Health Canada is reviewing products made by a B.C.-based natural-health company named earlier this year as one of the players in an alleged $65-million (U.S.) fraud under investigation by the B.C. Securities Commission.

The commission issued a notice in January that alleged Pegasus Pharmaceuticals Group Inc. defrauded investors by selling millions of dollars' worth of bonds for projects in the Republic of Georgia and China, but used most of that money to pay earlier investors or cover costs unrelated to those projects.

The fraud allegations, which have not been proven, prompted Health Canada to launch its own review of Pegasus and its website, which includes claims that Pegasus products were safe and effective cancer treatments.

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Health Canada says it has not authorized any of Pegasus's products as treatments for cancer.

The review is focused on whether the company's advertisements conform to Health Canada legislation and regulations.

"Health Canada identified non-compliance on the Pegasus website related to the advertising of unauthorized claims, including claims for the treatment of a serious disease for the product Hemomex S … and advertising of unauthorized products Lipo-Aid, Careseng NutroPro Pak, Cardio Guard, and HemoMex 1 Dammarane Sapogenins Injection," Health Canada spokeswoman Maryse Durette said in an e-mail.

"Follow-up with the company is ongoing to confirm that there are no more unauthorized products being sold," she added.

Winter Huang, who the securities commission described as the "controlling mind" behind Pegasus Pharmaceuticals, is serving a prison sentence in China. Mr. Huang's Vancouver-based lawyer, Owais Ahmed, declined to comment

Pegasus's website claimed HemoMex S – which Health Canada has licensed as a supportive therapy for the promotion of healthy glucose levels – has been approved in Georgia as a prescription drug for cancer-therapy regimes.

The company's website also said HemoMex 1 had been tested in clinical trials at a cancer centre in Georgia that indicated "overall efficacy and safety of HemoMex 1 Dammarane Sapogenesis Injection … for cancer patients."

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As of Monday, there were 34 active listings for Pegasus products on Health Canada's Natural Health Products Database, including HemoMex S. The other unauthorized Pegagus products that Health Canada said had run afoul of advertising guidelines are not included in the database, although it does include several products under the Careseng brand.

The database includes products licensed under Canada's Natural Health Products Regulations, which came into effect in 2004 and cover products including vitamins and minerals, herbal remedies and homeopathic treatments.

On its website, Pegasus bills itself as a group of high-tech health-care companies involved in research and development, new drug development and clinical applications.

The B.C. Securities Commission alleges Pegasus and related entities defrauded investors by selling millions of dollars' worth of bonds, ostensibly for projects in the Republic of Georgia and in Dalian, China.

In its January notice of hearing, the commission alleged two B.C. residents – Mr. Huang and his sister Vicky Dancho – and two companies with which the pair were involved committed fraud and sold securities illegally.

The companies, Pegasus Pharmaceuticals and Careseng Cancer Institute, are incorporated in British Columbia.

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Mr. Huang was a director of Pegasus and Careseng, while Ms. Dancho was a director, chief executive officer and president of Careseng, the BCSC said.

As of late June, B.C. corporate records listed Pegasus Pharmaceuticals as "not in good standing." Careseng Cancer Institute was dissolved on April 20.

The Globe and Mail reported in February that Mr. Huang is serving a prison sentence in China on a fraud conviction in another case.

The B.C. Securities Commission hearing was adjourned on June 29.

A new hearing date has not yet been set.