SANTA ANA, California – A physician has been found guilty of 26 felony charges for fraudulently distributing an unapproved cancer treatment over a six-year period, charging up to $2,000 per bottle, the Justice Department announced today.
Benedict Liao, 81, a.k.a. “Wada Masao,” and “Masao A. Wada,” of Fullerton, was found guilty on Tuesday afternoon of seven counts of wire fraud, 11 counts of selling a misbranded drug and eight counts of selling an unapproved new drug.
According to evidence presented at his five-day trial, Liao operated the Oeyama-Moto Cancer Research Foundation, which had offices in Monterey Park and, later, in West Covina.
Using the alias “Masao A. Wada, M.D.” Liao submitted to the United States Food and Drug Administration in 2011 and 2012 an Investigational New Drug (IND) application in which he stated that he planned to engage in clinical trials of a product called Allesgen, which he told FDA and stated in promotional material was intended to treat and cure many types of cancer. FDA received these applications and both times informed Liao that the IND applications for Allesgen had been placed on a full clinical hold due to deficiencies in the submissions.
The FDA required that a drug distributed under an IND application bear a label stating that it was a “New Drug – Limited by Federal…law to investigational use” and
Liao told FDA that he would place a label on Allesgen with such a statement. Instead of doing so, Liao manufactured Allesgen in Fullerton and distributed the unapproved drug with a label calling Allesgen a “supplement,” not a drug, and this label stated that it “had not been evaluated by the FDA” and was not intended to treat any disease.
From July 2012 through June 2014, Liao sold and distributed Allesgen at a price generally set at $2,000 per bottle, plus shipping, to customers in various states and in foreign countries, because of which he received at least approximately $850,000 in revenue. From approximately July 2014 through January 2018, Liao continued to sell and distribute additional bottles of Allesgen to customers in various states and in foreign countries, as a result of which he received additional revenue totaling approximately $765,000.
The jury found that Liao schemed to defraud buyers of Allesgen by failing to inform them it was not an approved cancer treatment, that FDA had placed it on hold, barring any distribution of it, that he was not allowed to charge anything for it, and that it could have side effects that were unpredictable and could be serious. Several Allesgen buyers testified during the trial, described sending tens of thousands of dollars to Liao, explained that the information Liao did not disclose would have been important to know, and one said that he would not have purchased it had he been told that it was unapproved.
United States District Judge James V. Selna has scheduled a February 14, 2022 sentencing hearing, at which time Liao will face a statutory maximum sentence of 20 years in federal prison for each wire fraud count and three years’ imprisonment for each of the 19 additional counts.
The FDA investigated this matter.
Assistant United States Attorney Lawrence E. Kole of the Santa Ana Branch Office is prosecuting this case.