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INSIDER Law
Sexual performance 2019

Distributors who sold drug-tainted sexual products confess to crimes

Several companies and individuals agreed to plead guilty to criminal charges related to the importation and sale of US$11 million worth of erectile dysfunction drugs marketed as herbal remedies for men.

The trend has vexed federal health officials: Once FDA warns consumers about a “tainted” product with an undeclared drug, distributors working in the shadows often change the brand name but retain the same formula.

This scenario reportedly played out in prosecutions against several companies and individuals who agreed to plead guilty to criminal charges related to the importation and sale of US$11 million worth of erectile dysfunction drugs marketed as herbal remedies for men. Even after federal authorities cracked down on a perpetrator, his friend launched a “copycat” venture, prosecutors alleged.

John Seil Lee of Walnut, California, and two of his companies, agreed to plead guilty to crimes after being accused of importing from China shipments of a prescription drug in powder form, then manufacturing the powder into pills sold to distributors across the United States.

Lee made pills falsely marketed as herbal remedies with up to 14 times the level of tadalafil in Cialis, the FDA-approved prescription drug used to treat erectile dysfunction, the U.S. Attorney’s Office in Los Angeles said. Although the typical Cialis prescription contains 25 to 85 mg of tadalafil, two of Lee’s companies sold pills that contained up to 400 mg of the drug, according to plea agreements entered in January with the U.S. District Court for the Central District of California.

The 40-year-old Lee agreed to plead guilty to a seven-count charging document that accused him of felony counts of conspiracy, importing contraband into the United States, filing a false tax return and introducing drugs into interstate commerce, according to the U.S. Attorney’s Office. Once he pleads guilty, Lee faces a maximum sentence of 20 years for the smuggling count, five years for the conspiracy count and three years for the tax count, the prosecutor’s office disclosed in a Feb. 7 news release.

Drugs similar to Cialis are only safe under a medical practitioner’s supervision due to toxicity and other potentially harmful effects, including painful erections that can lead to permanent injury, loss of vision and hearing, and life-threatening declines in blood pressure, the U.S. Attorney’s Office said.

A customer in Arkansas “allegedly suffered permanent and serious physical damage, including impotence” after consuming a pill in July 2013 with the identical formula as one of the companies’ brands, according to the plea agreements. Lee’s companies—KHK International Trade Enterprise Inc. (KHK) and SHH World Trade Enterprises Inc. (SHH)—were aware of the customer’s claim, yet “they continued selling thousands of pills with the same formula,” the plea agreements asserted.

Neither the tadalafil imported from China nor the finished products in pill form sold by Lee’s companies declared the drug on the labels, according to the criminal charges. The defendants “falsely stated that no prescription was necessary, even though the pills were in fact prescription drugs,” prosecutors alleged.

Whack-a-mole

Lee closed KHK after FDA listed one of its brands—"X Again” pills—as a tainted product on its website in December 2015. According to prosecutors, another company (SHH) established by Lee and registered in January 2016 began distributing pills containing unidentified tadalafil.

Even after FDA flagged a product as spiked with a pharmaceutical drug, Lee would manufacture a replacement but under a different name, according to court documents. For instance, prosecutors claimed Lee made a replacement pill called “Own the Knight” after FDA announced SHH’s silver “One More Knight” pills contained undeclared tadalafil.

The replacement pill, prosecutors alleged in court documents, “had the same formula and price as the tainted ‘One More Knight’ pills and similar labeling that failed to disclose the presence of tadalafil.”

Similarly, Lee manufactured a replacement pill called “Royal Master” after FDA provided a public notice that SHH’s gold “Master Zone” pills were tainted with unidentified tadalafil.

The challenges facing FDA in removing drug-tainted products from the market have sometimes been described as “whack-a-mole,” the children’s game in which moles continually pop out of holes.

Copycat Emerges

In Lee’s case, another “mole” entirely popped up: his friend Jin Su Park of Hacienda Heights, California.

Lee shut down SHH after a search warrant was executed in February 2017 at his pill business as part of an investigation by FDA and the Department of Homeland Security. But Park established RNG Global Management and Trading Group Inc. to function as a “copycat business,” the U.S. Attorney’s Office said.

According to his plea agreement, Park helped clean out Lee’s business after the search warrant was served and took about 14,000 pills that contained tadalafil.

Park “decided to copy” Lee’s “business model in almost every respect,” according to his plea agreement. He sold tadalafil-containing pills without disclosing the presence of the drug and relied on the same Chinese suppliers as Lee, the agreement said.

Park rebranded Lee’s pills as “EEZZY UP PLATINUM” and sold them to Lee’s former distributors across the United States, the U.S. Attorney’s Office said.

The 40-year-old Park—also known as “Jay Oh”—agreed to plead guilty to one felony count of importing contraband into the United States and one felony count of introducing misbranded drugs into interstate commerce, according to prosecutors. He faces a maximum sentence of 20 years for the smuggling count and three years for the distribution count, the U.S. Attorney’s Office said.

In a related case, Lancaster Distributors Inc. of Salem, Oregon, admitted in a plea agreement that it purchased from Lee at least 153,000 male sexual enhancement pills containing tadalafil for roughly $362,000, according to the U.S. Attorney’s Office. Another defendant, 42-year-old Matthew Burroughs of Salem, agreed he purchased the mislabeled drugs on behalf of Lancaster, and he faces a maximum sentence of one year in prison, the prosecutor’s office said.

The defendants are expected to enter their guilty pleas in court during their arraignments. Arraignments for Lee, KHK and SHH are scheduled for Feb. 19, while arraignments for Burroughs, Lancaster, Park and RNG Global are scheduled for March 18.

James Duff, an attorney representing Lee, KHK and SHH, did not immediately respond to a voicemail requesting comment. Yohan Lee, a lawyer representing Park and RNG Global Management and Trading Group, declined comment. Paul Ferder, a lawyer for Burroughs and Lancaster, did not immediately respond to a message left for him with his office.

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