Four Indicted in BALCO Drug Scandal -- February 13, 2004
By Phillip Whitten
SAN FRANCISCO, February 13. FOUR San Francisco Bay Area men were indicted yesterday by a San Francisco federal grand jury, charged with producing and selling illegal steroids to dozens of professional and world-class athletes and then laundering the proceeds.
* Victor Conte, 53, president and CEO of Bay Area Laboratory Cooperative (BALCO); James J. Valente, 49, BALCO Vice-President; Greg F. Anderson, 37, personal trainer for San Francisco Giants baseball player Barry Bonds; and track coach Remi Korchemny, 71.
The men were accused in a 42-count indictment handed down by the grand jury, which has heard evidence in the case since late October.
No athletes were named in the indictment but Bonds, swimmer Amy Van Dyken and track stars Marion Jones and Tim Montgomery were among those who testified before the US grand jury. More names could be revealed in a trial.
That's precisely what United States Anti-Doping Agency (USADA) chief executive Terry Madden warned would happen in a statement issued yesterday after the indictment was announced by US Attorney General John Ashcroft.
"We fully expect that developments in the US Attorney's proceedings and our ongoing investigation will lead to the initiation of more doping cases against athletes and others," Madden said.
USADA named Conte as the developer of THG. Conte has denied the accusation but the charges back Madden's comments, lending weight to his prediction of future charges against athletes.
"USADA has been and will continue to be involved in this situation," he said in the statement.
"We are confident that the work done by the US Attorney's Office will be of immeasurable help in forwarding USADA's objectives of removing drug cheats from sport and protecting the health of athletes and those children who aspire to participate in clean sport. We will ensure the integrity and spirit of sport."
At a news conference in Washington, D.C., yesterday US Attorney General John Ashcroft said: "Nothing does more to diminish our potential -- both as individuals and as a nation -- than illegal drug abuse," he said. "The tragedy of so-called performance-enhancing drugs is that they foster the lie that excellence can be bought rather than earned and that physical potential is an asset to be exploited rather than a gift to be nurtured."
Conte's attorney, Troy Ellerman, said he'll comment on the charges today following the four defendants' first court appearance before U.S. Magistrate Judge Maria-Elena James of San Francisco.
The four defendants are charged with crimes including conspiracy to distribute, and possess with intent to distribute, anabolic steroids; anabolic steroid possession with intent to distribute; conspiracy to defraud the United States with misbranded drugs; and delivering misbranded drugs. Conte, Valente and Anderson also face counts of money laundering and possession of human growth hormone with intent to distribute.
If convicted, their maximum sentences taken consecutively could amount to decades in prison and millions of dollars in fines, although federal sentencing guidelines would lead to less severe punishments.
A search-warrant affidavit filed by an IRS Criminal Investigation Division agent outlines a complex investigation that began in August 2002 with tips that Conte was peddling steroids. Along the way, surveillance agents said they saw athletes coming and going from BALCO's office and pored over reams of e-mail and bank records from BALCO and those who did business with it. They not only picked through the company's trash, but even subpoenaed its medical waste from a San Leandro recycling firm.
What emerged, prosecutors say, is a pattern of behavior in which the four men alleegdly sold the illegal muscle-building drugs; and allegedly misbranded, or failed to correctly label, and sold THG.
All athletes' names have been removed from the affidavit, although the documents note the government can provide a judge more details if required.
Prosecutors say the defendants distributed THG as a liquid called "The Clear," recommending it to athletes as having steroid-like effects without being detectable. They allegedly sold an illegal testosterone-based cream containing epitestosterone, a naturally-occurring substance that masks steroid use from detection in urine tests.
(A similar cream was used by Chinese swimmers in 1994, until a surprise drug test by FINA officials given as the team arrived in Japan for the 1994 Asian Games, resulted in [at least] seven positive tests.)
The defendants also allegedly sold human growth hormone and other substances to athletes without the required prescriptions. They're accused of hiding their activities by using false names on mailing labels; using abbreviations and codes to refer to the drugs in their correspondence; and providing athletes with false cover stories to give to authorities.
Conte allegedly struck deals with some athletes in which they'd endorse one of his legal nutritional supplements in return for free drugs. No such athletes are specifically named in the court documents, but Bonds, Oakland Raiders linebacker Bill Romanowski and several Olympians have appeared in public or in photographs wearing caps touting ZMA -- BALCO's zinc-magnesium supplement -- or have given testimonials on how it has helped their careers.
Finally, Conte, Valente and Anderson allegedly kept the proceeds of these illegal steroid sales separate from BALCO's licit business, and used a third party to negotiate checks written as payment for anabolic steroids.