8 in South­land ac­cused of selling fake energy drink

Fed­eral in­dict­ment says first la­bels were coun­ter­feit, then the drinks them­selves.

Los Angeles Times - - THE STATE - By Veron­ica Rocha veron­ica.rocha @latimes.com

Eight South­ern Cal­i­for­nia res­i­dents have been in­dicted on charges of selling mil­lions of bot­tles of coun­ter­feit 5-hour Energy drinks na­tion­wide.

The eight are ac­cused of di­vert­ing energy drink sup­plies in­tended to be sold in Mexico to the United States, where they could be sold for a higher price, ac­cord­ing to the U.S. at­tor­ney’s of­fice.

In all, 11 de­fen­dants were named in the fed­eral in­dict­ment un­sealed last­week, ac­cus­ing them of con­spir­ing to traf­fic coun­ter­feit goods, com­mit crim­i­nal copy­right in­fringe­ment and in­tro­duce mis­branded food into in­ter­state com­merce.

“Crim­i­nals who pro­duce and sell coun­ter­feit and mis­branded di­etary sup­ple­ments put the public health at risk by utiliz­ing un­known and un­reg­u­lated in­gre­di­ents that could put the con­sumer in dan­ger of se­ri­ous ill­ness or death,” Spe­cial Agent in Charge Lisa Mali­nowski of the U.S. Food and Drug Ad­min­is­tra­tion said in a state­ment.

Through their com­pany, Baja Ex­port­ing LLC, Joseph Shay­ota, 63, and his wife, Adri­ana Shay­ota, 44, both of El Ca­jon, agreed with Liv­ing Essen­tials, which owns 5hour Energy drink trade­marks, to dis­trib­ute the caf­feine boost in Mexico, ac­cord­ing to the in­dict­ment.

Be­cause the liq­uid di­etary sup­ple­ments were in­tended to be sold in Mexico, the pack­ag­ing and la­bel­ing cre­ated by Liv­ing Essen­tials was in Span­ish. The Shay­otas’ at­tempt to sell the prod­uct in the United States failed be­cause the pack­ag­ing was in Span­ish, the in­dict­ment said.

So they re­placed the la­bel­ing and dis­play boxes with coun­ter­feit la­bels that ap­peared to repli­cate Liv­ing Essen­tials’ pack­ag­ing, ac­cord­ing to the in­dict­ment.

More than 350,000 bot­tles of 5-hour Energy drinks were repack­aged and sold across the United States for 15 cents be­low what Liv­ing Essen­tials charged for au­then­tic bot­tles, the doc­u­ment said.

In De­cem­ber 2011, the Shay­otas sold off what was left of their sup­ply.

Then in 2012, the de­fen­dants be­gan man­u­fac­tur­ing the drinks at an “un­san­i­tary fa­cil­ity us­ing un­trained day work­ers,” the U.S. at­tor­ney’s of­fice said.

The drinks were made up of a mix­ture of un­reg­u­lated in­gre­di­ents. They hired man­u­fac­tur­ers in Guadala­jara, Mexico, tomake plas­tic bot­tles and caps printed with Liv­ing Essen­tials’ logo.

More than 7 mil­lion coun­ter­feit la­bels and hun­dreds of thou­sands of bo­gus dis­play boxes were or­dered from De­cem­ber 2011 to Oc­to­ber 2012. Lot and ex­pi­ra­tion codes on the boxes also were al­tered, the doc­u­ment said.

De­fen­dant Walid Jamil, who owned Michigan-based Mid­west Whole­sale Dis­trib­u­tors, dis­trib­uted more than 4 mil­lion coun­ter­feit bot­tles to the U.S. com­mer­cial in­dus­try, ac­cord­ing to the in­dict­ment.

Healso sold to the Shay­otas and de­fen­dants Kevin At­tiq and Raid At­tiq, who owned the Dan-Dee Co., ac­cord­ing to the in­dict­ment. The At­tiqs live in El Ca­jon.

De­fen­dants Juan Romero, 68, of Up­land, and Les­lie Ro­man, 61, of Ran­cho Cu­ca­monga, owned la­bel­ing com­pa­nies and of­ten used code words such as “michelada” and “juice blend” to re­fer to the coun­ter­feit liq­uid con­tents, ac­cord­ing to the U.S. at­tor­ney’s of­fice.

Mario Ramirez, 55, and Camilo Ramirez, 30, both of San Diego, ran sep­a­rate com­pa­nies hired to print, de­sign and pack­age the prod­ucts, ac­cord­ing to the in­dict­ment.

All the de­fen­dants but Romero were ar­rested on Thurs­day.

Peo­ple who ‘sell coun­ter­feit and mis­branded di­etary sup­ple­ments put the public health at risk....’

— Lisa Mali­nowski, Food and Drug Ad­min­is­tra­tion

Richard Har­tog L.A. Times

THE LA­BELS of the coun­ter­feit bot­tles sold in the U.S. were based on the ac­tual de­sign, above.

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