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March 8, 2018: Four Individuals Indicted for Trafficking in Counterfeit Goods


OCI Small Clear Seal 

 

Food & Drug Administration 
Office of Criminal Investigations

 

Defendants face a forfeiture allegation of $3,699,901.94

SAN JUAN, P.R. – On March 7, 2018, a Federal grand jury returned a 28-count indictment charging four individuals with mail & phone fraud conspiracy, mail fraud, trafficking in counterfeit goods, introducing misbranded articles into interstate commerce, distribution of a controlled substance, international money laundering, & smuggling, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The U.S. Food & Drug Administration’s (FDA) Office of Criminal Investigations (OCI), Immigration & Customs Enforcement-Homeland Security Inquiry, & US Postal Inspectors were in charge of the inquiry with the collaboration of Customs & Border Protection (CBP) & the Puerto Rico Department of Treasury (Departamento de Hacienda).  

According to the indictment, defendants Carlos Enrique Velázquez-Gines, Mayra Evelise Gines-Otero, Noriam Ivette Flores-Deleon, & Vanessa Marrero-Hernández marketed and offered numerous purported “dietary supplements” for male enhancement or weight loss, which were in fact “drugs” under the Federal Food, Drug, and Cosmetic Act (FDCA) for sale to American consumers. Defendants marketed & sold the products through “online stores” on platforms such as eBay.com & Bonanzo.com, using seller name “lostchildinpr” & “deleon1988.” The products listed in the indictment include: Foreign-labeled product, XXXplosion, Power, Hard Ten Days, Zhansheng Weige, ExtenZe, ExtenZe Plus, La Pepa Negra, Lang Yi Hao, FX3000, Shark Extract, Black Storm, USA Power, Plant Vigra, Para Hombres Paradise, Jack Rabbit, Rhino 12 Titanium, Rhino 69, African Black Ant, Paradise Ultra Plus, Figa XP, U-fit, Natural Max Slimming Advanced – Appetite Reducer, & Natural Max Slimming Advanced – Fat Burner.

Many of the counterfeit male-enhancement pills contain the active pharmaceutical ingredient (sildenafil), found in popular & well-known products such as “Viagra” & “Cialis,” & these products do not advertise that pharmaceutical ingredient. Defendants also sold counterfeit condoms. Male latex condoms are medical “devices” under the FDCA.

The defendants also marketed & offered for sale purported Kylie Cosmetics brand products, including lipstick kits. Lipstick is a “cosmetic” under the FDCA. Analysis of the purported Kylie Lip Kit distributed by defendants was conducted by FDA/manufacturer, which confirmed that the lipstick & its labeling were counterfeit.

The object of the conspiracy was for defendants to unlawfully enrich themselves by purchasing from overseas suppliers, illegally importing into the United States, & subsequently selling to American consumers, FDA-regulated products that were counterfeit and/or misbranded. From at least on or about October 3, 2013 defendants purchased from overseas suppliers located in China, & imported into the United States “dietary supplements,” latex condoms, & make-up, that were counterfeit and/or misbranded under the FDCA. In an effort to evade detection by law enforcement, when ordering the illegal products from China, defendants had the packages shipped to a trans-shipper located in Miami, Florida, who would then re-package and/or re-label the parcels & send them to defendants in Puerto Rico.

Defendants mailed & caused to be mailed through the United States Postal Service numerous packages to customers across the United States containing counterfeit and/or misbranded products. They used a residence located in Villa Blanca, Manatí, P.R. as a warehouse to store & distribute the unlawful products they purchased from overseas suppliers & re-sold to customers. The defendants also distributed wholesale quantities of the counterfeit and/or misbranded products imported from overseas to wholesale buyers. Defendant Carlos Enrique Velázquez-Gines, initiated numerous phone transfers of funds to overseas suppliers to pay for the unlawful products purchased and imported by the defendants.

“These defendants sold counterfeit & misbranded medical devices, as well as counterfeit & misbranded male-enhancement pills. Some of these medications contained drugs that the consumers were not aware of & could cause danger to their health, including heart attacks or strokes,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “The U.S. Attorney’s Office will continue to work with the FDA to protect the public from adulterated & misbranded products, & to ensure that dietary supplement sellers provide accurate information about their products.”

“Americans must have confidence that the FDA-regulated products they use are authentic, safe & properly labeled,” said Justin D. Green, Special Agent in Charge, FDA OCI’s Miami Field Office. “We remain fully committed to aggressively pursuing those who place unsuspecting U.S. consumers at risk by distributing illegal drugs, devices or cosmetics.”

“The trafficking of counterfeit goods is simply illegal & in some cases, as this, it becomes a problem of public health & safety & at times threatens national security,” said Orlando Baez, the acting special agent in charge who oversees HSI operations throughout Puerto Rico and the U.S. Virgin Islands. “This illegal activity represents a triple threat as it delivers substandard & often dangerous goods into the economy, rob citizens of good-paying jobs, & generate proceeds that are often funneled back into other criminal enterprises. HSI will continue to work with its enforcement partners to combat the distribution of counterfeit products especially those who that endanger public health.”

Consumers can contact FDA’s MedWatch program at 1-800-FDA-1088 to report suspected serious adverse events, product quality problems, or product use errors associated with the use of an FDA-regulated product, as well as suspected counterfeit medical products.

Defendants are facing a forfeiture allegation of $3,699,901.94, six properties or homes, two bank accounts, one Pay Pal account, and three certificates of deposit. If convicted, the defendants face a maximum possible sentence of 30 years for the conspiracy charges, 10 years for trafficking counterfeit goods, three years for introducing and receiving misbranded products in interstate commerce. Velázquez-Gines is also facing up to 20 years in prison for international money laundering & 20 years for smuggling. The case is being prosecuted by Assistant U.S. Attorney Edward Veronda. An indictment contains only charges and is not evidence of guilt. Defendants are presumed to be innocent unless & until proven guilty.

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Topic(s): 

Consumer Protection

Drug Trafficking

Financial Fraud

Component(s): 

USAO – Puerto Rico

 

 

 

 

 

 

 

Updated: March 8, 2018 — 6:55 pm

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