Physician Claiming to Have COVID-19 Cures Face Federal Criminal Charges for Fraud Among other Charges

Physician Claiming to Have COVID-19 Cures Face Federal Criminal Charges for Fraud Among other Charges

This month, the Department of Justice (DOJ) reported that a California-based physician was indicted by a federal grand jury for packaging, marketing and selling “COVID-19″ treatment kits, which he touted as a “miracle cure.” A 44-year old licensed physician in Southern California and formerly a manager of “Skinny Beach Med Spas” in the San Diego area, Dr. Jennings Ryan Staley had already been in trouble with the law with one count of mail fraud. Now with a federal grand jury indictment, (Number 20cr1227-GPC) the doctor faces new charges as he partnered with a Chinese supplier of hydroxychloroquine powder to smuggle into the country, lying to the U.S. Customers along the way (e.g. mislabeling the shipment as a “yam extract”). The physician, apparently living on the criminal edge if these charges are accurate (and they probably are), actually is charged with usurping the name of one of his employees to create and submit a bogus prescription for the drug on the employee’s behalf, in order to sell the drugs at outrageous markup prices of course. He is charged with a number of crimes and even attempted to solicit investment funds with promises of repayment within 90 days. Physicians that break laws pay the price doled out by criminal statute, and in this case, multiple ones apply. Of course, this individual hasn’t been proven guilty yet but the facts don’t look like they are in his favor.  Those medical professionals, and anyone else for that matter, seeking to profit off of this pandemic should take notice.

The Charges are Very Serious

The federal prosecutors have lined up serous charges including Mail Fraud (Title 18 USC, Section 1341); Importation Contrary to Law (Title 18, USC, Section 545); other charges include False Statement (Title 18, USC, Section 1001); Aggravated Identity Theft (Title 18, USC Section 1028A). All of the charges also carry potential fines and special assessment.

Quacks & Shysters be on Notice

Apparently, this doctor was peddling the product targeting COVID-19 as early as late March or early April of this year, to his Skinny Beach customers. Positioning this bundled package as a “concierge medicine experience,” which included hydroxychloroquine, that the doctor told a customer/patient was a “guaranteed” cure for COVID-19.

Of course, this individual was seeking to profit off the fear, uncertainty and doubt of gullible patients as the doctor marked up and resold these packages at $3,995 for a family of four—based on a cost for the California doctor at $1 per tablet of hydroxychloroquine. According to the federal indictment, the doctor positioned the product and emphasized to recipients that they should, “NOT BELIEVE THE REPORTS THAT HYDROXYCHLOROQUINE DOESN’T WORK!”

Undercover Operations Nets Evidence

It is reported that the U.S. Federal Bureau of Investigation (FBI) learned of this operation and figured out an easy way to tap into a scenario that could generate sufficient evidence: the doctors own greed. An undercover FBI agent contacted the doctor as a customer; the doctor promised that the drugs he was selling would cure COVID-19, according to the DOJ press release. In a DOJ charging document, Dr. Staley conveyed that hydroxychloroquine “cures the disease” and that it was “incredible,” like a “magic bullet” or an “amazing weapon.” 

Apparently, the undercover FBI agent asked the doctor if hydroxychloroquine and mefloquine (another antimalarial that the doctor suggested was part of a “Russian cure”) would be effective and cure COVID-19. The doctor quickly told the agent pretending to be a customer that it was absolutely “guaranteed” as a cure for COVID-19.

Serious Charges by Federal Authorities

The charging document outlines multiple ways that Staley obtained the hydroxychloroquine pills he resold as part of his treatment kits, including soliciting them from his acquaintances and employees with pre-existing hydroxychloroquine prescriptions, and writing prescriptions for immediate family members and acquaintances to get the drugs “by any means necessary.”  He even had plans to make his own tablets of hydroxychloroquine, using the mislabeled powder he planned to smuggle in from Chinese suppliers he found online.

Staley wrote one sham prescription, according to the superseding indictment, for a Skinny Beach employee. Staley had also asked the employee for a few tablets from her own hydroxychloroquine prescription, supposedly for another Skinny Beach staff member who was sick. Instead of borrowing a few of the employee’s tablets to help a suffering colleague as he had promised, however, Staley turned around and wrote a bogus prescription using her name, date of birth, and prior home address. Staley then took the sham prescription to multiple pharmacies to try to obtain hydroxychloroquine in the employee’s name, including by pretending to be her during the online ordering process. 

Federal Collaboration Nets Opportunist & Puts Others on Notice

Robert Brewer is a U.S. Attorney on this case and was recently praised, among other federal prosecutors along with agents from the FBI and U.S. Food and Drug Administration, Office of Criminal Investigators, for working collaboratively to track and pin the defendant, including Nicholas Pilchak and Jaclyn Stahl.

Robert Brewer is a U.S. Attorney on this case and recently stated for the DOJ press release: “People must be able to trust their doctors to offer honest medical advice instead of fraudulent sales pitch, especially during a global pandemic.” Brewer continued, “Medical professionals who lie about their treatments to profit from a desperate, fearful public will face criminal charges and serious consequences like any other lawbreaker.”

Meanwhile, FBI Special Agent in Charge Suzanne Turner put others on notice that, “The FBI has been vigilant in investigating anyone trying to capitalize on COVID-19 crisis.” This case was clearly made by exceptional investigation and police work undertaken by the FBI.

Lisa L. Malinowski, FDA Office of Criminal Investigations, Los Angeles Field Office, made it clear that any medical professionals that seek to profit from so-called ‘miracle cures’ to COVID-19 will get attention from federal law enforcement, noting, “We will continue to work with our law enforcement partners to bring to justice those who place profits above the public health.”

Recent Court Date

Staley was apparently to face U.S. District Judge Gonzalo P. Curiel just last week.    

Call to Action: For the press release, see the link. Physicians seeking to prey on the public during this pandemic will be severely dealt with. No one in a civil society should be exploiting a pandemic for personal gain.

Responses

  1. A great pity and an insult to all those doctors out there(good guys)who are saving thousands of lives forlitttle or no profit