USA TODAY - For a man heading to prison for selling dangerous weight-loss pills, it seemed a curious time for supplement designer Matt Cahill to start his next company and put a powerful and illegal designer steroid product on the market.
Cahill was facing federal charges for mixing a highly toxic pesticide with baking powder, stuffing it in capsules and selling it over the Internet for weight loss.
The new steroid, to Cahill's knowledge, had never before been tested on humans until he and a few friends tried it themselves for a few weeks before putting it on sale in 2004.
Over the course of a nearly 12-year career, Cahill has continued to launch new and risky products, flourishing in the $30 billion dietary supplement industry as federal regulators struggled to keep up with his changing series of companies, a USA TODAY investigation has found. Some who took his steroid suffered liver damage while others who consumed the weight-loss pills ingested a chemical that had been banned for human use in the 1930s after users went blind.
Cahill's latest best seller, Craze, was named 2012's "New Supplement of the Year" by bodybuilding.com. The pre-workout powder promises "endless energy" and has come under increasing scrutiny over the past year. Lab tests by the U.S. Anti-Doping Agency, a government-affiliated lab in Sweden and industry competitors have detected undisclosed amphetamine-like compounds in samples of what's labeled as an all-natural supplement and sold in GNC stores and on a variety of websites, including Walmart's and Amazon's.
Experts who follow the supplement business closely say Cahill is emblematic of an industry where products can be sold without testing or government approval, and people with checkered pasts, even criminal convictions, operate freely.
"These are not fringe players; these are mainstream dietary supplement companies and products that are in your mainstream health and nutrition stores," said Amy Eichner of the U.S. Anti-Doping Agency, a non-profit group designated by Congress to oversee testing of Olympians and other athletes for banned substances. "It's not that there are a few bad actors," Eichner said. "There are a lot of bad actors."
Exactly how many is unclear.
"Any industry is going to have some fringe players that don't always follow the rules," said Steve Mister, president of the Council for Responsible Nutrition, a supplement industry group. Mister said 150 million Americans safely use supplements - such as multivitamins, herbs and protein powders - with few reported adverse events.
Cahill, through his attorneys, declined to be interviewed about his history in the industry. He is currently facing a federal criminal charge for introducing another supposedly all-natural bodybuilding supplement in 2008, Rebound XT, that prosecutors say contained an unapproved new drug. A federal grand jury in California also has been hearing testimony recently about that product, according to a subpoena issued in the case.
Cahill's lawyer, Aaron Goldsmith, in an e-mail last week, said Cahill "has not engaged in any wrongdoing" and that his company, Driven Sports, "is committed to ensuring the safety and legality of its products." The company, which lists an address on New York's Long Island, has tested more than 30 lots of Craze, Goldsmith said, just under half of the lots put into commerce. "The results of this testing conclusively ruled out the presence of illegal compounds," the e-mailed statement said.
The Craze controversy grew this month when popular fitness model Rob Riches, who has promoted himself as a natural, drug-free bodybuilder, blamed Craze for a failed drug test that cost him his recent win at a British national championship competition.
"The one thing I stand against the most has happened to me," Riches told USA TODAY, adding that Craze's label didn't list any banned substances. "I'm getting these messages of disgust, and they're from my followers."
Riches said Craze was the likely source based on the similarity of the stimulant found in his body and what's been found by others in samples of Craze. He said the other supplements he used around the time of the competition were ones he had taken previously without any problem.
Consumers hospitalized after taking some of Cahill's earlier products said they don't understand why regulators haven't done more to protect the public.
"I feel this guy shouldn't be able to have a business to sell anything," said Steve Francischetti, a 38-year-old Baltimore electrician. Francischetti suffered liver damage in 2006 after taking a muscle-builder called Superdrol - which contained the designer steroid Cahill launched as he was headed to prison, according to federal court records.
Daniel Fabricant, director of the Food and Drug Administration's dietary supplements division, would not answer questions about Cahill's history or whether the agency is investigating Craze. He said the FDA has less authority over supplements than it does drugs, which must be approved by the agency as safe and effective before they can be sold.
The federal laws governing the regulation of supplements treat these products as foods that are assumed to be safe unless proven otherwise.
"What we generally have to do to intervene is we have to show that a product is harmful, is unsafe under all conditions of use, which is a significant scientific burden," Fabricant said. "So it doesn't happen overnight."
HOW CAHILL GOT HIS START
Even an arrest, criminal prosecutions and a prison term have not deterred Cahill from brazenly introducing dangerous products to the market through a changing series of companies.
"It's sort of like he has a license to kill with impunity, to wreak havoc without any consequences," said Frank Hole, whose 17-year-old daughter, Leta, died in 2002 after taking an intentional overdose of weight-loss pills that actually contained a highly toxic chemical pesticide banned for human use. Federal investigators later determined she'd bought them from Cahill's Internet business at the time: designerlabs.com.
The pills Leta bought contained DNP, an industrial chemical used in explosives and as a pesticide. The compound gained brief popularity in the 1930s as a weight-loss drug that promised to safely melt fat away - until consumers started developing cataracts, going blind or dying. Up to 2,500 may have lost their sight from "dinitrophenol cataracts," according to one estimate cited in an FDA research paper.
The FDA has cited DNP's hazardous use as a weight-loss drug as one of the key public health disasters that led Congress to enact the federal Food, Drug and Cosmetic Act in 1938. Under that law, the FDA declared that DNP was too toxic for human use under any circumstance.
To purchase DNP powder for his pill business, Cahill used an alias - Brandon Walsh - and further lied to a West Virginia supply company that he owned a landscaping firm and was going to use the chemical only as an insecticide, federal court records say. Then Cahill and Jason Sacks, a childhood friend turned business partner, mixed the DNP with baking powder, and used an encapsulator to create weight-loss pills.
In addition to DNP, Cahill and Sacks used the Internet and mail to sell a wide range of other pills and potions: injectable steroids, Vicodin and Valium, federal court records say. They were grossing about $30,000 a month and splitting the money equally.
Cahill, who was about 26 at the time, had dropped out of Nassau Community College after falling into a swimming pool in 1997, suffering severe injuries that required multiple surgeries and a period on worker's compensation.
The accident spurred Cahill's interest in supplements. "I was researching vitamins and things that might help me heal faster," he said in the deposition.
Cahill said he had been pursuing a program in exercise physiology, but when questioned by attorneys he couldn't remember taking any courses in chemistry or pharmacology. He never received any degree. Before the accident, his job experience after high school involved working as a condominium lifeguard and at an ice rink.
Investigators from the U.S. Postal Inspection Service became interested in Cahill and Sacks after a postal clerk found liquid vials labeled "steroids" in mail that had broken open. Several months later, when they searched the men's homes, much of the evidence was at Sacks' house, investigators said in a recent interview.
"Cahill's a very intelligent individual," said Postal Inspector Charles Schriver. "He gets a lummox like Sacks to be involved and has him mail it. The money was at Cahill's house."
ONE TEENAGER'S STORY
Leta Hole was in her senior year at Choate Rosemary Hall, an elite, private college-prep school. A longtime hockey player, she'd been concerned about her weight, which at her death doctors estimated was 165 pounds. Her parents said they didn't know she'd been buying over-the-counter weight-loss products from stores and later the Internet - until it was too late.
Leta's mother, Bonnie Hole, vividly recalls the call she got from her daughter in September 2002. "She sounded distressed and she said, 'Mom, I've done something stupid. Please help me. I don't feel good. This was stupid. Can you come home?'"
Bonnie Hole called 911 and raced home. The teenager, who had a history of depression, told doctors she had taken about a dozen of the "diet pills" in a suicide attempt. She'd never done anything like that before, her parents said. At Yale-New Haven Hospital, doctors scrambled to figure out what was in the gel caps and how they could save her.
"They weren't in a pill bottle with a label ... they were in a Ziploc bag," Bonnie Hole said. The bag had "60 DNP" written on it in black marker and contained 27 unmarked clear capsules containing a yellow powder, according to a medical journal article later published by Leta's doctors. Prosecutors would later write that the DNP capsules sold by Cahill's business "did not bear labeling containing adequate directions for use or adequate warnings against use."
Leta's body was being torn apart by the uncontrolled heat-generating chemical reaction produced by the DNP. "She was in such pain and screaming. They tied her down by her wrists and her ankles," Bonnie Hole said. "It was all so chaotic and horrible."
Leta died at the hospital 10 hours after taking the DNP. Her case, doctors later wrote, underscores "the profound risks associated with the use of DNP and other 'supplements' to promote weight loss." There is no antidote to DNP.
Cahill and Sacks pleaded guilty to federal charges involving mail fraud and introducing a misbranded drug into commerce for their sale of DNP weight-loss pills, but were not charged directly with Leta's death.
"I think they believed it was a suicide attempt and didn't believe they could prosecute on it," Frank Hole said.
Postal investigators said her death made them work even harder on the case. "It was heart-wrenching," Schriver said. "Even the doctors didn't know how to treat it."
The Postal Inspection Service, in annual reports that mentioned the investigation, noted that "a 17-year-old Connecticut girl had died from an overdose of DNP" and that prosecutors "did not seek an upward departure from the sentencing guidelines in spite of the girl's death, but her parents began an aggressive letter-writing campaign on her behalf and the judge may decide to increase the defendants' jail time as a result."
Prosecutors forwarded letters from the girl's parents to the judge in the case, records show. Copies of the letters, shared by the Holes with USA TODAY, said that: "Any chance for survival that Leta might have had was eradicated by the defendants' failure to identify the DNP and dosage in the pills."
Cahill's attorney, in a brief statement to USA TODAY, said Cahill's DNP conviction involved activities that occurred over 11 years ago and "was completely unrelated to the supplement industry. At that time, he accepted responsibility for his actions and moved on with his life."
Cahill and Sacks were each sentenced to 24 months in federal correctional facilities. Yet the process took years - allowing Cahill time to launch a series of business ventures even while federal charges were hanging over him. Cahill didn't enter the federal prison facility at Fort Dix, N.J., until June 2005.
In September 2003 - four months after he entered into a plea deal in the DNP case - Cahill started a new company, Designer Supplements, and corporation papers listed him as CEO. And in 2004, Cahill launched what became an infamous and risky designer steroid called Superdrol, securing himself a stream of income while he did his prison time.
THE MAKING OF SUPERDROL
Even with no college degree or formal training in chemistry and despite not having a staff of scientists, getting a blockbuster designer steroid on the market was relatively easy for Cahill.
"I found the chemical name in a book that contains a bunch of other steroids," he testified in the 2008 deposition. The book was Androgens and Anabolic Agents, a chemistry reference published in 1969.
Cahill said he used the Internet to find a company in China and paid about $20,000 for a kilo of the powdered compound. "I went on Alibaba.net," Cahill said. He found other firms to encapsulate the powder and put the pills into bottles, and still another to make labels for it. "I think it was LabelsForLess.com," he told attorneys.
Cahill conceded in the 2008 deposition that the steroid that he called Methasteron and put in bottles of Superdrol had never previously been used for human consumption. But after reading studies of other, similar compounds, he concluded: "In low doses, in short periods of time, it was relatively safe."
Cahill said he felt qualified to make that determination: "I had a scientific background in school, I just don't have a degree."
To determine the suggested dosage for Superdrol, Cahill said he tested the steroid on himself, had his blood tested and offered it to some friends to try.
Cahill produced 2,200 bottles of Superdrol that he sold over the Internet, according to his deposition testimony. The first batch was released in late 2004, he said - the other, around early January 2005. Both sold out in less than 15 minutes, he testified.
In an e-mail to USA TODAY, Cahill's lawyer, Aaron Goldsmith, said that Designer Supplements voluntarily stopped selling Superdrol in 2004, "prior to any reports of severe adverse reactions."
Instead, according to his deposition testimony, Cahill worked out a licensing agreement in early 2005 to let another company sell Superdrol in return for a one-time payment and royalties. The agreement with Anabolic Resources was signed in April 2005, a month after the judgment was entered in Cahill's DNP criminal case and as his prison sentence was about to start, federal court records show.
In his deposition, Cahill denied that his looming incarceration had anything to do with the licensing agreement. He said the deal was to head off Anabolic Resources' plans to sell its own version of Superdrol.
Kevin Smith, who at the time was president of Anabolic Resources, told USA TODAY his company had been looking to make its own Superdrol, but that they were relying on Cahill's scientific expertise and marketing claims that the product was safe and legal.
Cahill was a frequent poster in Internet bodybuilding forums, and users perceived him as "this really up-and-coming guy that makes amazing products," Smith said, adding that he and others in his company had backgrounds in marketing and sales, not science. "We told them we can take Superdrol big, and we did."
At the time of the Superdrol deal, Smith said Cahill talked about how he'd be going away for a while on a research trip. Prison was never mentioned. "He said he had to go overseas and work in different areas to find unique ingredients and botanicals. ... We believed every word of it."
Cahill made a similar announcement on his Designer Supplements website, writing that "in order for me to continue my passion of finding, synthesizing and creating new, cutting edge products, I need to work less on the daily operations of the business and spend more time researching and traveling to various suppliers and chem houses," according to a page captured on April 3, 2005, by the Internet Archive.
Anabolic Resources paid Cahill about $182,000 during the course of the Superdrol licensing agreement, Smith said.
While Cahill was away, Smith said a potential investor flagged Superdrol as a likely illegal steroid just before the FDA sent the company a warning letter in March 2006, prompting the company to recall Superdrol from the market.
"That's when we started getting calls of liver problems," Smith said. "When you get reports of people being injured from your products, there's no worse feeling."
Jareem Gunter was among the Superdrol users who sued Designer Supplements and Anabolic Resources. Gunter was a senior at Lincoln University in Jefferson City, Mo., in 2005 on a full baseball scholarship with dreams of playing professionally. Like many athletes, he was looking for an all-natural dietary supplement that would give him an edge in his workouts - but not break any rules.
After a lot of research, Gunter bought Superdrol. Within weeks, his liver was failing and he said doctors told him he needed a transplant or he could die. Gunter eventually recovered only to learn the NCAA had banned him from competition for steroid use.
Gunter lost his scholarship, dropped out of college and now works as a program director at a high school in Oakland, where he advises student athletes to not take supplements. "I tell people if it's not FDA-approved, don't touch it."
Don Catlin, founder of the UCLA Olympic Lab and a longtime member of the International Olympic Committee's medical commission, said he considers Superdrol "one of the most disturbing compounds that ever came along." Not only was it potent, the toxic effects appeared faster than other steroids, he said.
Designer Supplements settled Gunter's lawsuit for an undisclosed amount, according to federal court records and Gunter's attorney, Larry Cook. Anabolic Resources, by that time, had filed for bankruptcy protection.
In November 2011, Anabolic Resources pleaded guilty to a federal charge of introduction and delivery of unapproved new drugs to interstate commerce for its sales of Superdrol from April 2005 through January 2006, records show.
Cahill and Designer Supplements were not charged, nor were they mentioned in the government's press release.
A GRAND JURY INVESTIGATION
Now Cahill's former partnership with Anabolic Resources appears to be catching up with him. Cahill also licensed another bodybuilding product to Smith's company. The product, Rebound XT, was used by consumers to control estrogen levels that can rise after a course of steroids or pro-hormones.
Smith says Cahill described Rebound XT as legal because it could be traced to the food supply. Federal officials reached a different conclusion. Last August, prosecutors in San Jose filed court papers charging Cahill with introduction and delivery of unapproved drugs into interstate commerce. Federal court records allege the illegal act was the introduction around March 2008 of Rebound XT, which the government says contained a drug that's an aromatase inhibitor that reduces estrogen.
The criminal case remains open, but there have been no further filings in the court record since the original charges last summer. A spokesman for the prosecutor's office had no comment.
Prosecutors subpoenaed Smith to appear before a federal grand jury in San Jose this March and told him to also provide records relating to Rebound XT to a special agent in FDA's Office of Criminal Investigations, the subpoena says.
CRAZE TAKES OFF; QUESTIONS FOLLOW
At the end of 2008, Cahill closed Designer Supplements. "There are several reasons that have contributed to this but right now it's nothing I can discuss," wrote Cahill, who uses the screen name Sldge, on a bodybuilding.com forum that October. After fans of the company replied with dismay, Cahill added: "Just so we are all clear, Im not going anywher! I love this work and have TONS of great formulas."
He'd already launched a new company: Driven Sports.
It was incorporated in July 2008 and listed his wife as the CEO and the couple's modest 1,277-square-foot home in Franklin Square, N.Y., as the firm's principal executive office. Matt Cahill's title at Driven Sports is listed as "VP of Operations" in the American Herbal Products Association member directory.
The company has marketed several products. But Craze really took off after it was launched in late 2011. Sold as a pre-workout powder, Craze promised amazing energy and focus and listed an ingredient that few had heard of before: dendrobium extract.
Dendrobium is a member of the orchid family that has been used in traditional Chinese medicine for centuries to treat such things as thirst and fever. But on supplement industry websites, it's been talked about as the new DMAA - a reference to a once-popular stimulant that some sports supplement makers claimed came from geraniums. The FDA said there's no evidence DMAA was natural and cracked down on its use in 2012, warning that it had received reports of heart problems, nervous system disorders and death.
Questions now are also being raised whether the stimulants in products listing dendrobium on their labels are really natural.
In June 2012, the U.S. Anti-Doping Agency (USADA) did tests on a sample of Craze and found several prohibited stimulants in the product, including amphetamine and amphetamine-related compounds. USADA lists Craze on its website's "High Risk Dietary Supplement List."
This April, SKL, the Swedish National Laboratory of Forensic Science, tested samples of Craze and found two substances that are chemically similar to amphetamine: phenethylamine and N-ethyl-1-phenyl-butan-2-amine.
The stimulants found by USADA and the Swedish lab are not naturally present in dendrobium, according to a review of current scientific literature, said Ikhlas Khan, assistant director of the University of Mississippi's National Center for Natural Products Research, which is studying the issue.
Driven Sports adamantly denies that Craze is spiked, and the company recently began posting its own lab tests, which it says offer "Further proof that Craze does not contain amphetamines."
Cahill, in an e-mail sent to USA TODAY late Wednesday through an attorney, emphasized that his company has "commissioned extensive testing of Craze from a reputable, independent laboratory." He also said: "The product conforms with all regulatory requirements and is safe when used as directed."
When bodybuilder Rob Riches fingered Craze as the source of his failed drug test, Driven Sports tweeted on July 10 to Riches and another poster: "That compound is NOT in the product. Don't believe a competitor's smear campaign."
FDA wouldn't say whether it has done its own analysis of Craze.
"I can't speak directly to Craze," said Fabricant, who heads the agency's supplement division, "but what I can say is we are concerned about the rise of products that have a phenethylamine background - similar to amphetamine - on the market."
Dendrobium is also on the agency's radar: "We have some questions on whether or not it's actually dendrobium in the dendrobium," Fabricant said.
Putting undisclosed chemical stimulants into supplements poses health risks, Fabricant said.
Last November, the FDA received a report from the parent of a 15-year-old who said the boy had used Craze and was found "unconscious and unresponsive" on Oct. 29. The teen was taken by EMS to a hospital. After CAT scans and many other tests it "turned out that the product he drank tested positive for amphetamine," according to the parent's report to the FDA. The agency redacted the parent's name before the report was released to USA TODAY in response to a Freedom of Information Act request.
Despite the controversy, Craze remains a big seller. Bodybuilding.com recently named Craze one of 12 nominees for 2013 Pre-Workout Supplement of the Year. The winner, as voted on by the public, will be announced in September.
Meanwhile, Matt Cahill is continuing to talk up his products on Internet message boards while working on new supplement formulas.
Leta Hole's parents said if they could deliver a message to Cahill, it would be to stop.
"Think about the pain you're causing," Frank Hole said. Bonnie Hole added: "Stop before you ruin somebody else's lives. It's not just us, and it's not just our family. It's affecting a lot of people."