Legally Speaking with Michael Mulligan
Legally Speaking with Michael Mulligan
Sentencing for Adult Store's "Herbal Remedy" Contained Triple-Dose Prescription Drugs
A Canadian adult entertainment company faces an $850,000 fine after Health Canada's undercover operation exposed a lucrative scheme selling "natural health products" that secretly contained prescription medication. Michael Mulligan walks us through how MFH International Enterprises marketed pills called "Harmony" and "Passion Femme" as herbal alternatives while charging premium prices of nearly $140 for just 10 tablets. Health Canada's testing revealed these products contained triple doses of erectile dysfunction medications - putting unwitting consumers at serious risk, especially those with heart conditions.
The case raises alarming questions about consumer safety in the natural health product market. As Mulligan points out, "Not everything natural is necessarily good for you," noting that even legitimately natural ingredients with exotic names like "horny goat weed" and "tomcat" deserve scrutiny. The court's substantial fine was carefully calculated to exceed the company's profits while remaining collectible over five years - though Mulligan questions whether corporate shell games might ultimately prevent full payment.
The episode also examines a sobering reality about Canada's "not criminally responsible" verdicts. A man found NCR in 2012 for criminal harassment and uttering threats - offences that typically wouldn't result in lengthy prison terms - has now spent twelve years under involuntary psychiatric detention. His case starkly illustrates how NCR findings can lead to indefinite confinement rather than the "get out of jail free card" commonly assumed by the public.
Closing with an analysis of British Columbia's proposed Economic Stabilization Act, Mulligan warns about delegating sweeping regulatory powers that bypass legislative debate. The bill would allow the government to rapidly impose tolls, fees, and restrictions through regulation alone - potentially creating chaotic policy shifts similar to what we've seen with international tariffs. While quick responses to economic challenges are appealing, Mulligan cautions that such broad authority demands careful consideration: "We should slow down... if you grant sweeping powers to do things which could seriously impact people's lives and livelihoods, sometimes you're going to cause serious harm."
Note: Legally Speaking With Michael Mulligan is now live on CFAX 1070 at 12:30 pm rather than 10:30 am every Thursday.
Follow this link for a transcript of the show and links to the cases discussed.
Time for our regularly scheduled albeit two hours later than normal because the show is two hours later than normal segment with Michael Mulligan from Mulligan Defence Lawyers. It's Legally Speaking here on CFAX 1070. Good afternoon, Michael. How are we doing?
Michael Mulligan:Hey, good afternoon. I'm doing great, always good to be here at a slightly different time.
Adam Stirling:Absolutely Some interesting items on the agenda today. I'm looking at the first one. It says Sentencing a company for selling a natural health product that contained does that say prescription sexual dysfunction medication? What's going on?
Michael Mulligan:Apparently a lucrative enterprise. So this is interesting for a number of reasons. First of all, it was a prosecution of a corporation like a collection of four stores over in Vancouver. A corporation like a collection of four stores over in Vancouver. It was a entity, mfh International Enterprises Incorporated, which doesn't really shed a whole lot of light on what that might be, but it's described as a company that sold adult products, so you can probably figure out what that might entail. Indeed here, the four stores are located in Burnaby, richmond and Vancouver. They all sell adult entertainment products.
Michael Mulligan:Now, the particular things here were being sold and marketed under two different names, one called Harmony and the other called Passion Femme, and they were both described as natural health products and they were purported to be a natural, herbal alternative to other things like erectile dysfunction medication, like erectile dysfunction medication and the product described as Harmony. The background of that was that this company had apparently bought it in bulk like a big pile of powder and then hired another company to turn it or put it into pill format and then was selling it in these stores, describing them as natural products. Now we do have in Canada a Food and Drug Act and under that one of the things that is supposed to be done is to get approval from Health Canada before you're selling things like drugs or supplements or various other bits and pieces, but they have different regimes and requirements If somebody is selling something which contains quote natural things as opposed to things which may have other chemicals in them. Now I should pause for a moment here to say not everything that's natural is necessarily good for you. You know, arsenic is naturally occurring. You probably don't want a lot of that in your pills, but this particular case it wasn't arsenic.
Michael Mulligan:What happened is, as result of some sort of a report, health Canada decided to conduct an undercover operation. I'm not sure how much Health Canada is doing undercover operations, but in this case, undercover operations. But in this case they had an employee go in an undercover way to one of these adult product stores and purchase some of this Harmony. They were sold out, in fact, when the person got there, so they had to order it on backorder. But they came and got it and it was like $130, some odd dollars for 10 pills. And they analyzed the pills and it turned out that the pills contained I think it's Cialis, the active ingredient in an erectile dysfunction medication, and, troublingly, three times the amount that would be in a pill of that Cialis medication, of that Cialis medication. And the other product, the Passion Femme, which was being promoted as a product for women, had actually been previously identified by Health Canada as containing the active ingredient in a different erecta viagra, and it had been pulled from the market, but they were still selling it, and so this resulted in a prosecution, interestingly, of the corporation. Now you can prosecute companies for things, and that's what they were doing here.
Michael Mulligan:The person who showed up to represent the company was the person, the operating mind. He managed it, ran it, although the company and its only director was his wife, who had nothing to do with the company's operation at all, apparently other than being the owner and the director of it. And the case turned on. Ultimately there's a trial whether the Crown was able to prove knowledge of this company about what it was that they were selling, right. Did they know that they were selling things which, in the languages, was reckless as to whether it could cause a serious risk of injury to human health? And there was no direct evidence of that.
Michael Mulligan:The fellow who's the operating mind denied it. He claimed that some other person with the same last name but a different first name, gary, by the way. He claimed that this Gary person was the one who got this stuff certified. He didn't know anything about it being a problem. He was just buying it from this reputable Gary fellow and had it put into pill format and he was none the wiser. How could he possibly know what was in the pills? The judge rejected that resoundingly, and one of the interesting pieces of evidence that was pointed to was just exactly how much he was selling these pills for. The 10 pills sold for $139.99.
Michael Mulligan:And, as the judge astutely pointed out, various other quote natural health products which are sold for the purpose of, you know, helping sexual function, sold for a fraction of that, and so part of the evidence there was the fact that you're selling it for like 10 times or more than what things that just contain various herbal ingredients sell for was an indication of an awareness that there's something more in this than herbal ingredients. Now, I should say, interestingly, the judge does point out some of the common herbal ingredients that are in quote natural, close quote products that are intended to help with sexual function. Some of those products natural products include things named well, some of them you might be familiar with, like ginseng, but there are other ones, including things. One is horny goat weed and another herb called tomcat. I'm not sure how much horny goatweed somebody should be eating or whether eating something called tomcat would necessarily be a great idea. But there was something clearly more here, because of how much it stood for, and boy did they sell briskly. They sold a lot of it and Ultimately the judge convicted the corporation of knowingly, recklessly endangering people, although not guilty of knowingly causing serious harm.
Michael Mulligan:There was some doubt about, at least in the judge's mind, about whether there was knowledge of the specific risk that is run by these products, knowledge of the specific risk that is run by these products. And the concern would be here, and there was expert evidence about this from a fellow who was named, unfortunately, dr Ho, which I don't know if anyone is familiar with TV ads and products for medical purposes might be familiar with the Dr Ho machine, but apparently no relation Interesting. So a different.
Adam Stirling:Dr, Ho.
Michael Mulligan:Okay, a completely different. Dr Ho testified for the Crown and there was evidence that, in fact, these drugs could be seriously harmful. For example, if somebody had, like, a cardiac condition, you probably shouldn't be taking a triple dose of Viagra, for example. And of course, people buying these things, even though they seem very keen on buying them for a lot of money, would not necessarily know what was in them. They couldn't make an informed judgment about what they were taking and, at least for some people, there could be a serious risk of harm. So there's a conviction, which then leads to the question of well, what's the punishment? You're not putting a company in jail.
Michael Mulligan:It's ultimately a piece of paper. And so what do you do with this? And the Crown sought a fine along with a period of probation for the company. Now again, the company's not reporting to the probation officer, but it would put some restrictions on what the company could do, and the judge ultimately did that. The judge ultimately imposed a very significant fine, and the way the judge calculated it was looking at like the amount of profit that was made by the company and to make sure that you'd have deterrence for other people in the future, you'd want to have a quantum of a fine which is enough. That is more than the money you could make by selling mislabeled products to people. Weighed against, that the judge had to take into account this wasn't a big company. They only had four stores, and if you fined it too much you would just put the thing out of business potentially. And so the judge imposed a fine of on some of the accounts, $800,000. On another account, $50,000. On some of the counts, $800,000,. On another count, $50,000, and then provided that the fine be payable over a period of five years. And so one of the things we'll have to wait and see is whether the fine gets collected. The judge also ordered that a sign be put up giving notice to anyone who might come back to the stores about what was in these pills. But we'll have to wait and see whether the fine becomes collectible.
Michael Mulligan:One of the things I recall from early in my career involved I started out to very early days with the Department of Justice over in Vancouver and one of the things that they would prosecute they would have like undercover operations for stores selling cigarettes and they would literally send in underage kids to small corner stores to see if they could buy one loose cigarette which you can't sell and certainly shouldn't sell a loose cigarette to kids and then they would prosecute them on some occasions. Be you know, abc Corner Store Inc would suddenly go out of business and be replaced with DEF Corner Store Inc. That happens to be owned by the wife of the person who was previously prosecuted, and so it looks very similar to the other store. Yeah, that's right, and so I don't know whether we're going to see the $800,000 from MFH or whether it will turn into some other slight variation of that also owned by the person's wife, although they seem to vigorously defend it. One of the reasons why the store had made less money than it had been is they spent $250,000 on legal fees defending this case.
Michael Mulligan:That went on for, I think, 14 days, and so it was vigorously defended, and so maybe there are some assets there that could be collected upon, or maybe there's just really good, you know, goodwill from all these people that were buying this dysfunction medication marketed as an herbal supplement, but at least it was detected, and I guess the takeaway I got from all of this and reading all of this and this decision, was be very careful in terms of what you're relying upon.
Michael Mulligan:When you have representations made about things being natural or what's in them or having them approved by Health Canada, that may or may not be accurate. The information that's provided to Health Canada may or may not be accurate, and even at the end of the day, if it turns out that you know there wasn't some drug slipped into the pills, you know you've got to think very carefully about how much horny goat weed or tomcat you want to be eating, and so I guess, at the end of the day, in addition to being interesting in terms of the prosecution, what was there, I do think the case is a little bit of a cautionary tale for people that might be thinking oh yes, it says it's an herbal remedy. That must be fine. It may be, but unless there was real diligence and testing and so on that occurred, like in this case, you may be eating things that don't live up to the sign on the wall or what's printed on the package. So that's the latest on the prosecution for dysfunction medication not quite so herbal.
Adam Stirling:Michael Mulligan with Mulligan Defense Lawyers. Legally Speaking will continue right after this. Legally Speaking continues on CFAX 1070 with Michael Mulligan, barrister and solicitor. With Mulligan Defence Lawyers. Michael, a topic you and I have discussed in various forms at great length over the years the phenomenon of involuntary care and a person being found not criminally responsible due to a mental disorder, and why the public's perception of that is not always in alignment with the reality and this is a fascinating case of a man who's been in care am I reading this correctly since 2012?.
Michael Mulligan:the public's perception of that is not always in alignment with the reality and this is a fascinating case of a man who's been in care am I reading this correctly since 2012? That's right, and you're exactly right in terms of that perception. Right, that concept of not criminally responsible as a result of a mental disorder is something which we have in Canadian law. Right, if you have a person who can't understand the sort of nature or quality of what they're doing, or whether they can't determine that it's wrong. You know, if a person thinks they're fighting off a dragon, when they're, you know, hitting somebody, we don't convict them of a crime and put them in prison, but they can be subject to orders under the you can be subject to involuntary and indefinite detention in a hospital, and so this is a case from 2012, which was a man who was charged with two counts of criminal harassment and uttering threats, and so, of course, neither of those are good things to be doing, but they are not, except in the most extreme circumstances, going to wind you up in prison for decades. You know, it's the sort of thing and this man who was found not criminally responsible as a result of a mental disorder for those offenses all the way back in 2012, and he remains subject to control and involuntary incarceration, and the reason for that is that once somebody is determined to be not criminally responsible as a mental, as a result of a mental disorder, they then are going to be subject to either conditions or, in some cases, a requirement to be just detained in a forensic hospital, or, in some cases, a requirement to be just detained in a forensic hospital unless a review board determines that they don't pose a significant risk to public safety. And if they're not satisfied of that, you never get out. And so this particular man is described as suffering from a severe psychoaffective disorder which is resistant to treatment, combined with and this is all too common a substance use disorder. This would describe many of the people who are living on the street using fentanyl. It's a combination of mental health and drug use, some effort to treat themselves or whatever that makes it just so much worse and so much harder to get to the bottom of.
Michael Mulligan:This man is described as continuing to have, as of 2024, bizarre, delusional beliefs, no insight into his mental illness and a belief that anti-psychotic medication was hurting him. And so, as a result of that state of affairs, probably understandably and this wasn't, I don't think, really challenged in a meaningful way the review board concluded that he was still posed a significant threat to public safety, and so he, this man, has been sort of fighting and appealing review board decisions all the way back from 2012. And the latest was went to the Court of Appeal, and the Court of Appeal found no review board did exactly what they should be doing. There's nothing pointed to here as to why that decision was in error, and so they upheld it, and so I think the reason why it was worth pointing out is when people hear about those decisions and there's a recent one on the island involving a man who was found not criminally responsible as a result of a mental disorder who killed his mother right, yeah, certainly, in cases like that, the alternative would have been, you know, potentially life in prison, right, yes, but you also can have people found not criminally responsible for much less serious offenses, like criminal harassment or threatening somebody, and the actual result for them, if the review board is not persuaded that public safety can be adequately addressed, is again, effectively, life not in prison, but life in a secure forensic psychiatric hospital, and that's what this man has discovered, and so people should be aware of that. When you see that kind of decision, it is not a decision. That means go ahead or some kind of a free pass. It means potentially you're going nowhere unless there's a determination made that you don't pose a risk to the public. I also thought it might be worth calling a bit of an audible here.
Michael Mulligan:I was reading during the break, starting to read that Bill 7 that was being discussed previously, that Economic Stabilization, terror Response Act and just what that permits, and it's very broad, which I think is in keeping with some of the concerns you expressed about it. Right, it has several categories of things that the government would be able to make regulations about. Right, and a regulation is just a law that doesn't get passed through the legislature. It becomes law by the Lieutenant Governor and Council, and so one of the categories here is designed to or intended to remove barriers for the sale of goods and services from other provinces. That, to the extent that it's doing that, I don't think is going to be a grave concern. It has to do with things like, you know, packaging requirements and what can be sold in British Columbia, and so you can imagine regulations under that heading doing things like that. You know saying, okay, well, fine, you can sell your fill-in-the-blank product here without the. You know, whatever the BC requirement might ordinarily be, that would amount effectively to a trade barrier, right? And that's often how those things play out, right? You create a requirement in Quebec that the French labeling be larger than English labeling, and suddenly you can't import anything there without a new label, and that just means it's not happening, right. And so that's that part of it.
Michael Mulligan:One of the provisions here, though, that is extremely broad it's in part three of the bill is one that provides very sweeping powers to impose tolls, fees, fines and so on with respect to the use of things in British Columbia, and it's very broad.
Michael Mulligan:It would include, it seems, to contemplate fees, fines and so on being put on vehicles or other things of that sort, and there was some talk about that in terms of the government contemplating trying to charge fees to commercial vehicles that wanted to get to Alaska for driving through British Columbia, and so it would appear that this piece of legislation, if passed, would allow those kinds of things to be done by regulation, and so I guess.
Michael Mulligan:A few comments about that. First of all, that's certainly fast, right. On the other hand, you're not going to have the sort of debate that would ordinarily accompany that, if you wish to add some new effectively tax to something. And so you know, people could agree or disagree about whether it's a good idea to try taxing trucks to try to get onto the Alaska Highway which, frankly, the Americans built, whether that's a good idea or not, or what the response to that might be, but it would seem to me wise that there be at least a debate about that. Right, you know the it's not. You see, in the Trump tariffs are coming on the sort of you know chaotic nature of things that can be done when they can be done effectively by fiat.
Adam Stirling:Yes.
Michael Mulligan:As opposed to being done by passive legislation. You would not see tariffs are on, tariffs are off, tariffs are doubled, tariffs are in half. That would not happen if they were being imposed by legislative action. You would have consideration being given, debate about it, and so on. And so, while I understand the desire for speed, it does seem to me that there is lots of merit in the idea of having actual debate about some of these things and slowing down just a little bit.
Michael Mulligan:And when you look at what kind of powers this would delegate, the language that they used is extremely broad, you know.
Michael Mulligan:It allows, for example, sort of regulation about things like, you know, ownership or registration of vehicles, what kind of vehicle somebody might be able to own, what you might be able to do with it, can you drive it on the road, you know, and who could own something, or fees that might be attached to owning or using something.
Michael Mulligan:And so you know, we can all imagine good or sensible things you might do with very, very broad powers like that.
Michael Mulligan:But on the other hand, you do see examples of government doing things which in retrospect you may think that seemed a little extreme. And this is very broad, and so I think we ought to be very careful before we delegate a power that you hope would be used well, but, as we're seeing, for example, with exactly what Trump is doing, can be used capriciously or in a way that causes serious harm, and so my counsel would be we should slow down and, while governments like to talk tough and be able to say things for political and other reasons, some of these decisions are important and large, and if you grant sweeping powers to do things which could seriously impact people's lives and livelihoods, sometimes you're going to cause serious harm, and so I would urge people to think carefully about this, know that this is extremely broad and, if this is passed, you're delegating authority which could be used in a capricious or harmful way. Hopefully it isn't, but that's what this legislation would purport to do.
Adam Stirling:Michael Mulligan, with Mulligan Defence Lawyers, legally speaking during the second half of our second hour every Thursday. Michael, thank you so much. Pleasure as always, Thanks.