LAS VEGAS, Nev. – The owner and operator of numerous beauty product websites was arrested and charged in a 25-count indictment for selling misbranded drugs and misbranded medical devices, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and Special Agent in Charge William Conway for the FDA Office of Criminal Investigations’ Chicago Field Office.
“The Nevada U.S. Attorney’s Office is committed to protecting consumers and ensuring that products being sold at stores and online in the United States are safe and in accordance with federal law,” said U.S. Attorney Bogden. “We will continue to work with the FDA to ensure the publics’ health is not compromised.”
"U.S. consumers rely on the FDA to ensure that the medical products they use are safe and effective," said Special Agent in Charge Conway. "Our office will continue to pursue and bring to justice those who attempt to introduce illegal products into the U.S. marketplace."
Kelly Luanne Schaible, aka Kelly Reed, aka Heather Lane, 55, of Henderson, Nev., was charged with nine-counts of wire fraud, six-counts of mail fraud, four-counts of introduction of misbranded drugs into interstate commerce, five-counts of introduction of misbranded medical devices into interstate commerce, and one-count of destruction of evidence. Trial is scheduled for May 8, 2017.
According to the indictment, from 2009 to 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.
The indictment alleges that 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. Schaible obtained these products from distributors in China and knew it was illegal to import such products into the United States. She made various representations that were intended to lead customers to believe that the products and devices she sold were equivalent to genuine Botox and Juvederm and that a customer could administer the products in a “do it yourself” fashion without a prescription. She mislabeled the products and shipped the misbranded drugs to customers throughout the United States and to other countries. 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.
The indictment further alleges that after a search and seizure by FDA Special Agents, Schaible attempted to destroy a plastic bag containing vials of Botulinum for the purpose of preventing and impairing the investigation.
The maximum statutory penalty for wire fraud and mail fraud is up to 20 years in prison and a $250,000 fine; the maximum statutory penalty for introducing misbranded drugs and misbranded devices into interstate commerce is three years in prison and a $10,000 fine; and the maximum statutory penalty for destruction of evidence is five years in prison and a $250,000 fine.
The case is being investigated by the Food and Drug Administration-Office of Criminal Investigations; and prosecuted by Assistant U.S. Attorney Carla B. Higginbotham.
The public is reminded that an indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty in a court of law.