The Federal Trade Commission was able to purchase a Norcross company’s dietary supplements more than two months after a judge ruled that the products had to be recalled, according to testimony Thursday in federal court.
Three FTC investigators testified about their purchases of weight-loss products manufactured and distributed by Hi-Tech Pharmaceuticals Inc. on the second day of a hearing in which the agency is seeking to have company president Jared Wheat and an associate jailed.
One of the investigators described how he bought a package of the Hi-Tech supplement Fastin with prohibited product claims at a GNC in Washington, D.C. on Monday.
The FTC wants U.S. District Judge Charles A. Pannell Jr. to impose coercive incarceration on Wheat and Hi-Tech vice president Stephen Smith for failing to comply with the recall, which was ordered by the judge in May.
Pannell ordered the recall along with a $40 million judgment as sanctions against Wheat and Hi-Tech for being in contempt of a 2008 ruling enjoining them from making unsubstantiated product claims.
Hi-Tech has argued that it complied with the recall by mailing more than 2,400 recall letters to customers on July 3, shortly after Pannell ruled on a wording question from the company, and following up with phone calls and emails.
The FTC asserts that the recall letter did not clearly spell out the issue, that not all customers were contacted and that record-keeping and record retention have been insufficient.
The hearing is due to continue today with what’s likely to be the last day of testimony. Pannell could rule from the bench or issue a written opinion at a later date.
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