The Department of Justice U.S. Attorney’s Office Southern District of California announced on December 3, 2020 that Dr. Jennings Ryan Staley (“Staley”), previously charged with one count of mail fraud, was indicted by a federal grand jury on December 3, 2020 for additional crimes arising from his business venture selling COVID-19 “treatment kits,” which he advertised to one potential customer as a “miracle cure.” Staley is a licensed physician and the former operator of Skinny Beach Med Spas in and around San Diego, California.
According to the new charges, Staley agreed with a Chinese supplier to smuggle hydroxychloroquine powder into the U.S., lying to U.S. Customs by mislabeling a shipment as “yam extract.” Staley is also charged with stealing the name and identifying information of one of his employees in order to create and submit a bogus prescription for hydroxychloroquine on the employee’s behalf, in order to sell the drugs at a markup to his customers.
In late March and early April 2020, Staley marketed and sold his treatment kits to Skinny Beach customers. He described his product as a “concierge medicine experience,” which included hydroxychloroquine—an anti-malarial drug that Staley described to one potential customer as a “guaranteed” cure for COVID-19. Staley’s kits were priced as high as $3,995 for a family of four, while Staley himself paid roughly $1 per tablet of hydroxychloroquine. Staley’s marketing materials, per the indictment, stressed that recipients should “NOT BELIEVE THE REPORTS THAT HYDROXYCHLOROQUINE DOESN’T WORK!”
During a phone call with a prospective customer, who was actually an undercover FBI agent, Staley repeatedly promised that the drugs he was selling would cure COVID-19. According to the charging document, Staley said hydroxychloroquine “cures the disease,” and that it was “incredible,” a “magic bullet,” and an “amazing weapon.” When the undercover agent asked if hydroxychloroquine and mefloquine—another anti-malarial that Staley described as “the Russian cure”—would effectively cure someone infected with COVID-19, Staley replied, “One hundred percent. One hundred percent.”
One week later, when interviewed by FBI agents, the indictment alleges that Staley falsely denied ever saying that the Skinny Beach treatment packages were a “one hundred percent effective cure.”
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 preexisting 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.
The superseding indictment also charges Staley with an importation crime, based on his agreement with a Chinese supplier to lie to U.S. Customs about a shipment that Staley believed contained 12 kilograms of hydroxychloroquine powder. As alleged, when the supplier volunteered to “change the product name to export” in order to get the product through U.S. Customs by “replac[ing] hydroxychloroquine export with yam extract,” Staley replied “Excellent,” and then suggested the same mislabeling technique himself to another potential supplier.
If you or a loved one may be the victim of COVID-19 fraud in the United States, you should promptly contact a COVID-19 fraud lawyer in your state who may investigate your COVID-19 fraud claim for you and represent you and/or your loved one in a COVID-19 fraud case, if appropriate.
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