July 17, 2021 - SAN DIEGO – Jennings Ryan Staley, a physician who attempted to profit from the pandemic by marketing a “miracle cure” for COVID-19, pleaded guilty in federal court on Friday, admitting that he tried to smuggle hydroxychloroquine into the United States to sell in his coronavirus “treatment kits.”

Staley, the former operator of Skinny Beach Med Spas in and around San Diego, also admitted in his plea agreement that he abused his position of trust as a physician in making the extreme claims, and that he lied to the FBI when confronted about it.

The doctor pleaded guilty to one count of importation contrary to law, admitting that he worked with a Chinese supplier to try to smuggle into the United States a barrel that he believed contained over 26 pounds of hydroxychloroquine powder by mislabeling it as “yam extract.”  Staley admitted that he intended to sell the hydroxychloroquine powder in capsules as part of his 2020 business venture selling the COVID-19 “treatment kits.”

In his plea agreement, Staley also admitted that he wrote a prescription for hydroxychloroquine for one of his employees and then misused the employee’s name and personal identifying information and answered questions as though he were the employee to fill the prescription, all without the employee’s knowledge or consent. Staley agreed that he engaged in this conduct in order to obtain more of the drug for his enterprise. 

In late March and early April 2020, Staley marketed and sold his treatment kits to Skinny Beach customers.  According to the plea agreement, he described his products—which included hydroxychloroquine—as a “one hundred percent” cure, a “magic bullet,” an “amazing weapon,” and “almost too good to be true,” and stated that the products would provide at least six weeks of immunity. Staley admitted that these statements were material to his potential customers, and that as a doctor he abused a position of public trust. An undercover agent purchased six of Staley’s treatment packs for $4,000. 

Staley also admitted that he willfully impeded and sought to obstruct the federal investigation into his conduct by lying to federal agents.  Specifically, he falsely denied ever claiming that his treatment packages were a “one hundred percent effective cure,” adding “that would be foolish.”  Staley likewise falsely claimed that his medical practice would “absolutely” get all relevant information about each family member when sending out medications for a family treatment pack, when just a week earlier, he had dispensed a “family pack” of hydroxychloroquine, chloroquine, generic Viagra, Xanax, and azithromycin to the undercover agent without collecting any medical information from the agent or his five supposed family members.

“While healthcare workers around the world selflessly labored on the frontlines of an international pandemic, this doctor used his position of trust to cash in on COVID-19 fears,” said Acting U.S. Attorney Randy Grossman. “We are committed to protecting the American people from such scams and holding the scammers accountable.” Grossman commended the federal agents from FBI and FDA-OCI, and Assistant U.S. Attorneys Nicholas Pilchak and Jaclyn Stahl, who worked hard pursuing justice in this case.  He also commended U.S. Customs and Border Protection for its assistance with the investigation. 

“Dr. Staley offered a 'magic bullet' - a guaranteed cure for COVID-19 to people gripped in fear during a global pandemic,” said FBI Special Agent in Charge Suzanne Turner. “Today, Dr. Staley admitted it was all a lie as part of a scam to make a quick buck. The FBI will continue to vigorously pursue doctors who abuse their professions to defraud innocent victims with gimmicks of false hope and promises.”

“The FDA continues to work with its law enforcement partners to protect the public health by identifying, investigating and bringing to justice those who attempt to profit from the pandemic by offering and distributing COVID-19 treatments with unproven ‘miracle cure’ claims to American consumers,” said Special Agent in Charge Lisa L. Malinowski, FDA Office of Criminal Investigations Los Angeles Field Office.

Staley’s next court date is October 8, 2021 before U.S. District Judge Gonzalo Curiel.

On May 17, 2021, Attorney General Merrick Garland established the COVID-19 Fraud Enforcement Task Force, led by the Deputy Attorney General, to bring together the full resources of the federal government to bolster fraud enforcement efforts.

If you think you are a victim of COVID-19 fraud, immediately report it to the FBI (visit ic3.gov, tips.fbi.gov, or call 1-800-CALL-FBI or the San Diego FBI at 858-320-1800). The public is also urged to report suspected fraud schemes related to COVID-19 by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at disaster@leo.gov.

DEFENDANT                                               Case Number 20cr1227-GPC                                       

Jennings Ryan Staley, M.D.                           Age: 46                       Residence: San Diego, CA

SUMMARY OF CHARGES

Importation Contrary to Law, in violation of Title 18, United States Code, Section 545

Maximum Penalty: Twenty years in prison; fine; special assessment

AGENCIES

Federal Bureau of Investigation

U.S. Food and Drug Administration, Office of Criminal Investigations

U.S. Customs and Border Protection
Source: DOJ Release