misdemeanor counts to which he pled guilty. Ryan
DeLuca, 34, the company’s founder and CEO, was fined $500,000. Judge Winmill also ordered
both defendants to serve three years’ probation. The defendants’ fines are to be paid in monthly
installments during the period of probation.

During the plea hearing, Ryan DeLuca accepted full responsibility and assured the court
that would never again engage in such violations.

According to their plea agreements, the defendants admitted that they sold five products
misbranded as dietary supplements, when they were actually drugs. The five products – I Force
Methadrol, Nutra Costal D-Stianozol, I Force Dymethazine, Rage RV5, and Genetic Edge
Technologies (GET) SUS500 – were drugs because they contained synthetic anabolic steroids or
synthetic chemical “clones” of anabolic steroids that were not dietary supplements, and because
they were labeled and promoted as products intended to affect the structure and function of the
human body (building muscle mass).

Under the Food, Drug and Cosmetic Act, an individual in a business who has
responsibility and authority either to prevent or correct a violation of the FDCA is strictly liable
for a misdemeanor criminal violation of the Act, regardless of the extent of his knowledge of the
violations. The DeLucas admit that during the time period charged, they had authority over
products offered for sale on the company's webstore. Court documents show that during 2008
and 2009, an FDA compliance officer at informed the DeLucas that some of, LLC’s products contained ingredients that did not qualify as dietary
ingredients. Court records show that in the first seven and one-half months of 2009, had gross revenue of almost $1.8 million from the sale of products similar to
the five products the DeLucas and admitted were improperly sold as dietary

According to the FDCA, “dietary supplements” must contain one or more “dietary
ingredients.” A “dietary ingredient” is a vitamin; a mineral; an herb or other botanical; an amino
acid; a dietary substance for use by man to supplement the diet by increasing total dietary intake;
or a concentrate, metabolite, constituent, extract, or combination of one or more of these dietary
ingredients., LLC, is the largest internet retailer of supplements in the world. It
does not manufacture dietary supplements, but only retails products made by others.

Olson said that today’s sentencings are the end result of a detailed and thorough
investigation that included the execution of search warrants in September 2009 at, LLC's Boise warehouse and Meridian headquarters.

“The $8.1 million fines imposed in this case send a clear message that retailers, as well as
manufacturers, of products sold as dietary supplements have a clear responsibility under the law
to ensure that the products they are selling are indeed dietary supplements, and not synthetic
steroids or steroid clones masquerading as dietary supplements,” said Olson. “The officers of
those retailers also now know that they will be held responsible and have an obligation to know
what the products they sell contain.”

“Today's sentencing should serve as a reminder and deterrent to those involved in the
distribution of products promoted as ‘dietary supplements’ that the FDA-Office of Criminal
Investigations will continue working with U.S. Attorneys' Offices to protect consumers,
vigorously pursuing and holding accountable those who sell unsafe and illegal products to the
unsuspecting public,” said Lisa Malinowski, Acting Special Agent in Charge, FDA-Office of
Criminal Investigations, Los Angeles Field Office.

The Food and Drug Administration, Office of Criminal Investigations investigated the
case. Assistant United States Attorney Kevin Maloney and Special Assistant United States
Attorney Jim Smith, Associate Chief Counsel of the Food and Drug Administration, prosecuted
the case.