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Four Charged With Selling Misbranded Hair Treatment Drugs On The Internet

September 28, 2012

SALT LAKE CITY – A federal grand jury returned an indictment Wednesday charging four individuals with selling and conspiring to sell misbranded hair treatment drugs over the Internet without U.S. Food and Drug Administration (FDA) approval or registration.

Charged in the indictment are Richard Lee, age 72, and James Dorius, age 69, both of Whittier, California, and Alexander Ahn, age 32, and Min Kim, age 32, both of Provo, Utah. According to the indictment, Lee is a licensed physician. Lee and Dorius are co-owners of Regrowth, LLC, a California business that made and sold hair treatment drugs over the Internet without the approval of the FDA or without registering the drug with the FDA, the indictment alleges. Ahn and Kim were affiliated with Minoxidil Solutions, a Utah company established in June 2011. The indictment alleges that like Regrowth, LLC, Minoxidil Solutions sold hair treatment drugs over the internet without FDA approval or registration.

The laws and regulations governing drugs are in place to make sure, among other things, that drugs are manufactured safely and that they have the identity, strength, quality and purity characteristics they purport to possess.

The indictment alleges that the FDA discovered that Regrowth was selling misbranded products developed by Lee using his own formulas and recipes. Some of the products contained active pharmaceutical ingredients. The company did not register Regrowth, LLC with the FDA and did not seek or obtain approval to sell its hair growth drugs. As a part of an agreement with the FDA, Lee agreed not to distribute any remaining drugs and agreed to send his customers an “urgent drug recall” notice informing them that the products had been recalled because the FDA had determined that its products were unapproved by the FDA and may be potential health hazards.

The indictment alleges that Lee and Dorius later arranged to deliver Regrowth’s remaining drug ingredients and manufacturing equipment to Kim and Ahn in Orem and that Lee provided Kim and Ahn with his formulas and recipes for making hair growth drugs. According to the indictment, Kim agreed to pay Lee and Dorius 50 percent of all proceeds from the sale of hair growth drugs made using Lee’s ingredients and formulas. Minoxidil Solutions was established and began to sell hair loss drugs over the internet without FDA approval or registration, according to the indictment.

"The FDA Office of Criminal Investigations will continue to investigate and seek prosecution against individuals who distribute unapproved and misbranded drugs with complete disregard for the safety of the American public," said Patrick J. Holland, Special Agent in Charge of the Kansas City Field Office, U. S. Food and Drug Administration, Office of Criminal Investigations. "These kinds of cases are important because in many instances individuals are advised by FDA that they cannot lawfully manufacture and sell unapproved and misbranded drugs, yet even after warning, they continue to manufacture and sell these prohibited drugs.”

The potential maximum penalty for count one of the indictment, conspiracy to introduce misbranded drugs into interstate commerce, is up to five years in federal prison and a $250,000 fine. All four defendants are charged in count one. The potential penalty for count two, introduction of misbranded drugs into interstate commerce, is up to three years in prison and a fine of $10,000. Lee and Dorius are charged in count two. The potential sentence for count three, introduction of misbranded drugs into interstate commerce, is up to a year in prison and a fine of $1,000. Kim and Ahn are charged in count three, which is a misdemeanor.

Lee, Dorius, Ahn and Kim are schedule to appear for an initial appearance in the case Tuesday, Oct. 23, 2012, at 10 a.m. before U.S. Magistrate Judge Paul M. Warner.

Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

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