The dietary supplements sold by Mai Lor's businesses were marketed with illegal claims that the supplements could prevent, treat or cure a number of diseases. But none of the dietary supplements sold by Lor are generally recognized, among experts qualified by scientific training and experience to evaluate the safety and effectiveness of drugs, as safe and effective for use under any of the conditions recommended in their labeling.
Earlier this week, Beth Phillips, United States Attorney for the Western District of Missouri, announced that Lor, 25, has pleaded guilty in federal court to her role in a conspiracy to fraudulently market dietary supplements over the Internet with illegal claims. Several Websites were used to sell nearly $12 million worth of the products in 2005 and 2006.
Lor was co-owner, along with her husband, of Medycinex, located in Springfield, which purchased dietary supplements and sold them over the Internet. According to the U.S. Department of Justice (DOJ), Lor, at her husband's direction, also formed Bio Nutrasource, LLC, also located in Springfield, to carry on the business previously conducted by Medycinex.
Lor contracted with co-defendant Tony T. Pham, 41, of Grand Rapids, MI, to market and distribute the dietary supplements. Co-conspirators claimed that six products sold over the Internet had been proven reliable through clinical testing for the treatment and prevention of diabetes, irritable bowel syndrome, gout, high cholesterol, high blood pressure, heartburn and diarrhea. These claims would classify each of these packaged products as a drug.
The DOJ says no clinical testing had been performed, none of the products were approved by the FDA, and none of the package labels had adequate directions for use. This, says the Justice Department, make the dietary supplements unapproved drugs and misbranded drugs. The dietary supplements that were marketed as unapproved new drugs and misbranded drugs included Diabeticine (later renamed Diamaxol, and also known as Glucolex), Digestrol (also known as Digesticine), Uricinex (also known as Uricaid), Cholestasys Rx (later renamed Cholestasys), Hyperexol and Prolipamy.
Pham pleaded guilty on July 2, 2009, to charges contained in the April 2, 2009, superseding indictment. Pham owned and operated Techmedica Health Inc. located in Grand Rapids. Pham admitted that he used Techmedica to repackage, sell, market, and distribute unapproved new drugs and misbranded drugs over the Internet.
Pham admitted that since April 6, 2004, he participated in a conspiracy to buy and sell unapproved new drugs and misbranded drugs and to defraud the United States by impeding the lawful functions of the FDA to prevent the introduction of unapproved new drugs and misbranded drugs in interstate commerce, to regulate the interstate sale and distribution of drugs in the United States, and to safeguard the health and safety of consumers who purchase drugs. Pham sold $11,954,648 worth of those products in 2005 and 2006, using several different Web sites.
By pleading guilty, Lor agreed to forfeit to the government any property derived from the proceeds of the offenses, including $11,954,648 (for which she and her co-defendants are jointly and severally liable), three real estate properties in Springfield, properties in Rogersville, MO, and Pleasant Hope, MO, three vehicles and various bank accounts.
Under federal statutes, Lor is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 or twice the gross gain.