Eleven charged in counterfeit energy drink conspiracy

The Department of Justice estimates that over four million bottles of counterfeit 5-Hour ENERGY® that were made with unregulated ingredients in an unsanitary facility were sold to distributors in the United States as part of a sophisticated, international counterfeiting conspiracy. The Department of Justice announced that 11 individuals were indicted for their part in the conspiracy and are facing charges for crimes relating to trafficking counterfeit goods, introducing misbranded food into interstate commerce, and criminal copyright infringement.

5-Hour ENERGY is a dietary supplement that is manufactured in Wabash, Indiana by a group of entities identified as Living Essentials,  LLC, which owns the trademarks and a copyright associated with the product line and does not provide any other entities licenses to manufacture the products.


According to the indictment, the conspiracy began after Joseph Shayota and Adriana Shayota entered into an agreement with Living Essentials to distribute 5-Hour ENERGY in Mexico through their company, Baja Exporting LLC.  The agreement provided that the drink was to be distributed solely in Baja, Mexico, and Living Essentials would manufacture the drink and provide labeling and display boxes that were printed in Spanish. The indictment alleges that the Shayotas tried to divert the products in order to sell them in the U.S. at a higher price than in Mexico. However, they were unsuccessful in selling the products because of the Spanish-language labels and display boxes. As a result, they allegedly made counterfeit 5-Hour ENERGY labels and repackaged the products in the fake labels. They are alleged to have sold over 350,000 of the repackaged drinks at a price that was 15 percent lower than the amount the product typically sells for in the U.S.


After the Shayotas had sold off all of the repackaged 5-Hour ENERGY drinks, they allegedly decided to manufacturer their own, fake version of the drink. The indictment alleged that, in early 2012, they used untrained workers to manufacture the drink in an unsanitary facility. The Shayotas’ manufacturing process included mixing unregulated ingredients in plastic vats. The indictment further alleges that they ordered seven million fake label sleeves and hundreds of thousands of fake display boxes and marked the bottles with fake lot and expiration codes that they periodically changed to mimic valid codes.  The Shayotas also allegedly hired manufacturers to produce blank plastic bottles and caps that were imprinted with the trademarked “Running Man” logo and purchased various equipment including a steam tunnel machine for shrink wrapping the fake labels.


The product was allegedly distributed by Midwest Wholesale Distributors, which sold more than four million of the counterfeit drinks through various commercial channels. The Department of Justice released a partial list of retailers to whom the counterfeit energy drinks were sold. The list reveals that the drinks were sold to retailers across several states including, California, New York, and Michigan.

FDA Oversight

The FDA regulates dietary supplements such as 5-Hour ENERGY. The Food, Drug, and Cosmetic Act (FDC Act) (21 U.S.C. § 331) prohibits the introduction of adulterated or misbranded food, drugs, or cosmetics into interstate commerce. The Act casts a broad net of  liability, and the FDA warns that anyone who introduces adulterated or misbranded products into interstate commerce can be implicated, including manufacturers, distributors, and retailers.

According to Special Agent in Charge Lisa L. Malinowsk of the FDA’s Los Angeles Field Office of Criminal Investigations, regulation is important in protecting the safety of U.S. consumers. In a released statement she said, “Criminals who produce and sell counterfeit and misbranded dietary supplements put the public health at risk by utilizing unknown and unregulated ingredients that could put the consumer in danger of serious illness or death.  This alleged counterfeit operation was especially egregious as the investigation revealed this product was sold, distributed and placed on the shelves of numerous retailers throughout the United States.  We will continue to investigate violators of our laws and work to bring them to justice.”

According to the Living Essentials website, the counterfeit energy drinks were removed from store shelves years ago.