Troubled Usana faces new stock woes

Usana Health Sciences, a US-based vitamin company with thousands of distributors in New Zealand, received a warning this week that it could be delisted  from the US stock market.

Usana – which has been the subject of a recent NBR investigative series  – filed an unaudited quarterly report with the Nasdaq last week after the company’s auditor suddenly quit. Nasdaq rules require quarterly reports to include an independent auditor’s review. Usana’s failure to get one prompted the warning letter.

Usana says it is looking for a new auditor and has asked for a hearing with the Nasdaq listing qualifications panel. Usana’s securities can remain listed until that panel makes a ruling on the case.

Meanwhile, NBR has received a letter from Ladd McNamara, a former member of Usana’s medical advisory board, concerning a statement NBR made about Mr McNamara in a July 13 article . 

The article stated that Mr McNamara resigned from Usana’s medical advisory board after it was revealed that he was “falsely claiming to have a medical license after it had been revoked in two states.”

In his letter to NBR, Mr McNamara admits that his two state medical licenses were revoked but writes that one of them was valid “the entire time I served on Usana’s medical advisory board.”

NBR asked Usana about the timing of Mr McNamara’s resignation from its medical advisory board. The company declined to comment.

In his letter to NBR, Mr McNamara also writes “I NEVER falsely claimed to have a medical license!”

But the State Medical Board of Ohio charged Mr McNamara with making “false, fraudulent, deceptive or misleading statements in relation to the practice of medicine or in securing a certificate to practice” when it revoked his license in May, according to Joan Wehrle, executive staff coordinator of the board.

Ms Wehrle said Mr McNamara was required to tell the Ohio medical board that he had surrendered his license in Georgia when he renewed his license in Ohio in 2006. Instead, Ohio learned that information elsewhere.

Mr McNamara also states that he surrendered his Georgia medical license “for a minor offense,” which Usana spokesman Joe Poulos has earlier described as “prescribing medication to a family member.”

“Oh, I wouldn’t exactly buy that one,” said Dr Jim McNatt, medical director at the Georgia State Board of Medical Examiners. Dr McNatt said the medical board could not publicly release the charge against Ladd McNamara but “it would have to be more than that,” especially since Georgia doesn’t even have a prohibition on doctors prescribing medication to family members.

Finally, Mr McNamara wrote NBR that he “will always be a doctor, whether licensed or not.”

But according to Candis Cohen of the State Medical Board of California, where Mr McNamara currently lives, “He is so wrong…As long as he’s living here he can’t call himself ‘MD’ or ‘doctor’ or ‘physician’ unless he has a California medical license.”

Ms Cohen referred to section 2054 of California’s business and professions code, which Mr McNamara appears to have violated when he advertised himself as a “board-certified medical doctor” in flyers  for a number of Usana speaking engagements in California in July. [ click here to view sample flyer, PDF ]