A former marketer for a Boca Raton, Florida-based company pleaded guilty Sept. 4 to a charge of conspiracy to defraud the United States in connection with the company’s attempts to conceal from the FDA information about illegal drug products labeled as dietary supplements that it marketed (United States v. Winsauer, No. 9:19-cr-80030-WPD (S.D. Fla.)).

David Winsauer worked between 2014 and 2018 as vice president of Blackstone Labs L.L.C., where he managed the company’s marketing, website and direct-to-consumer sales.

Winsauer admitted that he and other coconspirators “worked to portray the company to consumers as complying with applicable federal laws, when in fact the company arranged to manufacture products that were illegal under federal law,” the Department of Justice (DOJ) said.

In addition, Winsauer acknowledged that the coconspirators coordinated to conceal sales of products labeled as dietary supplements from the FDA. For example, he admitted, they removed information about illegal products from online marketing to create the false impression that Blackstone Labs was no longer selling the illegal products.

The government had alleged that Winsauer lied to FDA special agents during an investigation into Blackstone Labs by the agency’s Office of Criminal Investigations.

March 2019 Indictment

In an indictment filed in March 2019 in the U.S. District Court for the Southern District of Florida, Winsauer was charged along with Blackstone Labs; Ventech Labs L.L.C., which manufactured and sold products that it claimed were dietary supplements, including products marketed by Blackstone Labs; and five other individuals.

In the indictment, various defendants were charged with conspiracy, introducing unapproved new drugs into interstate commerce, conspiracy to distribute controlled substances, distribution of a controlled substance, possession with the intent to distribute a controlled substance, and money laundering.

In the conspiracy count, the government alleged that Winsauer and others created fraudulent documents and records and lied to customers to conceal Blackstone Labs’ illegal conduct. Winsauer also was charged with conspiracy to distribute controlled substances and distribution of a controlled substance.

The individual defendants included Phillip Braun, the cofounder of Blackstone Labs and the company’s president, and Aaron Singerman, another cofounder and the chief executive officer of the company.

The drug products allegedly marketed by the defendants included designer steroids, including various prohormones; selective androgen receptor modulators (SARMs) such as ostarine, synthetic chemicals designed to mimic the effects of testosterone and other anabolic steroids; and nootropic substances, marketed as mind-altering or cognition-enhancing products, including picamilon, which was marketed as an antidepressant.

Factual Proffer

According to a factual proffer filed in the district court Sept. 2, Winsauer worked under the supervision of Braun and Singerman, and he knew that Blackstone Labs was being operated in a way that was meant to thwart the FDA’s ability to regulate the company’s dietary supplements.

For example, he knew that, at Braun and Singerman’s direction, the company portrayed itself in social media, on the website, and in interactions with customers as being in compliance with FDA requirements. However, as Winsauer knew, the company’s products were not manufactured in compliance with those requirements.

Moreover, Winsauer knew that other companies owned or controlled by Braun and Singerman — including the dietary supplement manufacturer Fight Pharm L.L.C., its successor VBS Laboratories L.L.C., and VBS Laboratories’ successor Ventech Labs L.L.C. — also were not in compliance with federal law. The manufacturers allegedly were created so that Braun and Singerman could shift the sale of drugs and other products away from Blackstone Labs to hide their sale of illegal drugs from the FDA.

In addition, Winsauer knew that Braun and Singerman worked to minimize or deflect FDA scrutiny of Blackstone Lab’s activities and products. For example, he knew that Braun, Singerman, Blackstone Labs and other coconspirators arranged to remove information about illegal products from Blackstone Lab’s website and online marketing “to create the impression that Blackstone Labs was no longer selling those products.”

In June 2015 Singerman directed Winsauer to remove information from Blackstone Labs’ YouTube advertisements that referred to steroid and prohormone products. As Winsauer knew, his codefendants continued to sell the unlawful products after references to them were removed from the company website and public advertising.

Moreover, the factual proffer stated, Winsauer knew that Braun approved instructions requiring Blackstone Labs sales employees to tell consumers that its product Super DMZ RX 2.0, an anabolic steroid, was “discontinued and illegal for us to sell,” despite the fact that Blackstone Labs and Braun continued to sell the product wholesale to retailers.

Also, in a June 2015 email, the proffer reported, Singerman told Winsauer and Braun, “We didn’t want any SARMs advertised in mags … Our Ostapure ad in [Muscular Development magazine] may cause some problems now. Please never do that again. You had 1/3 page for Ostapure in the most recent one, and now someone who saw it might report us to FDA.”

According to the indictment, in September 2015 Braun emailed Winsauer and others, “I don’t even want SARMs in my warehouse. … I am more nervous about this [than] I was about the prohormones.”

In November 2015, Winsauer admitted, he asked Braun whether an illegal dietary supplement product could be sold at a retail store controlled by Braun and Singerman. Braun replied “Yes” in a text message.

During an interview with FDA special agents in February 2017, Winsauer allegedly claimed falsely that Blackstone Labs had stopped selling its Super DMZ products in December 2014.

Sentencing, Trial Scheduled

Winsauer was scheduled to be sentenced on Nov. 12. He faces a maximum penalty of five years in prison.

Another defendant, Robert DiMaggio, who cofounded Blackstone Labs along with Braun and Singerman, pleaded guilty in November 2019 to one count of conspiracy. DiMaggio was scheduled to be sentenced on Dec. 8.

A trial of the remaining defendants was scheduled to begin Oct. 12.