M&M Wholesale had planned to sell 500,000 counterfeit Similac cans -- FDA affidavit.

SIMILAC COUNTERFEITERS HAD PLANNED TO SELL 500,000 CANS of an imitation of Ross Labs' powder infant formula with iron, according to a Feb. 9 affidavit written by FDA Office of Criminal Investigations Special Agent Eric Owen. Owen reported that the counterfeiters, Santa Ana, Calif.-based M&M Wholesale, "entered into a contract" with Westminster, Calif.-based supplier Southwest Multi Food under which M&M "would purchase 500,000 pounds of milk-based, iron-fortified powdered infant formula" from Southwest Multi Food.

According to a Feb. 10 FDA press release, federal agents "seized 38,000 pounds of the product prior to distribution and recovered from retail and wholesale outlets another 6,366 one-pound cans." Owen noted that FDA confiscated "approximately 33,000 pounds of powdered baby formula in 50-pound brown sacks" from Southwest Multi Food.

FDA said that Ivy Ong of Mission Viejo, Calif., an employee of M&M Wholesale, was "arrested and charged with trafficking in counterfeit goods." An additional arrest warrant has been issued for Mohamad Mostafa of M&M Wholesale. At this time, Mostafa remains at large and is being sought by federal authorities.

Abbott's Ross Labs subsidiary alerted FDA's San Francisco District Office and Safeway supermarkets on Feb. 1 that it had received complaints from consumers regarding its Similac powdered infant formula with iron. After investigating the matter, Abbott and FDA discovered that counterfeit Similac was being sold. A Feb. 2 "FDA Alert" reported that the imitation product was milky-white rather than creamy yellow, included a clear scoop instead of the usual green scoop, and had lot numbers of 87532RB APR96 0341, 87532RB APR96 ("The Tan Sheet" Feb. 13, p. 11).

Owen reported in the affidavit that "M&M received bulk quantities of infant formula from [Southwest Multi Food], which was then canned and labeled by M&M for both domestic and foreign consumption." The contract between Southwest Multi Food and M&M was recovered, Owen said, and stipulates that the infant formula "was not to be sold to any party for distribution in the United States or Canada, as [the infant formula] is for export only."

Owen noted that documents found in a search of M&M include a "certificate of compliance" by Southwest Multi Food. In the certificate, Southwest Multi Food "certified that a bulk quantity of formula provided to M&M met or exceeded the U.S. FDA nutritional requirements for infant formula, and [the product] was manufactured in an FDA-approved facility."

On Feb. 6, attorney William Hubbard, representing Chicago-based bulk infant formula manufacturer Neovex, contacted FDA to report that Neovex "had recently sold 40,000 pounds of generic powder formula" to Southwest Multi Food, Owen said. Neovex believed that "the baby food, not approved by the FDA for domestic use, was intended for shipment to Saudi Arabia." The product was packed "in 50-pound bags that were labeled `Powdered Infant Formula: For Export Only,'" Owen stated.

Neovex President David Hughes had his attorney, William Hubbard, contact FDA "because he was concerned that the product he sold to [Southwest Multi Food] was being used to make counterfeit Similac," Owens said. Hughes reported that Neovex "had received a complaint" from Southwest Multi Food President Nikola Jareb that "the baby-powder delivered by Neovex was not yellow enough." Hughes also noted that Jareb had "requested green scoops to be delivered with the product," Owens said.

"FDA is continuing to evaluate the counterfeit infant formula product for safety and nutrition [and] the FDA has conducted an inspection of the manufacturer of the bulk product," the Feb. 10 agency press release states.

"The inspection and tests on the product do not indicate parents should be concerned, but there have been reports of adverse reactions that are being investigated," FDA noted. The agency warned that the counterfeit product should not be used. FDA Commissioner David Kessler added that "parents can have full confidence in the real product."

California Central District Assistant U.S. Attorney Wayne Gross, lead prosecutor in the case, said that the criminal investigation is continuing and the U.S. Attorney's office is deciding whether other individuals will be indicted in the case.

In addition, a product liability class action lawsuit was filed on Feb. 17 by San Francisco law firm Girard & Green in San Mateo County (California) Superior Court against Safeway, Inc., M&M Wholesale, Ong, Mostafa, Southwest Multi Food, and distributor Newton Wholesale.