Date: 07-09-2018

Case Style:

Case Number: 2:17-cr-00061-APG-CWH

Judge: Andrew P. Gordon

Court: United States District Court for the District of Nevada (Clark County)

Plaintiff's Attorney: Carla Baldwin Carry

Defendant's Attorney: Nisha Brooks-Whittington - FPD

Description: Las Vegas, NV - Internet Business Owner Pleads Guilty To Selling $2.3 Million Worth Of Non-FDA Approved And Misbranded Botox And Juvederm-Related Products

The owner and operator of numerous beauty product websites pleaded guilty on July 6, 2018 to selling $2.3 million in non-FDA approved and misbranded drugs and medical devices, announced U.S. Attorney Dayle Elieson for the District of Nevada and announced U.S. Attorney Dayle Elieson for the District of Nevada and Special Agent in Charge William P. Conway of the U.S. Food & Drug Administration (FDA) Office of Criminal Investigations’ Chicago Field Office.

Kelly Luanne Schaible, aka Kelly Reed and Heather Lane, 56, previously of Henderson, Nevada, pleaded guilty before U.S. District Judge Andrew P. Gordon to one count of wire fraud and one count of introduction of misbranded medical devices in interstate commerce.

According to court documents, from 2009 to at least 2014, Schaible owned and operated AAE d/b/a Basics, Inc.; Basics, Inc.; and Basics Inc., Ltd. The companies’ websites sold various beauty products related to weight loss, hair loss, skin care, eyelashes, and wrinkle reduction. She operated the websites from Illinois, then from various homes she occupied in Henderson.

In admissions made in her plea agreement, Schaible knowingly marketed, sold, and distributed non-FDA approved prescription drugs containing Botulinum Toxin Type A, also known as Botox, and non-FDA approved prescription devices containing hyaluronic acid, also known as Juvederm related products. She obtained these products from distributors in China.

She further admitted that she made various misrepresentations on the websites that lead customers to believe the fake Botox and Juvederm products offered for sale were safe and could be administered without a prescription. She did not require customers to provide a valid prescription prior to purchase and the products were not properly labeled as required by federal law. Schaible sold approximately 9,500 units of misbranded prescription drugs containing Botulinum and received approximately $1.7 million in sales revenue. She also sold approximately 4,000 units of misbranded Juvederm products and received approximately $630,000 in sales revenue.

Furthermore, on July 1, 2012, Schaible made an online sale of misbranded products to a customer in Pennsylvania. The products did not have proper labeling providing adequate directions for use as required by federal law. She mailed the products from Henderson to Dresher, Pennsylvania using the U.S. Postal Service.

Sentencing is scheduled for October 25, 2018. The maximum statutory penalty for wire fraud is up to 20 years in prison and a $250,000 fine and the maximum statutory penalty for introducing misbranded devices into interstate commerce is three years in prison and a $10,000 fine.

The case was investigated by the FDA-Office of Criminal Investigations. Assistant U.S. Attorney Carla Baldwin Carry is prosecuting the case.

If you find a website that may be illegally selling medical products and devices, dietary supplements or cosmetics over the internet, make a report to the FDA by calling 1-866-300-4374 or at https://www.fda.gov/Safety/ReportaProblem/ucm059315.htm.

Outcome: 07/06/2018 35 PRELIMINARY ORDER OF FORFEITURE as to Kelly Luanne Schaible. Signed by Judge Andrew P. Gordon on 7/6/18. (Copies have been distributed pursuant to the NEF - MMM) (Entered: 07/06/2018)
07/06/2018 36 PLEA AGREEMENT as to Kelly Luanne Schaible. (MMM) (Entered: 07/06/2018)
07/06/2018 37 MINUTES OF PROCEEDINGS - Change of Plea as to Kelly Luanne Schaible held on 7/6/2018 before Judge Andrew P. Gordon. Crtrm Administrator: Melissa Johansen; AUSA: Carla Baldwin Carry; Def Counsel: Nisha Brooks-Whittington; Court Reporter/Recorder: Heather Newman; Time of Hearing: 9:04 a.m. - 9:37 a.m.; Courtroom: 6C; Defendant is present at liberty. Defendant pleads GUILTY to Counts 3 and 21 of the Indictment. Plea Agreement filed. Court accepts the guilty plea. This matter is referred to the probation department for investigation and report. Trial setting as to this defendant is vacated. Defendant is continued on present terms of release. Preliminary Order of Forfeiture executed. Sentencing and disposition set for 10/25/2018 at 10:30 AM in LV Courtroom 6C before Judge Andrew P. Gordon.(no image attached) (Copies have been distributed pursuant to the NEF - MAJ) (Entered: 07/06/2018)
07/06/2018 38 NOTICE OF ATTORNEY APPEARANCE Sue Fahami appearing for USA. and Substitution of Counsel (Fahami, Sue) (Entered: 07/06/2018)

Plaintiff's Experts:

Defendant's Experts:

Comments: Editor's Comment: It is truly amazing that the Defendant could sell $2.8 million in fake goods on the Internet and be so broke that she gets a Federal Public Defender to represent her.