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Law360 (December 3, 2020, 10:50 PM EST ) A San Diego Botox and hair-removal doctor accused of peddling fake $4,000 coronavirus "miracle cure" kits has been hit with new charges related to smuggling hydroxychloroquine, the U.S. Department of Justice said Thursday.
Dr. Jennings Ryan Staley, a 44-year-old physician and the operator of Skinny Beach Med Spa in San Diego, was charged in April with mail fraud after federal prosecutors said he started selling a bogus "miracle cure" for COVID-19. He now faces additional charges of lying to U.S. Customs and Border Protection and stealing the identity of one of his employees, according to a superseding indictment filed Wednesday.
Staley tried to obtain hydroxychloroquine, a malaria drug that has been investigated for treating COVID-19, "by any means necessary," according to the indictment. He allegedly worked with a Chinese supplier to smuggle a powdered version of the substance into the U.S. by mislabeling the shipment as "yam extract" to get it past customs. Moreover, the shipment actually contained 12 kilograms of baking soda, prosecutors said.
Prosecutors said Staley would also steal the identity of one of his employees to write bogus prescriptions for hydroxychloroquine and then sell it to his customers at a markup.
"People must be able to trust their doctors to offer honest medical advice instead of a fraudulent sales pitch, especially during a global pandemic," U.S. Attorney Robert Brewer said in a statement Thursday. "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."
Staley also tried to raise money for his COVID-19 cure venture by soliciting investments in the fake treatment, according to prosecutors. He allegedly told one potential investor that, if she contributed at least $25,000, he promised to "triple [her] money in 90 days," according to the DOJ.
Staley's attorney, Patrick M. Griffin of Griffin Law Office APC, told Law360 on Thursday that these are the same factual allegations "stretched to fit several distinct charges" with the only new allegation being aggravated identity theft. Griffin said that his client did not steal anyone's identity and that the employee mentioned in the indictment gave explicit permission and authorization for the prescriptions.
"The facts remain: the same executive branch that is prosecuting this case created a stream of misinformation and panic regarding these medications in late March, early April," Griffin said. "Our society is fractured -- half of the country operates in one factual universe while the other half operates in another."
At the time, Staley truly believed in the medication because of the "never-ending stream of promotion" for hydroxychloroquine, particularly by President Donald Trump. He said the only peer-reviewed study at the time found a 100% cure rate.
"Not only did the federal government create this problem but it also made it worse by contributing to the shortage of HCQ thereby forcing medical professionals to look overseas," Griffin said. "No medical professionals were able to procure these medications in April because the very same executive branch that is prosecuting Dr. Staley was buying up the supply."
Griffin said his client was not in control of the procurement from China but that a Chinese broker was the one who insisted on labeling the shipment "yam extract" because China had a temporary ban on exports to the U.S. He said the broker was just trying to scam people and never had any intention of shipping hydroxychloroquine to the U.S.
FBI agents began investigating Staley after receiving a tip from the public and used an undercover agent to try to buy the alleged fraudulent product from the doctor, who specializes in services such as hair removal, fat transfer and Botox.
In late March, Skinny Beach started sending out emails advertising "COVID-19 family resistance packs," described as a "concierge medicine experience" priced at just under $4,000 for a family of four, prosecutors said. The packs included access to Staley, hydroxychloroquine and "anti-anxiety treatments to help you avoid panic and help you sleep," among other things, prosecutors said.
An undercover FBI agent responded to Staley's email and engaged the doctor in a recorded phone call, in which Staley reportedly described the medication he was offering as "an amazing cure" and a "miracle cure" that would knock out COVID-19 "100%." Staley also said if someone without the disease takes the medication, "you're immune for at least six weeks," prosecutors said.
"The FDA continues its steadfast efforts to identify, investigate and bring to justice those who attempt to profit from the pandemic by offering American consumers so-called 'miracle cures' to treat COVID-19," Special Agent in Charge Lisa L. Malinowski of the U.S. Food and Drug Administration Office of Criminal Investigations said in a statement Thursday.
The government is represented by Jaclyn B. Stahl and Nicholas W. Pilchak of the U.S. Attorney's Office for the Southern District of California.
Staley is represented by Patrick M. Griffin of Griffin Law Office APC.
The case is U.S. v. Jennings Ryan Staley, case number 3:20-cr-01227, in the U.S. District Court for the Southern District of California.
--Editing by Breda Lund.
For a reprint of this article, please contact reprints@law360.com.
