Gregory Caton Sentenced for
Selling Unapproved New Drugs

Department of Justice News Release
August 24, 2004

Gregory James Caton, age 48, from Lake Charles, Louisiana, was sentenced today to 33 months imprisonment to be followed by 3 years supervised release by United States District Judge Tucker Melançon, announced United States Attorney Donald W. Washington. Caton pled guilty to a Bill of Information in May 2004, charging him with (1) one count of devising a scheme and artifice to defraud numerous victims and utilizing a commercial interstate carrier to carry out the scheme and artifice to defraud; (2) one count of introduction of unapproved new drugs (Cansema Tonic III and H3O) into interstate commerce; and (3) forfeiture of assets. By pleading guilty to count three, Caton agreed to forfeit any property acquired as the result of his criminal violations.

From 1999 to 2003, Caton and his employees utilized an internet site named Alpha Omega Labs to take direct orders for unapproved new drugs represented to have some medicinal qualities. The chemical substances were not approved for sale by the U.S. Food and Drug Administration. In order to legally market a drug in interstate commerce, the drug’s manufacturer is required to comply with all applicable provisions of the Federal Food, Drug, and Cosmetic Act in order to ensure that the products sold are safe for humans and effective for their intended uses. By taking orders for these unapproved new drugs and causing them to be delivered by interstate commercial carriers, Caton was introducing unapproved new drugs into interstate commerce.

As a result of the scheme, Caton received approximately $950,000. On at least two occasions known to the United States, the items shipped by the defendant and utilized by victims resulted in bodily injury and harm to the victim. Caton shipped Cansema Tonic III and H3O via interstate commerce. Cansema Tonic III was intended for use in the cure, mitigation, treatment, or prevention of cancer. H3O was intended for use in the cure, mitigation, treatment, or prevention of athlete’s foot, cuts and burns, eczema, fingernail fungus, chronic gas, gastroenteritis, gingivitis and periodontal disease, halitosis, herpes sores, ophthalmia, psoriasis, sore throat, strep throat, and wounds. Neither drug was recognized as safe and effective by qualified experts for their intended uses and Caton had no approved marketing or investigational applications for the drugs on file.

In order to facilitate the scheme, Caton and/or his wife purchased buildings at two locations and a residence in Lake Charles, Louisiana. The properties were purchased and/or paid for with funds derived from the scheme and are subject to forfeiture pursuant to law.

Alpha Omega Labs was operated from the offices of Lumen Food Corporation located in Lake Charles, Louisiana.

Sentencing in federal court is governed by the United States Sentencing Guidelines established by the United States Congress and the United States Sentencing Commission. Under U.S. Sentencing Guidelines, actual sentences are based upon a formula that takes into account the severity and characteristics of the offense, and a defendant’s criminal history, if any. Parole has been abolished in the federal system.

The investigation was conducted by the U.S. Food and Drug Administration, Office of Criminal Investigations, New Orleans Resident Office and was prosecuted by Assistant United States Attorney Larry J. Regan.

For further information, please contact United States Attorney Donald W. Washington at 337-262-6618 or First Assistant U.S. Attorney Bill Flanagan at 318-676-3600.

This page was posted on May 3, 2006.

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