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Indian Origin Pharmaceutical Executive Gets 41 Months for Fraudulently Selling Workout Supplements

Acting North Texas Federal Prosecutor Prerak Shah announced the sentencing of Sitesh Patel, 37, on a conspiracy charge relating to the misbranding of the supplements.

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DALLAS, TX – An Indian American pharmaceutical executive was sentenced by a federal judge in Texas to 41 months in prison for fraudulently selling workout supplements, according to officials.

Acting North Texas Federal Prosecutor Prerak Shah announced Feb. 19 the sentencing of Sitesh Patel, 37, on a conspiracy charge relating to the misbranding of the supplements.

Patel and several of his co-defendants had admitted before the Texas Northern District Court in Dallas that they imported substances with false and misleading labeling of products, according to the Justice Department.

According to court documents, Patel, who was the vice president of SK Laboratories, played a key role in developing and manufacturing the popular workout and weight loss supplements known as Jack3d and OxyElite Pro.

Workout supplements are dietary products used to boost energy for athletics and exercises.

Patel also admitted to a misbranding charge that the department said related in part to OxyElite Pro, which was recalled in 2013 after a Food and Drug Administration investigation into whether the supplement caused liver injuries in consumers.

A federal grand jury charged Patel and others in 2015 with selling some of their products without determining whether they would be safe to use.

Judge Shah said, “We are proud to hold this defendant accountable for lying to the public about ingredients that had the potential to cause them harm.”

Patel was sentenced Feb. 19 by Federal Judge Sam A. Lindsay, who had earlier ordered SK Laboratories to forfeit $6 million in connection with the case, according to the Justice Department.

The court had previously sentenced to various terms of imprisonment four persons who were associated with USPlabs, which distributed the products.

In a separate case in Texas, an Indian American engineer has admitted before another federal court that he fraudulently filed applications for $10 million in COVID-19 relief loans, according to the Justice Department.

Shashank Rai, 30, made the admission Feb. 23 in the Texas Eastern District Federal Court, the department said.

He had claimed that his company, Rai Family LLC, had 250 employees and made applications for loans under the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act.

The loans meant to be a lifeline to businesses affected by the COVID-19 pandemic and help them keep their employees on their payrolls and can be written off if certain conditions are met.

Two Texas state agencies found that there was no record of Rai’s company having employees or revenue, according to the department.

Investigators found in the rubbish outside Rai’s house handwritten notes for investing $3 million that he had sought in one of the PPP loan applications, according to court documents.

According to a Justice Department press release, Rai made two fraudulent claims to two different lenders for loans guaranteed by the SBA for COVID-19 relief through the PPP program. In the application submitted to the first lender, Rai sought $10 million in PPP loan proceeds by fraudulently claiming to have 250 employees with an average monthly payroll of $4 million. In the second application, Rai sought approximately $3 million in PPP loan proceeds by fraudulently claiming to have 250 employees with an average monthly payroll of approximately $1.2 million.

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