July 6, 2018: Internet Business Owner Pleads Guilty to Selling $2.3 Million Worth of Non-FDA Approved and Misbranded Botox and Juvederm-Related Products
|
Food and Drug Administration
|
|
U.S. Department of Justice Press Release
|
|---|
|
For Immediate Release |
United States Department of Justice District of Nevada |
|---|
LAS VEGAS, Nev. – The owner and operator of numerous beauty product websites pleaded guilty today to selling $2.3 million in non-FDA approved and misbranded drugs and medical devices, announced U.S. Attorney Dayle Elieson for the District of Nevada and announced U.S. Attorney Dayle Elieson for the District of Nevada and Special Agent in Charge William P. Conway of the U.S. Food & Drug Administration (FDA) Office of Criminal Investigations’ Chicago Field Office.
Kelly Luanne Schaible, aka Kelly Reed and Heather Lane, 56, previously of Henderson, Nevada, pleaded guilty before U.S. District Judge Andrew P. Gordon to one count of wire fraud and one count of introduction of misbranded medical devices in interstate commerce.
According to court documents, from 2009 to at least 2014, Schaible owned and operated AAE d/b/a Basics, Inc.; Basics, Inc.; and Basics Inc., Ltd. The companies’ websites sold various beauty products related to weight loss, hair loss, skin care, eyelashes, and wrinkle reduction. She operated the websites from Illinois, then from various homes she occupied in Henderson.
In admissions made in her plea agreement, Schaible knowingly marketed, sold, and distributed non-FDA approved prescription drugs containing Botulinum Toxin Type A, also known as Botox, and non-FDA approved prescription devices containing hyaluronic acid, also known as Juvederm related products. She obtained these products from distributors in China.
She further admitted that she made various misrepresentations on the websites that lead customers to believe the fake Botox and Juvederm products offered for sale were safe and could be administered without a prescription. She did not require customers to provide a valid prescription prior to purchase and the products were not properly labeled as required by federal law. Schaible sold approximately 9,500 units of misbranded prescription drugs containing Botulinum and received approximately $1.7 million in sales revenue. She also sold approximately 4,000 units of misbranded Juvederm products and received approximately $630,000 in sales revenue.
Furthermore, on July 1, 2012, Schaible made an online sale of misbranded products to a customer in Pennsylvania. The products did not have proper labeling providing adequate directions for use as required by federal law. She mailed the products from Henderson to Dresher, Pennsylvania using the U.S. Postal Service.
Sentencing is scheduled for October 25, 2018. The maximum statutory penalty for wire fraud is up to 20 years in prison and a $250,000 fine and the maximum statutory penalty for introducing misbranded devices into interstate commerce is three years in prison and a $10,000 fine.
The case was investigated by the FDA-Office of Criminal Investigations. Assistant U.S. Attorney Carla Baldwin Carry is prosecuting the case.
If you find a website that may be illegally selling medical products and devices, dietary supplements or cosmetics over the internet, make a report to the FDA by calling 1-866-300-4374 or at https://www.fda.gov/Safety/ReportaProblem/ucm059315.htm.
###
Topic(s):
Consumer Protection
Financial Fraud
Component(s):