New Jersey-based dietary supplement companies Quality Formulation Laboratories Inc. (QFL) and American Sports Nutrition Inc. (ASN), manufactured and distributed food products and supplements under the "ASN" brand and private labels. Among their product line were protein powder mixes sold in health food stores, as well as other powder mixes and dietary supplements. During a December 2008/January 2009 Food and Drug Administration (FDA) inspection of the companies' manufacturing and distribution facilities in Paterson, NJ, FDA investigators observed:
Subsequent to the FDA inspection, a civil Complaint was filed the United States Department of Justice alleging that defendants QFL, ASN, and Mohamed S. Desoky (the owner of QFL and ASN), had adulterated food by manufacturing it contrary to FDA regulations, causing adulteration through preparation in unsanitary conditions, and permitting cross-contamination with a major food allergen. The Complaint alleged that the defendants caused misbranding of food because the products contained milk - a major food allergen - which was not declared on product labels.
The Decree seems fairly straightforward. You're shut down. Closed. Outta biz. And don't reopen without cleaning the mess up. Oh, and another thing, don't even think about reopening without the FDA's prior approval.
Ah but for some, the mere intimation that you can't do something is viewed as a challenge. If the front door is closed, hey, maybe we can pry open the back door or climb in through the rear window. Gotta love that entrepreneurial spirit - however, you also gotta realize that a sitting federal judge ain't gonna be amused, not by a long shot.
As a result of the defendant's alleged non-compliance with the Decree, a Petition for Criminal Contempt charged the three defendants in the civil matter QFL, ASN, Mohamed S. Desoky, and also two of the companies' managers: Ahmad Desoky Esq., and Omar Desoky. Ahmad and Omar Desoky are the sons of Mohamed Desoky. Although Ahmad and Omar Desoky were not named as defendants in the civil case, they were named in the criminal contempt matter based upon allegations that in knowing violation of the Decree, they assisted their father in violating the court's orders
Federal prosecutors alleged that the defendants almost immediately upon the entry of the civil Decree, violated its terms by setting up operations at a new location in New York (without the requisite prior notice to the FDA) to which they transported their employees and equipment. Moreover, the petition alleged that despite the Decree‘s ban, QFL, and the three Desokys continued receiving and manufacturing operations at the Paterson, NJ facility. Similarly, the Petition alleged that QFL, Mohamed S. Desoky, and Ahmad Desoky had violated the Decree when they received and distributed product at the Paterson facility from September 2010 through January 2011.
On June 1, 2011, a federal jury in Trenton, NJ found QFL, ASN, and the three Desokys guilty of multiple counts of criminal contempt for violating the Decree.
On November 30, 2011, following the jury's guilty verdicts, the Court ordered QFL and ASN to pay criminal fines totaling $1 million, and placed the companies on probation for a period of three years.
All five defendants were prohibited from doing business in the dietary supplement industry during their periods of supervised release or probation unless they first obtained consent of the FDA and the Court.
Additionally, the Court imposed the following sentences: