Skip to main content
Press Release

Federal Grand Jury Returns 38-Count Indictment In Connection With Alleged Investment Scheme Involving Sports Drink

For Immediate Release
U.S. Attorney's Office, District of Utah
Defendant Solicited More Than $7 Million From 50 Victims Or More


            SALT LAKE CITY - A federal grand jury returned a 38-count indictment Wednesday afternoon charging Randy Olshen, age 51, of Newport Beach, Calif., with mail fraud, wire fraud, and money laundering in connection with a scheme involving sports hydration drinks. At times relevant to the indictment, Olshen maintained a residence in Summit County, Utah.

            The indictment alleges Olshen solicited and received more than $7 million from 50 or more victims as a part of his scheme.

            According to the indictment, Olshen was one of the founders and president of an entity known as Innovative Health Solutions, LLC (IHS), organized in 2008. IHS specialized in manufacturing and selling sports hydration drinks designed to boost energy and stamina. One of the products marketed by the company was H2O Overdrive. The indictment alleges that Olshen, in an effort to promote the growth of IHS, sought investors and made representations to encourage investments in the company.

            The indictment alleges that beginning around 2009 and continuing until about February 2013, Olshen devised a scheme to defraud IHS investors and divert portions of the invested funds for purposes not disclosed to investors in a manner inconsistent with his representations and promises. According to the indictment, Olshen misrepresented annual sales figures for the company. For example, according to the indictment, he represented that IHS had approximately $1.1 million in sales in 2009, when in fact, it had approximately $98,275 in sales in 2009. He represented that IHS had more than $28 million in sales in 2012, when in fact, it had approximately $579,239 in sales in 2012. He also represented that the company had large receivable accounts with various national chains such as Costco, Rite Aid, CVS, and Food Lion. In fact, no such large receivable accounts were owed to IHS.

            According to the indictment, Olshen concealed material facts, including that he created two sets of IHS accounting records, one that accurately represented company finances and one that was provided to investors and potential investors; fabricated paperwork, such as sales records, to support his misrepresentations regarding the growth of IHS; failed to make numerous payments to creditors; paid a portion of investor funds to others as commissions for obtaining investments for IHS; that he personally declared Chapter 7 bankruptcy around October 18, 2011; and that he used IHS funds for his own personal benefit and expenses in excess of his reported salary.

            The indictment alleges 12 counts of mail fraud, nine counts of wire fraud and 17 counts of money laundering. The potential maximum penalty for each count of mail fraud and wire fraud is 20 years with fines of $250,000. Counts 22 through 34 of money laundering have potential 20 year penalties and $500,000 penalties. Counts 35-38 of money laundering have potential 10 year sentences and fines of $250,000. A summons has been issued to the defendant to make an initial appearance on the charges Oct. 22, 2014, at 11:15 a.m. before U.S. Magistrate Judge Paul M. Warner.

            Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

            The case is being investigated by special agents of the FBI, IRS Criminal Investigation, and the Utah Division of Securities. It is being prosecuted by the U.S. Attorney’s Office in Salt Lake City.

Updated March 12, 2015