Paul Chan Gets 11 Years for Selling Banned Ephedrine Supplements

New York man Chenhsin Chan, a/k/a Paul Chan, 44, of Elmhurst, N.Y., was sentenced Friday to 11 years and 3 months in federal prison for peddling dangerous, banned ephedrine-laced dietary supplements online. The conviction follows a three-day jury trial in May 2016, where Chan was found guilty on 30 felony counts tied to a years-long scheme that flouted federal health laws and endangered consumers nationwide.

Chan owned and operated The Wholesale Source, LLC, running websites including www.thatswholesale.com and www.ephedrawholesale.com to push supplements loaded with ephedrine alkaloids—substances the FDA banned in April 2004 due to unreasonable risk of illness or injury. Despite repeated warnings from federal investigators, Chan kept selling the illegal products from at least July 2005 through August 2012, raking in over $4.5 million, including sales to customers in the Northern District of Georgia.

Prosecutors revealed that Chan’s websites made outright false claims, telling buyers that ephedrine had been approved by the FDA for treating diseases and that it was “never been illegal.” These lies were designed to trick customers into thinking they were buying legal, safe products. In reality, they were purchasing adulterated, potentially life-threatening supplements with no oversight or quality control.

The federal indictment, handed down May 29, 2014, charged Chan with ten counts of mail fraud, ten counts of introducing adulterated food into interstate commerce, five counts of illegally distributing a listed chemical (ephedrine), and five counts of money laundering. The jury convicted him on all 30 counts, sealing his fate in a case that laid bare the dangers of unregulated online supplement sales.

U.S. District Judge Orinda D. Evans ordered Chan to serve 11 years, 3 months behind bars, followed by three years of supervised release. In addition, the court ordered the forfeiture of assets bought with criminal proceeds: a $950,000 New York property, a Mercedes Benz worth over $50,000, a Lamborghini Gallardo valued at $117,000, and more than $666,000 in cash.

‘Today’s sentence reflects the serious implications of distributing substances like ephedrine on the Internet,’ said U.S. Attorney John Horn. FDA Special Agent Justin Green added, ‘We will remain vigilant in our efforts to protect American consumers.’ The case was investigated by the FDA’s Office of Criminal Investigations with assistance from the DEA and prosecuted by Assistant U.S. Attorneys Steven D. Grimberg and Kelly K. Connors.

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