Legal Issues
Following the FDA's ban of ephedra, Michael Ellis was indicted on eight counts of making false statements to the FDA in an effort to obstruct regulation of ephedra. Ellis ultimately pled guilty to a single count of lying to the FDA about the adverse effects of Metabolife 356. He was sentenced to 6 months in federal prison and a $20,000 fine.
Metabolife was also investigated by the Internal Revenue Service and the Department of Justice for income tax evasion; ultimately, the company pled guilty to filing fraudulent tax returns and was sentenced to pay a criminal fine of $600,000. Metabolife owner William Bradley also pled guilty to evading millions of dollars in taxes and was sentenced to 6 months in federal prison and 2 years of probation. Some of the politicians associated with Metabolife also encountered legal difficulties; Texas state legislators Jeff Wentworth and Rick Green were accused of illegal lobbying on behalf of the company.
In response to falling sales, and facing more than $1 billion in personal injury legal claims related to Metabolife 356, Metabolife filed for Chapter 11 bankruptcy in 2005. The company's furnishings and property, including a large collection of artwork, were liquidated in late 2006 to compensate creditors and settle outstanding personal-injury claims.
Metabolife's non-ephedra assets were acquired by Ideasphere Inc., a New York-based dietary-supplement manufacturer, for $12 million in 2007. In 2008, Michael Ellis authored a memoir entitled The Metabolife Story: The Rape of Cinderella, with a testimonial by the former FBI special agent who arrested Ellis in 1989 for producing and distributing methamphetamine.
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