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[Definitie:] "An ergogenic aid is any substance or phenomenon that enhances performance."
(Wilmore and Costill) 
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2 0 - 0 7 - 2 0 0 5 Metabolife Files for Chapter 11 Protection
The weight-loss firm cites lawsuits filed by users of its products containing ephedra
By Claire Hoffman San Diego-based Metabolife International Inc., once a leading seller of herbal weight-control products, filed for bankruptcy protection Friday, citing the burden of hundreds of lawsuits filed by users of its products containing ephedra, a now-banned dietary supplement.
Ephedra is an amphetamine-like herbal stimulant linked to dozens of heart attacks and 155 deaths — including the 2003 death of Steve Bechler, a pitching prospect for the Baltimore Orioles. Ephedra was the primary ingredient in the company's formerly bestselling product, Metabolife 356. The company stopped producing ephedra-based products in December 2003. David Osias, the company's bankruptcy lawyer, estimated that Metabolife spent about $20 million in legal fees in the last five years as the company has faced 358 lawsuits, including several wrongful death suits. The lawsuits will be included in the bankruptcy proceeding. The Food and Drug Administration issued a ban on ephedra in April 2004. But this last April, a federal judge in Utah overruled the ban, saying that the FDA wrongly regulated ephedra as a drug instead of as a food. Osias said the uncertainty had been challenging. "After many years and lots of money, they are still in a position where they have this large number of cases left, they still have to defend them, and it's not clear how they are coming out," Osias said of Metabolife. "It's not a very good place to be." In its Chapter 11 bankruptcy filing, the privately held company said it was under investigation for understating its income in 1997 and 1998 and said the Internal Revenue Service was seeking nearly $1 million in penalties and back taxes. The company said Grand Rapids, Mich.-based Idea Sphere Inc., which owns several vitamin companies, has offered to buy Metabolife's assets for $23.5 million. Any sale would be subject to U.S. Bankruptcy Court approval. Osias said it was likely that most proceeds from a sale would be consumed by legal claims and fees. Since 2003, the company has continued to produce ephedra-free herbal weight-control and energy-boosting products. According to the bankruptcy filing, the company reported an $11-million loss in revenue of less than $47 million last year. In 1999, at the height of its success, the company took in more than $350 million in revenue and reported more than $24 million in profit. The bankruptcy petition lists more than 650 creditors, with the 20 largest owed more than $6.4 million. Michael J. Ellis, the founder and one of three major shareholders of Metabolife, faces federal criminal charges for allegedly lying to the FDA about the safety of Metabolife 356, with prosecutors accusing him of ignoring numerous customer complaints of illness and deaths caused by the product. From 1999 to 2001, Ellis and two other company owners were paid a total of $146 million, Metabolife's vice president of finance testified in a deposition. Ellis founded the company in 1995, less than a decade after prosecutors accused him of manufacturing methamphetamine, a drug that also contains ephedrine. He pleaded guilty to a lesser charge, after working as a federal informant. In February Ellis was indicted for illegal possession of weapons, after federal agents discovered handguns, a rifle and ammunition at his ranch home in Julian, Calif. 0 7 - 0 8 - 2 0 0 5 Metabolife will plead guilty, end tax probe
By David Washburn Metabolife International has ended a three-year criminal tax evasion investigation by agreeing to plead guilty to hiding $1.07 million in revenue during the late 1990s, according to a plea agreement filed yesterday in U.S. Bankruptcy Court. The San Diego company, which was once the nation's leading seller of herbal weight-loss products, will plead guilty to two counts of tax evasion for the tax years 1997 and 1998, according to the agreement. Each count carries a maximum $500,000 fine. "We are interested in wrapping things up and not fighting things that we shouldn't be fighting," said David Osias, Metabolife's bankruptcy attorney. Also in the filing is a letter from a federal prosecutor to Metabolife criminal lawyers that indicates that William R. Bradley, one of the company's three owners, will soon plead guilty to tax evasion. However, no plea agreement on Bradley's behalf has been filed. Assistant U.S. Attorney Phillip Halpern said he would not comment until the plea is filed in court. Also declining to comment were lawyers from Los Angeles-based Akin Gump Strauss Hauer & Feld, which represents the company in its criminal cases. U.S. Bankruptcy Judge John Hargrove will make a ruling on the plea agreement on Sept. 7. The pleas will probably not be entered in criminal court until after that hearing. Federal investigators originally alleged that Metabolife and its owners may have diverted as much as $93 million into "off-the-books" accounts in the late 1990s, according to Osias' motion. But now almost all of it can be accounted for, according to the motion. The tax fraud investigation has been just one in a list of problems facing the diet supplement company. Metabolife's fortunes started to decline in 2002 when concerns grew about the health risks of the herbal stimulant ephedra, a key ingredient in Metabolife 356, which at the time was the company's biggest seller. Then, in July of that year, Internal Revenue Service agents raided Metabolife headquarters. In April 2004, the federal government banned all products that contained ephedra. Two months later, Metabolife was ordered to pay $7.4 million to a Texas woman who suffered a stroke after taking Metabolife 356.
Then, in August of last year, Michael Ellis, another company founder, was indicted on eight charges of making false statements to the Food and Drug Administration and trying to obstruct efforts by regulators to determine whether the herbal stimulant needed to be more strictly regulated.
Finally, with the criminal charges and lawsuits hanging over it, Metabolife filed for bankruptcy on June 30. Court documents related to the IRS investigation alleged that the three owners skimmed Metabolife money and falsified financial records. A former chief financial officer for Metabolife also told investigators that the owners believed they could make the money "untraceable" by using a web of limited liability corporations, according to court documents. The plea agreement filed yesterday states that between Aug. 12, 1997 and Feb. 12, 1998, Bradley deposited $231,641 in an "off-the-books" account at Grossmont Bank. Bradley also deposited $335,066 of Metabolife revenue into a Bank of America account, but classified it as "shareholder loan repayments," rather than revenue, according to the plea agreement. Additionally, Bradely hid $500,000 in revenue by recording it as "sales returns and allowances," the agreement said. By hiding this revenue, Metabolife evaded the payment of $339,221 in income taxes. Christopher Barclay, who was appointed to run the company while it is in bankruptcy, said in a declaration filed yesterday that most of the additional money investigators were suspicious about can be explained by transfers between accounts and sales-tax money, which is not counted as revenue. "That is the problem with repeating allegations as facts," said Victor Vilaplana, who is representing Bradley in the bankruptcy case. 3 1 - 1 2 - 2 0 0 5 Metabolife fined $600,000 for tax evasion
Saturday, December 17, 2005 Metabolife International must pay a $600,000 fine for filing false income tax statements in 1997 and 1998, a federal judge ruled Friday. "Metabolife tried to cheat on its taxes, pure and simple," U.S. Attorney Carol Lam said. Calls to Metabolife offices in San Diego and Hauppauge, N.Y., Friday evening were not immediately returned. The now-bankrupt company pleaded guilty on Oct. 5 to two counts of filing false returns. The company and one of its owners, William Bradley, admitted depositing funds in unrecorded domestic accounts. Bradley, who admitted using a charity, shell companies and at least one foreign business to avoid paying taxes, is scheduled to be sentenced in April. Metabolife and co-founder Michael Ellis are still fighting federal charges of lying to the U.S. Food and Drug Administration about the dangers of Metabolife 356, a popular diet supplement containing ephedra, the now-banned herbal stimulant linked to dozens of deaths. 0 6 - 0 6 - 2 0 0 6 Metabolife Settlements Reached
By Lisa Girion The former Metabolife International Inc. said in a court document filed Wednesday that it had reached agreements to settle the first 21 of hundreds of injury and death lawsuits over its once best-selling ephedra-based dietary supplement. About $4.7 million of the San Diego-based company's insurance coverage would pay the claims if approved by a U.S. Bankruptcy Court judge, court documents suggest. Once a leading seller of herbal weight control and energy-boosting products, Metabolife filed for bankruptcy protection in July 2005 in the face of mounting suits over Metabolife 356. Ephedra, the primary ingredient, is an herb linked to dozens of heart attacks and 155 deaths. About 400 suits, seeking more than $1 billion in all, were filed before the court-imposed January cut-off. Metabolife stopped selling the supplement in December 2003. Metabolife — now known as MII Liquidation Inc. — sold its remaining products to another company last November for $12 million and is attempting to pay off creditors, including plaintiffs, with those proceeds plus insurance coverage. MII lawyer Debra Riley said that the estate was engaged in monthly mediation talks and that it hoped to settle all the suits by July. "We're all working toward the same goal," she said. John Thornton, a Santa Ana lawyer representing about 50 plaintiffs, was less sanguine. "We're well underway with the process, but I would not call settlement around the corner," he said. A hearing on the first batch of deals is set for June 28. The court also could approve an out-of-court procedure for settling claims for payments of less than $350,000, according to court documents and Riley. |
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