Chinese Citizen Sentenced in Scheme to Sell Mislabeled Dietary Supplements
Xu Jia Bao (aka Fred Xu), of Shanghai, China, was sentenced in Dallas yesterday to 18 months’ imprisonment and one year of supervised release in connection with a scheme to sell mislabeled dietary supplements, the Department of Justice announced today.
Xu, 48, is the principal of Shanghai Waseta International Trade Co. Ltd., a Chinese firm that sells raw ingredients for use in dietary supplements. Xu pleaded guilty in August 2018 in the Northern District of Texas to one count of wire fraud. Waseta, the company, also pleaded guilty to wire fraud in September 2018. The company was sentenced in February 2019 to one year of probation and ordered to pay a $500,000 fine.
In pleading guilty, Xu admitted that he agreed with others working at Waseta to sell synthetic stimulant ingredients, including the substance known as DMHA, to a purported dietary supplement manufacturer in the United States. Xu admitted that the purported dietary supplement manufacturer, actually a confidential government informant, told him that Waseta ingredients would not be accurately listed on the labels of the finished dietary supplement. Xu admitted that he knew major American retailers would refuse to carry supplements known to contain certain stimulants, such as DMHA. Xu also admitted that he and Waseta caused a falsely labeled shipment of DMHA to be sent to Texas.
“Consumers are entitled to trust that dietary supplements products accurately identify their ingredients,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “We will vigorously pursue and prosecute those who attempt to circumvent the law by falsely identifying the substances they import into the United States.”
Xu and Waseta both were sentenced by U.S. District Court Judge Sam A. Lindsay of the Northern District of Texas. Xu was arrested in September 2017 while attending a dietary supplement trade show in Las Vegas. Another defendant named in the case, Li Ting Ting (a.k.a. Sunny Lee), the overseas sales manager for Shanghai Waseta, is not believed to be in the United States.
“Consumers deserve to know what’s in the supplements they ingest,” said U.S. Attorney Erin Nealy Cox. “The Northern District of Texas will not stand by as companies mislead consumers.”
“Dietary supplements that contain undeclared synthetic stimulant ingredients pose a risk to the health of U.S. consumers,” said Charles L. Grinstead, Special Agent in Charge, FDA Office of Criminal Investigations’ Kansas City Field Office. “We will continue to investigate and bring to justice those who jeopardize the public health by importing and selling misbranded supplements.”
The case was investigated by FDA’s Office of Criminal Investigations. The case was prosecuted by David Sullivan and Patrick R. Runkle, Trial Attorneys in the Department of Justice’s Consumer Protection Branch, and Kate Rumsey and Douglas Brasher, Assistant United States Attorneys for the Northern District of Texas.
Additional information about the Consumer Protection Branch and 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.