Ryan DeLuca put $20,000 down to buy a web domain called Bodybuilding.com in 1999. He soon found himself straddling a rocket.
In a year, his company reached $1 million in sales. A year later, $5 million. DeLuca’s site combining a store selling dietary supplements, an information center on fitness, and a place bodybuilding buffs could chat propelled Bodybuilding.com to prominence. By 2006, it was the world’s largest fitness website.
“It’s so cool to be able to start something like this,” DeLuca said in 2001, when he was just 23.
On Monday, the 34-year-old Eagle resident pleaded guilty in federal court in Boise to five misdemeanor counts of introduction and delivery for introduction of misbranded drugs into interstate commerce, said U.S. Attorney Wendy J. Olson. He agreed to pay a $500,000 fine.
Prosecutors said they would not seek prison time. DeLuca’s lawyer said he will stay on as CEO of the company, most of which he sold in 2008.
The plea agreement says that while DeLuca was CEO between 2007 and 2009, the Meridian company sold five products as dietary supplements that the Food and Drug Administration classified as drugs. The supplements contained synthetic anabolic steroids or synthetic chemical clones of anabolic steroids, according to the plea agreement.
Users, mostly young men, take anabolic steroids or steroid-like substances to build muscle mass. The steroids simulate testosterone.
The FDA has issued a public health advisory, warning consumers to stop using products that contain these substances. The agency said in 2009 that it had received reports that men between 22 and 55 who had used such products have suffered serious liver injury, stroke, kidney failure and pulmonary embolism.
DeLuca acknowledged responsibility Tuesday in a statement through his attorney, John Lundquist of Minneapolis.
“Mr. DeLuca is strictly liable for misdemeanor violations of the FDA law,” Lundquist said. “He wants to put this matter behind himself and continue to move the company forward.”
The company has enjoyed excellent growth in the two years since it removed the products that concerned the FDA, Lundquist said.
He said the FDA concluded that labels on a handful of products did not comply with federal law, and those products were manufactured and labeled by other companies. His statement did not mention steroids.
DeLuca’s problems with the FDA began in 2002, when his company received the first of five warning letters over five years raising questions about product claims and the safety of some items it sold. The company substantially complied with the FDA’s requirements by rewording language on its website or stopping the sale of certain products, an FDA investigator said later.
But by 2007, the FDA was so concerned about the company’s practices that it started a criminal investigation. Between February 2008 and August 2009, an FDA special agent made four purchases from the company, according to a 2009 affidavit.
The investigator said that 23 of the 31 products he bought contained one or more of five anabolic steroids. He said he believed that the products were falsely and misleadingly labeled as dietary supplements.
The five products were I Force Methadrol, Nutra Costal D-Stianozol, I Force Dymethazine, Rage RV5, and Genetic Edge Technologies (GET) SUS500.
As the investigation advanced, Liberty Media, the Colorado-based owner of the QVC home-shopping cable network, bought an 83 percent stake in Bodybuilding.com for more than $100 million in January 2008.
In September 2009, authorities raided Bodybuilding.com’s headquarters in the SilverStone Corporate Center and its Boise warehouse, seizing cans, bottles, merchandise and business records.
The plea agreement says that in the first seven months of 2009, Bodybuilding.com had gross revenue of almost $1.8 million from the sale of products similar to those DeLuca admitted were improperly sold as dietary supplements.
As the investigation dragged on, DeLuca continued to lead the business. “Every day someone calls and says, ‘Your company has changed my life,’ ” he told Fusion, a magazine published by his brother, Jeremy, in 2011. “And that, to me, is everything.”
Each count against DeLuca was punishable by up to a year in prison, up to a year of supervised release, up to five years of probation, and a maximum fine of $100,000, Olson said in a news release. He will be sentenced on June 20.
Meanwhile, the government’s investigation continues.
In a statement from Bodybuilding.com, the company said DeLuca’s plea agreement was a “personal decision” and would not change the company’s position to defend itself from any unwarranted charges in the ongoing investigation.
Bodybuilding.com said it conducted a “prompt, voluntary recall of all supplements in question and bolstered our compliance programs within the company and with our suppliers to ensure the highest integrity of the products we offer our customers.”
The scope of the investigation is not clear. The FDA would not comment Tuesday, and neither would Liberty Interactive, the successor to Liberty Media.
DeLuca didn’t comment beyond his statement, and Olson did not return phone calls.
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