Indictment — United States v. Jennings Ryan Staley, Southern District of California (Document 16)

Summary

A grand jury Indictment in United States of America v. Jennings Ryan Staley, Case 3:20-cr-01227-GPC, in the U.S. District Court for the Southern District of California, filed May 20, 2020 as Document 16. Count 1 charges mail fraud under 18 U.S.C. § 1341, with criminal forfeiture under Title 28, United States Code, Section 2461(c). The Indictment alleges that Staley, a licensed medical doctor who owned Skinny Beach Med Spa in San Diego, advertised COVID-19 treatment packs including hydroxychloroquine, offering a family pack for $3,995.00. It alleges that Staley told a potential customer the medicines were a magic bullet that would cure COVID-19, collected a fee of $4,000, and on or about April 9, 2020 caused a COVID-19 Treatment Pack to be mailed. The Indictment names Assistant U.S. Attorney Nicholas W. Pilchak.

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Case 3:20-cr-01227-GPC Document 16 Filed 05/20/20 PagelD.55 Page 1of6

SOUTHERN DISTRICT OF CALIFORNIA DEPUTY |

January 2019 Grand Jury

UNITED STATES OF AMERICA, Case No.
Plaintiff, INDICTMENT j
v. Title 14 U.S.C., Sec. 1341 - |
Mail Fraud; Title 18, U.S.C.,
JENNINGS RYAN STALEY, Sec. 981(a)(1)(C), and Title 28,
U.S.C., Sec. 2461(c) - Criminal
Defendant. Forfeiture

The grand jury charges, at all times material to the Indictment:

Introductory Allegations

A. COVID-19, hydroxychloroquine and chloroquine

1. COVID-19 is an infectious disease caused by a newly discovered
coronavirus. This new virus was unknown before the outbreak began in
Wuhan, China, in December 2019. The most common symptoms of COVID-19 are
fever, tiredness, and dry cough, although around 1 out of every 6 people
who gets COVID-19 becomes seriously ill and develops difficulty
breathing. On March 11, 2020, the World Health Organization (“WHO”)
recognized the outbreak as a “pandemic.” As of April 5, 2020, the WHO
reported over 1.1 million cases worldwide, with over 60,000 deaths. The
WHO web site stated, “At this time, there are no specific vaccines or
treatments for COVID-19. However, there are Many ongoing clinical trials

evaluating potential treatments.”

NWP:nlv:San Diego:5/20/20
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Case 3:20-cr-01227-GPC Document 16 Filed 05/20/20 PagelD.56 Page 2 of 6

2. As of April 7, 2020, the Centers for Disease Control and
Prevention (“CDC”) noted that there were “no drugs or other therapeutics
approved by the U.S. Food and Drug Administration [“FDA”] to prevent or
treat COVID-19.” The CDC noted that two “oral prescription drugs that
have been used for treatment of malaria and certain inflammatory
conditions,” namely hydroxychloroquine and chloroguine, were “under
investigation in clinical trials for pre-exposure or post-exposure
prophylaxis of SARS-CoV-2 infection, and treatment of patients with
mild, moderate, and severe COVID-19.”

3. By letter dated March 28, 2020, the FDA noted that
“{c]hloroquine phosphate and hydroxychloroquine sulfate are not FDA-
approved for treatment of COVID-19.” The FDA encouraged the conduct of
clinical trials to determine the effectiveness of these drugs in treating
COVID-19. However, the FDA determined that “[b]ased on the totality of
scientific evidence available to FDA, it is reasonable to believe that
chloroquine phosphate and hydroxychloroquine sulfate may be effective
in treating COVID-19,” and that circumstances warranted the emergency
approval of the drugs. Accordingly, the FDA authorized “the emergency
use of chloroguine phosphate and hydroxychloroquine sulfate, .. . when
clinical trials are not available, or participation is not feasible,”
subject to the specific terms of the authorization letter. These terms
included requirements that the medications be distributed from the
Strategic National Stockpile to public health authorities, and that they
“may only be used to treat adult and adolescent patients who weigh 50 kg
or more hospitalized with COVID-19 for whom a clinical trial is not

available, or participation is not feasible.”
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Case 3:20-cr-01227-GPC Document 16 Filed 05/20/20 PagelD.57 Page 3 of 6

B. Skinny Beach offered to sell hydroxychloroquine to healthy people

4. Skinny Beach Med Spa (“Skinny Beach”) was a business based in
San Diego, California that advertised services such as weight loss
programs, hyperbaric oxygen therapy, Botox, tattoo removal, hair
removal, and fat transfer. Skinny Beach was owned and operated by
defendant JENNINGS RYAN STALEY, a medical doctor who was licensed by the
State of California.

5. In and around March 2020, Skinny Beach began advertising
COVID-19 treatment packs, using email solicitation and a third-party
website. Skinny Beach offered a “COVID-19 Concierge Medicine Pack
(Family)” for $3,995.00, which included, among other things:

a. “Hydroxychlorogquine and Azithromycin for you and all
members of your family[,]” and the option to keep these medicines at the
customer’s home or at Skinny Beach’s offices;

b. “COVID-19 ELISA testing IgG and IgM to determine if you
are infected currently or previously[,]” without reference to any
requirement that the customer display symptoms of or risk factors for
exposure to COVID-19; and

Cc. “Anti-anxiety treatments to help you avoid panic if
needed and help you sleep[.]”

Skinny Beach’s marketing indicated that STALEY would instruct the
customer when to “activate” the medications by taking them.
Count 1
Mail Fraud
18 U.S.C. § 1341
6. The foregoing paragraphs are hereby incorporated by reference

as if fully stated herein.
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Case 3:20-cr-01227-GPC Document16 Filed 05/20/20 PagelD.58 Page 4 of 6

7. Beginning no later than March 27, 2020, and continuing up to
at least April 9, 2020, within the Southern District of California,
defendant JENNINGS RYAN STALEY, knowingly and with the intent to defraud,
devised a material scheme and artifice to defraud, and to obtain money
and property by means of materially false and fraudulent pretenses,
representations, and promises.

8. It was the purpose of the scheme to defraud a Skinny Beach
customer of thousands of dollars by falsely claiming that the medicines
that STALEY would sell to the customer were guaranteed to cure COVID-19
and provide immunity to COVID-19 for a period of time.

9. To execute the scheme, STALEY used the following manner and
means:

a. Skinny Beach solicited customers by sending out mass
emails advertising COVID-19 treatments;

b. STALEY solicited customers via a dedicated web site,
“covidl9medkits.com,” which also advertised COVID-19 treatments;

Cc. STALEY responded to an inquiry from a potential Skinny
Beach customer by making false promises about the ability of its
advertised medicines to cure or provide immunity from COVID-19,
including statements that the medicines were a “magic bullet,” that they
“cure[] the disease[,]” that they were “almost too good to believe,” and
that the cure would be “100%”;

d. STALEY did not require any medical analysis or evaluation
of the prospective customer before providing the customer with the
medicines; and

e. STALEY collected or caused to be collected a fee of $4,000
from the customer in exchange for the medicines and their associated

treatments.
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Case 3:20-cr-01227-GPC Document16 Filed 05/20/20 PagelD.59 Page 5 of 6

10. For the purpose of executing the above-described scheme, on
or about April 9, 2020, within the Southern District of California,
STALEY knowingly caused to be delivered by mail a package containing a
“COVID-19 Treatment Pack,” which he had caused to be mailed to the
customer in exchange for payment of $4,000.

All in violation of Title 18, United States Code, Section 1341.

CRIMINAL FORFEITURE

ll. The allegations contained in this Indictment are hereby
realleged and incorporated by reference for the purpose of
alleging forfeitures pursuant to Title 18, United States Code,
Section 981(a)(1)(C), and Title 28, United States Code, Section 2461(c).

12. Upon conviction of the offense in violation of Title 18, United
States Code, Section 1341 set forth in this Indictment, defendant
JENNINGS RYAN STALEY shall forfeit to the United States of America,
pursuant to Title 18, United States Code, Section 981(a)(1)(C), and
Title 28, United States Code, Section 2461(c), all property, real and
personal, which constitutes or is derived from proceeds of the offense
and all property traceable to such property.

13. If any of the property described above, as a result of any act
or omission of the defendant:

a. cannot be located upon the exercise of due diligence;
b. . has been transferred or sold to, or deposited with, a

third party;

c. has been placed beyond the jurisdiction of the court;
d. has been substantially diminished in value; or
e. has been commingled with other property which cannot be

divided without difficulty, the United States of America shall be
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Case 3:20-cr-01227-GPC Document 16 Filed 05/20/20 PagelD.60 Page 6 of 6

entitled to forfeiture of substitute property pursuant to Title 28,
United States Code, Section 2461(c).

All pursuant to Title 18, United States Code, Sections 98i(a) (1) (C), and
Title 28, United States Code, Section 2461(c).

DATED: May 20, 2020.

A TRUE BILL:

Foreperson

ROBERT S. BREWER, UR.
United States Attorney

NICHOLAS W. PILCHAK
Assistant U.S. Attorney


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