Three companies and five executives agreed Wednesday to plead guilty to federal criminal charges filed in Los Angeles, alleging that they purchased and resold millions of dollars' worth of pharmaceutical-grade erectile dysfunction pills that were falsely labeled as male herbal remedies.
The anticipated guilty pleas are in relation to three cases filed in Los Angeles federal court against distributors of the misbranded drugs, according to the U.S. Attorney's Office.
In one of the cases, Ronald Daniel "Danny" Scott, 49, of Stevenson Ranch, agreed to plead guilty to a misdemeanor charge of introducing misbranded drugs into interstate commerce. Scott is the CEO of Premiere Sales Group Inc., a Santa Clarita-based company that also agreed to plead guilty to the same charge, according to the U.S. Attorney's Office.
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Scott admitted in a plea agreement that, from 2013 until early 2017, he purchased at least 1.7 million male sexual enhancement pills for $3.8 million from John Seil Lee, 40, of Walnut, the manufacturer of the pills who pleaded guilty in February to a series of felony offenses related to his illegal business.
Two other federal cases charged six defendants with misdemeanor charges of conspiring with Lee to distribute his misbranded erectile enhancement drugs.
-- Contenda Health LLC, a Southern Pines, North Carolina-based company;
-- Chase Evan Cranford, 36, of Raleigh, North Carolina, the owner of Contenda Health LLC;
-- Randall Cranford, 65, of Pinehurst, North Carolina, who is Chase Cranford's father and who assisted him at Contenda Health;
-- Eldorado Trading Company II Inc., a distributor of adult toys and other sexual products, based in Broomfield, Colorado;
-- Jon Vogt, 58, of Erie, Colorado, the director of purchasing for Eldorado Trading; and
-- Dennis Jones, 65, of Thornton, Colorado, the senior buyer at Eldorado Trading.
According to court documents, Lee smuggled powder Tadalafil -- the prescription drug used to treat erectile dysfunction and sold under the brand name Cialis -- from China. Lee then manufactured the powder Tadalafil into pills that he sold to distributors across the United States, federal prosecutors said.
In order to boost sales, Lee made the pills with up to 14 times the level of Tadalafil contained in Cialis, court documents show. Lee sold at least $11 million worth of pills across the United States -- under names such as X.
Again, X Monster and Royal Master -- with labels that did not disclose the presence of Tadalafil and falsely stated that no prescription was necessary, according to the U.S. Attorney's Office.
In their plea agreements, Contenda Health and the Cranfords admitted to purchasing more than 1.4 million misbranded pills from Lee for about $2.1 million, which they resold to retail locations across the United States.
Eldorado Trading, Jones and Vogt admitted in their plea agreements to buying hundreds of thousands of misbranded pills from Lee, which Eldorado Trading resold for a profit of at least $215,000, prosecutors said.
The five businessmen charged Wednesday each face up to a year in federal prison. The three corporate entities are facing up to five years of probation, as well as monetary sanctions of up to $200,000 in fines or twice the gross gain resulting from the criminal offenses, according to federal prosecutors.
Arraignments have been scheduled for June 24 for the defendants in the Eldorado Trading case; June 27 for the defendants in the Premiere Sales case; and July 15 for the defendants in the Contenda Health case.
The FDA's approval of Cialis is limited to the use under the supervision of a licensed professional. Prosecutors noted that due to toxicity and other potentially harmful effects -- including life-threatening drops in blood pressure, loss of vision, loss of hearing and prolonged, painful erections that can result in permanent injury -- drugs similar to Cialis are not safe for use except under the supervision of a medical practitioner.