October 31, 2017: South Korean Maker of Contact Lenses, Company CEO Charged with Smuggling Products into U.S. by Failing to Declare Full Value
United States Department of Justice Central District of California
Two Southland Retailers Also Charged with Illegally Selling Decorative Contact Lenses
LOS ANGELES – Geo Medical Co., Ltd., a contact lens manufacturer based in the Republic of Korea that claims to be the “leading brand of circle lenses,” has been charged in federal court with illegally bringing contact lenses into the United States by dramatically undervaluing shipments in documents submitted to customs officials.
An indictment returned on Friday by a federal grand jury charges the company and its chief executive officer with five counts of illegal entry of falsely classified goods. The indictment against Geo Medical and Hwasung Pak, the company’s president and CEO, alleges they sent to the United States shipments of contact lenses with values ranging from $6,200 to $71,815, but declared all five shipments to be worth less than $200. This undervaluing allegedly allowed them to avoid import duties, as well as inspection and seizure by the FDA.
In 2013, Geo Medical was placed on an FDA “Red List” that restricted imports of its products after samples of its contact lenses were found to be contaminated with microorganisms. The import alert authorized the FDA to automatically detain any Geo Medical contact lenses coming into the United States.
In two other cases filed on October 27, two corporations that operate retail outlets in Los Angeles and Orange counties were charged with selling “misbranded” contact lenses without the necessary prescriptions. The criminal informations filed by prosecutors charge I-Takashima, Inc. and TS Group, Inc., which operate cosmetics and gift stores under the Takashima name in Irvine and Rowland Heights, respectively. The decorative contact lenses allegedly illegally sold by Takashima were marketed as Halloween and beauty accessories under the brand name Deja-vu and were manufactured by Geo Medical.
Contact lenses – whether corrective, cosmetic or decorative – are prescription medical devices subject to United States Food and Drug Administration regulations. Due to the risk of injury, blindness and possible eye infection, all contact lenses require prescriptions from medical professionals who can provide guidance on the proper care and maintenance of the contact lenses.
The FDA regularly issues warnings concerning the use of decorative contact lenses, which have become popular during the Halloween season. The American Academy of Ophthalmology also cautions against the use of decorative contact (link is external) lenses and los lentes de contacto de color (link is external).
Indictments and criminal informations contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Geo Medical and Pak are charged with five felony offenses, each of which carries a statutory maximum penalty of two years in federal prison for the CEO and fines of up to $500,000 for the corporation.
I-Takashima and TS Group are each charged with one misdemeanor count of selling misbranded devices. This charge carries a maximum fine of $200,000 for the corporations.
I-Takashima has been summoned to appear for an arraignment in United States District Court in Santa Ana on November 27. TS Group, Geo Medical and Pak have been summoned to appear for arraignments in federal court in Los Angeles on November 30.
The ongoing investigation into the illegal importation and sale of contact lenses is being conducted by the FDA’s Office of Criminal Investigations
The three cases announced today are being prosecuted by Assistant United States Attorney Diana M. Kwok of the General Crimes Section.
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