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Intellectual Property Rights and Commercial Fraud
05/15/2019

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3 new federal cases allege illegal distribution of male sexual enhancement pills falsely branded as "herbal" medicine

LOS ANGELES – Three companies and five executives have agreed to plead guilty to federal criminal charges 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 today in U.S. District Court against distributors of the misbranded drugs. The investigation into these cases was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Los Angeles, with assistance from the Food and Drug Administration’s Office of Criminal Investigations.

In one of the new cases, Ronald Daniel Scott, a.k.a., “Danny Scott,” 49, of Stevenson Ranch, agreed to plead guilty to a misdemeanor charge of introducing misbranded drugs into interstate commerce. Scott is the chief executive officer of Premiere Sales Group, Inc., a Santa Clarita-based company that also agreed to plead guilty to the same charge. Scott admitted in a plea agreement filed today 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 filed today charged the following 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. In order to boost sales, Lee made the pills with up to 14 times the level of Tadalafil contained in Cialis. 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.

In their plea agreements, Contenda Health and the Cranfords admitted to purchasing more than 1.4 million misbranded pills from Lee for approximately $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.

Once they enter their guilty pleas, the five businessmen charged today each will face a statutory maximum sentence of one year in federal prison. The three corporate entities will face 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.

The arraignments in these cases 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. 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.

The cases are being prosecuted by the U.S. Attorney, Central District of California.

Hidden active pharmaceutical ingredients have been identified in products promoted not only for sexual enhancement, but also for bodybuilding, pain relief and weight loss. The FDA has issued hundreds of public warnings and recall announcements related to these types of fraudulent products. The FDA’s Tainted Products database can help consumers identify some of these potentially harmful products. Even if a product is not included in the list, consumers should be cautious about using certain products, especially those promoted for sexual enhancement, weight loss, bodybuilding and pain relief.

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Last Reviewed/Updated: 05/20/2019