China Business Owner Sentenced in Supplement Scheme

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A Shanghai, China business owner has been sentenced in Dallas to 18 months imprisonment and one year of supervised release in connection with a scheme to sell mislabeled dietary supplements. Xu Jia Bao (aka Fred Xu) is the principal of Shanghai Waseta International Trade Co. Ltd., a Chinese firm that sells raw ingredients for use in dietary supplements. Xu pleaded guilty 8/2018 in the Northern District of Texas to one count of wire fraud, according to the Justice Department. His company also pleaded guilty to wire fraud in September 2018. The company was sentenced in February to one year of probation and ordered to pay a $500,000 fine. 

 

As part of his guilty plea, Xu admitted that he agreed with others working at Waseta to sell synthetic stimulant ingredients, including the substance known as DMHA, to a purported dietary supplement manufacturer in the U.S. According to the government, Xu admitted that the purported dietary supplement manufacturer, actually a confidential government informant, told him that Waseta ingredients would not be accurately listed on the labels of the finished dietary supplement. Xu admitted that he knew major American retailers would refuse to carry supplements known to contain certain stimulants, such as DMHA. Xu also admitted that he and Waseta caused a falsely labeled shipment of DMHA to be sent to Texas.

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