San Diego Doc Sold Fake COVID-19 'Miracle Cure,' Feds Say

By Lauren Berg
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Law360 (April 17, 2020, 10:59 PM EDT) -- A San Diego Botox and hair removal doctor has been touting fake $4,000 coronavirus "miracle cure" kits he claims will cure the deadly illness "100%" and render customers immune for at least six weeks, 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, faces a charge of mail fraud after federal prosecutors with the U.S. Attorney's Office for the Southern District of California said he started selling a fake cure for COVID-19, which has killed more than 33,000 in the United States.

To date, there has been no treatment or cure for the virus approved by the U.S. Food and Drug Administration.

"We will not tolerate COVID-19 fraudsters who try to profit and take advantage of the pandemic fear to cheat, steal and harm others," U.S. Attorney Robert S. Brewer said in a statement Thursday. "Rest assured: those who engage in this despicable conduct will find themselves in the crosshairs of federal prosecutors."

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, prosecutors said 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. The packs included access to Staley, the anti-malarial medication hydroxychloroquine and "anti-anxiety treatments to help you avoid panic and help you sleep," among other things, prosecutors said.

Prosecutors said Staley offered customers Xanax (alprazolam), a Schedule IV controlled substance, and shipped the drug without conducting medical examinations.

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.

"Staley referred to the medication he offered as a 'magic bullet,'" according to the criminal complaint.

"It's preventative and curative," Staley also said, according to the complaint. "It's hard to believe, it's almost too good to be true. But it's a remarkable clinical phenomenon."

Staley also bragged to the undercover agent that he had a broker who was smuggling the anti-malarial drug out of China to make his own pills and concealed the shipment from customs authorities by describing it as "sweet potato extract," according to prosecutors.

When Staley was interviewed just a week later by the FBI as part of the investigation, he told agents he never told customers that the treatment was a 100% effective cure for COVID-19. He told agents "that would be foolish" and that it was "not definitive" that the medication he sold actually cures the illness.

Investigators also found shipping records that confirmed Staley was importing a shipment of "yam extract," according to the complaint.

On April 9, the FBI received a package containing medications requested by the undercover agent from Staley, prosecutors said. The package contained generic Xanax and Viagra in bottles, hydroxychloroquine in small brown envelopes and chloroquine in small, clear plastic bags, along with a "fact sheet" and some Skinny Beach business cards, according to the complaint.

"The sale of false cures, especially by a medical professional, will be vigorously investigated by the FBI," Omer Meisel, the acting special agent in charge of the FBI's San Diego field office, said in a statement Thursday. "The FBI is using a variety of tools to identify anyone who exploits the current crisis with fraudulent scams or a variety of cyber schemes — and is proactively warning the public about products claiming to save lives, before losing their money or creating false hope."

Contact information for Staley was not immediately available.

Federal prosecutors have had their hands full lately with alleged coronavirus scams and schemes.

On April 1, prosecutors with the U.S. attorney's office in Los Angeles said a British man tried to ship a fake "miracle cure" labeled as a treatment for the novel coronavirus from the United Kingdom to California and Utah in an effort to make money off the deadly pandemic.

On April 6, investigators from the U.S. attorney's office in Pittsburgh said they broke up a fake sale of medical masks to protect against the new coronavirus, potentially saving California-based Kaiser Permanente from spending more than $7 million on nonexistent equipment.

Last week, federal prosecutors said a Georgia man planned to trick the U.S. Department of Veterans Affairs out of $750 million by pretending to secure 125 million face masks to help the agency battle the deadly coronavirus pandemic before running off with the money.

The government is represented by Robert S. Brewer Jr. and Robert S. Huie of the U.S. Attorney's Office for the Southern District of California.

Counsel information for the defendant was not immediately available.

The case is U.S. v. Jennings Ryan Staley, case number 3:20-mj-01407, in the U.S. District Court for the Southern District of California.

--Additional reporting by Matthew Santoni. Editing by Jay Jackson Jr.

For a reprint of this article, please contact reprints@law360.com.

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