Owner of Mount Olive company admits million dollar fraud

The owner of a dietary supplement manufacturing company based in Flanders has pleaded guilty to conspiracy to commit wire fraud for a scheme in which he directed the sale of diluted and adulterated dietary ingredients and supplements.

Raw Deal owner Barry Steinlight, 69, of Hackettstown pleaded guilty Wednesday. As part of his plea agreement, Steinlight admitted that Raw Deal’s gross sales during the scheme were between $7 million and $20 million. Steinlight has agreed to forfeit more than $1 million in profits.

“Barry Steinlight diluted his products, cheated his customers and lied to the Food and Drug Administration when they came to inspect his company,” U.S. Attorney Paul J. Fishman said. “This scheme went on for four years and essentially became the business model at his company. People who sell and use dietary supplements have the right to expect that the ingredients are listed and they get what they paid for.”

The conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is scheduled for March 30.

According to documents filed in this case and statements made in court:

From at least 2009 through November 2013, Steinlight instructed Raw Deal employees to add “fillers,” including maltodextrin, viobin cocoa replacer and rice flours to the dietary ingredients and supplements packaged for, and sold to, Raw Deal’s customers.

These “fillers” were added without customer consent or knowledge. Steinlight also directed Raw Deal employees not to list the “fillers” as ingredients on the certificates of analysis issued to its customers as proof of the identity of the ingredients contained in the products.

In addition to directing the dilution and adulteration of Raw Deal’s products, Steinlight also directed Raw Deal employees to create certificates that falsely certified that certain of Raw Deal’s products were kosher or organic. Further, during a FDA inspection of Raw Deal in February 2012, Steinlight instructed employees to alter a document before providing it to the FDA.

“When a company distributes adulterated and misbranded dietary supplements, they put consumers at risk,” said James J. Royal, acting special agent in charge , who investigated the case. “Today’s plea agreement should serve as a reminder that FDA’s Office of Criminal Investigations will continue working with the Department of Justice to protect consumers from public health risks and fraud.”

Steinlight’s attorney could not be reached for comment Thursday night.