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David Romeo, 46, also pleaded guilty to a separate scheme to defraud purchasers of dietary supplements -- to the tune of $7 million altogether -- and money laundering.
“This case underlines the need for both consumers and the government to be vigilant in investigating what the American public is ingesting in the guise of weight loss or health enhancement supplements,” said Principal U.S. Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
As part of his plea deal with the government, Romeo agreed to forfeit more than $1.2 million in ill-gotten gains.
Romeo admitted that he was a principal of Global Nutrients, Stella Labs and Nutraceuticals, "all of which were New Jersey-based entities engaged in the sale of dietary ingredients intended for use in dietary supplements sold to consumers," Mizer said in a news release Tuesday afternoon.
"Starting at least as early as 2003, Romeo directed his employees to use cheaper substitutes in place of the dietary ingredients that had actually been ordered by customers, most of whom were companies engaged in production of dietary supplements," the release says. "These substitutes were sent in many instances without the customer’s consent or knowledge."
Romeo and his associates referred to the substitution of cheaper ingredients as “standard operating procedure," Mizer said.
As part of the scheme, the businesses purported to sell a weight-loss ingredient called “hoodia” that they said came from a rare South African plant, Hoodia gordonii.
It was actually manufactured in China.
“Manufacturing and selling misbranded dietary supplements puts American consumers at risk,” FDA Office of Criminal Investigations Director George M. Karavetsos said.
Romeo and his companies were the subject of a prior action by the Federal Trade Commission (FTC) seeking a court order to prevent the sale of bogus dietary ingredients. The case was resolved by a court order barring Romeo from making weight loss claims about supplements he sold.
Sentencing was set for May 18.
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