Metabolife International, Inc. was a
multi-level marketing
Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial and sometimes illegal marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salarie ...
company based in
San Diego, California
San Diego ( , ) is a city on the Pacific coast of Southern California, adjacent to the Mexico–United States border. With a population of over 1.4 million, it is the List of United States cities by population, eighth-most populous city in t ...
which manufactured
dietary supplements
A dietary supplement is a manufactured product intended to supplement a person's diet by taking a pill, capsule, tablet, powder, or liquid. A supplement can provide nutrients either extracted from food sources, or that are synthetic ...
. Metabolife's best-selling product, an
ephedra supplement called ''Metabolife 356'', once generated hundreds of millions of dollars in annual sales.
However, Metabolife 356 and other ephedra-containing supplements were linked to thousands of
serious adverse event
In drug development, serious adverse event (SAE) is defined as any untoward medical occurrence during a human drug trial that at any dose
# Results in death
# Is life-threatening
# Requires inpatient hospitalization or causes prolongation of e ...
s, including deaths, which caused the
U.S. Food and Drug Administration
The United States Food and Drug Administration (FDA or US FDA) is a federal agency of the Department of Health and Human Services. The FDA is responsible for protecting and promoting public health through the control and supervision of food ...
(FDA) to ban the sale of ephedra-containing dietary supplements in 2004.
Subsequently, Metabolife's founder Michael Ellis was convicted of lying to the FDA and concealing evidence of ephedra's dangers, and the company and its owner were both convicted of
income tax evasion
Tax evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduc ...
. A congressional investigation found that Metabolife had received thousands of reports of serious adverse events, many occurring in young and otherwise healthy people, and that Metabolife concealed the reports and acted with "indifference to the health of consumers."
History
Metabolife was founded in the early 1990s by Michael Ellis, a former
police officer
A police officer (also called policeman or policewoman, cop, officer or constable) is a Warrant (law), warranted law employee of a police, police force. In most countries, ''police officer'' is a generic term not specifying a particular rank. ...
on
probation
Probation in criminal law is a period of supervision over an offence (law), offender, ordered by the court often in lieu of incarceration. In some jurisdictions, the term ''probation'' applies only to community sentences (alternatives to incar ...
for charges relating to his involvement with a
methamphetamine
Methamphetamine (contracted from ) is a potent central nervous system (CNS) stimulant that is mainly used as a recreational drug use, recreational or Performance-enhancing substance, performance-enhancing drug and less commonly as a secon ...
lab.
Ellis and a boyhood friend, Michael Blevins, were arrested in 1989 for producing and distributing methamphetamine. Both Ellis and Blevins cooperated with federal authorities in return for lighter sentences. Following Blevins' release from prison, the two formed Metabolife to market ephedra, a herbal supplement containing compounds chemically related to methamphetamine.
Ellis served as the company's CEO until September 2000, when he was succeeded by David Brown (Brown went on to serve as president and CEO of
LifeVantage in 2008).
Metabolife 356, an ephedra supplement manufactured by
Chemins,
was initially marketed by Metabolife as a
bodybuilding supplement
Bodybuilding supplements are dietary supplements commonly used by those involved in bodybuilding, weightlifting, mixed martial arts, and athletics for the purpose of facilitating an increase in lean body mass. Bodybuilding supplements may contai ...
, but in 1995 was rebranded as an aid for
dieting
Dieting is the practice of eating food in a regulated way to decrease, maintain, or increase body weight, or to prevent and treat diseases such as diabetes and obesity. As weight loss depends on calorie intake, List of diets, different kinds of ...
. The product became highly successful due to a marketing plan that enlisted customers to advertise and sell the supplement;
at their peak, sales of Metabolife 356 were in the hundreds of millions of dollars annually.
At one point, Metabolife offered the
Russian government
The Russian Government () or fully titled the Government of the Russian Federation () is the highest federal executive governmental body of the Russian Federation. It is accountable to the president of the Russian Federation and controlled by ...
$15 million to paint its logo on an
International Space Station
The International Space Station (ISS) is a large space station that was Assembly of the International Space Station, assembled and is maintained in low Earth orbit by a collaboration of five space agencies and their contractors: NASA (United ...
rocket and incorporate Metabolife's ephedra supplement into the diet of its
cosmonaut
An astronaut (from the Ancient Greek (), meaning 'star', and (), meaning 'sailor') is a person trained, equipped, and deployed by a List of human spaceflight programs, human spaceflight program to serve as a commander or crew member of a spa ...
s.
Regulation and lobbying
In the late 1990s, the
U.S. FDA considered regulating ephedra more strictly, in response to reports of adverse reactions and more than 100 deaths linked to the supplement. These included reports of
psychosis
In psychopathology, psychosis is a condition in which a person is unable to distinguish, in their experience of life, between what is and is not real. Examples of psychotic symptoms are delusions, hallucinations, and disorganized or inco ...
,
heart attack
A myocardial infarction (MI), commonly known as a heart attack, occurs when Ischemia, blood flow decreases or stops in one of the coronary arteries of the heart, causing infarction (tissue death) to the heart muscle. The most common symptom ...
,
stroke
Stroke is a medical condition in which poor cerebral circulation, blood flow to a part of the brain causes cell death. There are two main types of stroke: brain ischemia, ischemic, due to lack of blood flow, and intracranial hemorrhage, hemor ...
, and
diabetic ketoacidosis
Diabetic ketoacidosis (DKA) is a potentially life-threatening acute complication of diabetes mellitus. Signs and symptoms may include vomiting, abdominal pain, deep gasping breathing, increased urination, weakness, confusion and occasionally ...
. A clinical trial conducted to address safety concerns found that Metabolife 356 increased
blood pressure
Blood pressure (BP) is the pressure of Circulatory system, circulating blood against the walls of blood vessels. Most of this pressure results from the heart pumping blood through the circulatory system. When used without qualification, the term ...
and induced mild
cardiac arrhythmia
Arrhythmias, also known as cardiac arrhythmias, are irregularities in the heartbeat, including when it is too fast or too slow. Essentially, this is anything but normal sinus rhythm. A resting heart rate that is too fast – above 100 beat ...
s; the trial concluded that there were serious safety concerns associated with the use of Metabolife.
Metabolife took an active role in
lobbying
Lobbying is a form of advocacy, which lawfully attempts to directly influence legislators or government officials, such as regulatory agency, regulatory agencies or judiciary. Lobbying involves direct, face-to-face contact and is carried out by va ...
against regulation of ephedra, forming an advocacy group called the Dietary Supplement Safety and Science Coalition and contributing heavily to
Congressmen
A member of congress (MOC), also known as a congressman or congresswoman, is a person who has been appointed or elected and inducted into an official body called a congress, typically to represent a particular constituency in a legislature. The ...
Brian Bilbray
Brian Phillip Bilbray (born January 28, 1951) is an American politician who served in the U.S. House of Representatives from 1995 to 2001 and again from 2006 to 2013. He is a member of the Republican Party.
Bilbray was Chairman of the House I ...
(
R-
Calif.) and
Dan Burton
Danny Lee Burton (born June 21, 1938) is an American politician who was the United States House of Representatives, U.S. representative for , and previously the , serving from 1983 until 2013. He is a member of the Republican Party (United Stat ...
(
R-
Ind.), among other politicians.
Bilbray subsequently criticized the FDA's treatment of Metabolife and its efforts to regulate ephedra. During this period in the late 1990s, Metabolife contributed $1.6 million in
soft money
The financing of electoral campaigns in the United States happens at the federal, state, and local levels by contributions from individuals, corporations, political action committees, and sometimes the government. Campaign spending has rise ...
to both political parties, and almost $3 million to
lobbyists
Lobbying is a form of advocacy, which lawfully attempts to directly influence legislators or government officials, such as regulatory agencies or judiciary. Lobbying involves direct, face-to-face contact and is carried out by various entities, in ...
.
At the state level, Metabolife contributed $10,000 to then-Governor of Texas
George W. Bush
George Walker Bush (born July 6, 1946) is an American politician and businessman who was the 43rd president of the United States from 2001 to 2009. A member of the Bush family and the Republican Party (United States), Republican Party, he i ...
, who intervened to stop regulation which would have banned
over-the-counter
Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs, which may be supplied only to consumers possessing a valid pres ...
sales of ephedra. Bush subsequently returned the $10,000 after Ellis' and Blevins' methamphetamine convictions were publicized in the media.
Other recipients of Metabolife contributions included then-Governor of California
Joseph Graham 'Gray' Davis, Jr., who was given $175,000.
Legal issues
Metabolife was investigated by the
Internal Revenue Service
The Internal Revenue Service (IRS) is the revenue service for the Federal government of the United States, United States federal government, which is responsible for collecting Taxation in the United States, U.S. federal taxes and administerin ...
and the
Department of Justice
A justice ministry, ministry of justice, or department of justice, is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a ...
for
income tax evasion
Tax evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduc ...
; ultimately, the company pleaded guilty to filing fraudulent tax returns and was sentenced to pay a criminal fine of $600,000.
Metabolife owner William Bradley also pleaded guilty to evading millions of dollars in taxes and was sentenced to 6 months in
federal prison
A federal prison is operated under the jurisdiction of a federal government as opposed to a state or provincial body. Federal prisons are used for people who violated federal law (U.S., Mexico), people considered dangerous (Brazil), or those sen ...
and 2 years of
probation
Probation in criminal law is a period of supervision over an offence (law), offender, ordered by the court often in lieu of incarceration. In some jurisdictions, the term ''probation'' applies only to community sentences (alternatives to incar ...
.
According to federal prosecutors in the case against Metabolife and its executives, the company's certified public accountant, Michael Compton, knew about and helped conceal Metabolife's illegal activities.
[ Compton had admitted falsifying tax returns for company executives and was complicit in the company's failure to account for $93.7 million in income on its income tax returns from 1996 through 1999.] Compton had assisted the company in setting up secret offshore bank accounts and trusts in the Cayman Islands and was aware that Bradley, Ellis, and Blevins each had over $1 million in unreported cash concealed in safes within their homes.[ In July 2002, criminal investigators of the Internal Revenue Service raided Compton's office, seizing documents and computer data,][ and in November 2003, 10 days after a warrant against Metabolife and its principals was unsealed in U.S. District Court, Compton died from a self-inflicted gunshot wound to the head.][
Some of the politicians associated with Metabolife also encountered legal difficulties; Texas state legislators ]Jeff Wentworth
Earl Jeffrey Wentworth (born November 20, 1940) is a Republican Party (United States), Republican former member of the Texas Senate from San Antonio, Texas, San Antonio. He represented Texas Senate, District 25, District 25 in the upper legislat ...
and Rick Green were accused of illegal lobbying on behalf of the company.
Following the FDA's ban of ephedra, Michael Ellis was indicted on eight counts of making false statements
Making false statements () is the common name for the United States federal process crime laid out in Section 1001 of Title 18 of the United States Code, which generally prohibits knowingly and willfully making false or fraudulent statements, or ...
to the FDA in an effort to obstruct regulation of ephedra. Ellis ultimately pled guilty to a single count of lying to the FDA about the adverse effects of Metabolife 356. He was sentenced to 6 months in federal prison and a $20,000 fine.
In response to falling sales, and facing more than $1 billion in personal injury
Personal injury is a legal term for an Injury (law), injury to the body, mind, or emotions, as opposed to an injury to property. In common law, common law jurisdictions the term is most commonly used to refer to a type of tort lawsuit in which the ...
legal claims related to Metabolife 356, Metabolife filed for Chapter 11 bankruptcy
Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...
in 2005. The company's furnishings and property, including a large collection of artwork, were liquidated in late 2006 to compensate creditors and settle outstanding personal-injury claims.
Metabolife's non-ephedra assets were acquired by Ideasphere Inc., a New York-based dietary-supplement manufacturer, for $12 million in 2007. In 2008, Michael Ellis authored a memoir entitled ''The Metabolife Story: The Rape of Cinderella'', with a testimonial by the former FBI
The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and Federal law enforcement in the United States, its principal federal law enforcement ag ...
special agent who arrested Ellis in 1989 for producing and distributing methamphetamine.
References
External links
Metabolife home page
Metabolife 356 Associated With Increased Cardiac Risk
Peggy Peck, ''Medscape''
*
{{Multi-level marketing
Companies based in California
Companies established in 1995
Corporate scandals
Health law in the United States
Dietary supplements
Defunct multi-level marketing companies
Companies disestablished in 2006
Bankrupt companies of the United States
1995 establishments in California
2006 disestablishments in California