Doctor Selling COVID-19 “Cure” Sentenced to Prison

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FILE PHOTO: Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

SAN DIEGO – Jennings Ryan Staley, a physician who attempted to profit from the pandemic by marketing what he described as a “miracle cure” for COVID-19, was sentenced today to 30 days of custody and one year of home confinement for trying to smuggle hydroxychloroquine into the United States to sell in his coronavirus “treatment kits.”

Last year, Staley 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.” According to court documents, Staley also suggested this mislabeling technique to another supplier who declined, telling Staley, “sorry, we must do it legally.” 

Staley admitted that he intended to sell the hydroxychloroquine powder in capsules as part of his business venture selling COVID-19 “treatment kits” in March and April 2020, at the beginning of the global pandemic. According to sentencing documents, Staley also solicited investors for his scheme, promising one that he could “triple your money in 90 days.”

In his plea agreement, Staley admitted to writing a hydroxychloroquine prescription for one of his employees, misusing the employee’s name and personal identifying information. To fill the prescription for the increasingly scarce drug, Staley proceeded to answer pharmacists’ questions as though he were the employee, all without the employee’s knowledge or consent.

Staley marketed and sold his COVID-19 “treatment kits” to customers of his Skinny Beach Med Spas in and around San Diego.  Court documents relate that law enforcement began investigating Staley after receiving several tips from concerned citizens sparked by his marketing campaign. According to admissions in his plea agreement, Staley 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” in conversations with an undercover FBI agent posing as a potential customer, and Staley stated that the products would provide at least six weeks of immunity. Staley acknowledged that these statements were material to the potential customer, and that as a doctor he abused a position of public trust and used a special skill in carrying out his scheme.

An undercover agent purchased six of Staley’s “treatment kits” for $4,000. Court documents explain that during a recorded phone call with the undercover agent, Staley not only made the false statements about the efficacy of his “treatment kits;” he also bragged that, “I got the last tank of . . . hydroxychloroquine, smuggled out of China, Sunday night at 1:00 a.m. in the morning . . . the broker . . . smuggled it out, so to speak, otherwise tricked Customs by saying it was sweet potato extract.” In a later phone call with the undercover agent, Staley spontaneously offered to throw in doses of generic Viagra and Xanax, which is a federally controlled substance. At no point did Staley ask any medical questions about the undercover agent’s purported family members, including the agent’s three supposed minor children.

Staley also admitted that he willfully impeded and sought to obstruct the federal investigation into his conduct by lying to federal agents.  Specifically, when interviewed by law enforcement, Staley falsely denied ever claiming that his “treatment kits” were a “one hundred percent effective cure,” adding “that would be foolish.”  Staley also 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 the agent’s five supposed family members.

U.S. District Judge Gonzalo P. Curiel also ordered Staley to pay a $10,000 fine and ordered forfeiture of the $4,000 paid by the undercover agent, as well as more than 4,500 tablets of various pharmaceutical drugs, multiple bags of empty pill capsules, and a manual capsule-filling machine.

“At the height of the pandemic, before vaccines were available, this doctor sought to profit from patients’ fears,” said U.S. Attorney Randy Grossman.  “He abused his position of trust and undermined the integrity of the entire medical profession. We are committed to enforcing the laws of the United States and protecting patients, including prosecuting doctors who choose to commit crimes.” Grossman commended the prosecution team and federal agents from FBI and FDA-OCI, who worked hard pursuing justice in this case.  He also commended U.S. Customs and Border Protection for its assistance with the investigation. 

“The defendant used a global pandemic to prey on the public’s fear by offering a ‘cure’ for COVID-19, and then lied to FBI agents about it,” said FBI Special Agent in Charge Stacey Moy. “I want to thank our federal partners at the U.S. Food and Drug Administration – Office of Criminal Investigations, U.S. Customs and Border Protection, and the United States Attorney’s Office for their collective efforts in bringing this defendant to justice.”  

“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.

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 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 20-CR-1227-GPC                            

Jennings Ryan Staley, M.D.                           Age: 44                                   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

AGENCY

Federal Bureau of Investigation

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

U.S. Customs and Border Protection