SANTA ANA, California – A Fullerton man was arrested this morning after being named in a federal grand jury indictment that accuses him of illegally importing and selling erectile dysfunction drugs that he falsely marketed as herbal supplements for men.
Nam Hyun Lee, 60, who is sometimes known as “Daniel Lee,” a South Korean national believed to be illegally residing in the United States, was arrested without incident at his residence.
The grand jury issued a 12-count indictment against Lee following an investigation by the United States Food and Drug Administration’s Office of Criminal Investigations (FDA OCI), U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the Los Angeles Police Department’s Major Crimes Division, U.S. Customs and Border Protection, and the Federal Bureau of Investigation.
The indictment charges Lee with conspiracy, three counts of smuggling misbranded drugs into the United States, and eight counts of introducing misbranded drugs into interstate commerce.
In 2016 and 2017, Lee established a number of companies based in Buena Park and Cypress, but neither Lee nor his companies possessed licenses to distribute wholesale drugs or prescription medications, according to the indictment.
FDA OCI began investigating Lee in late 2015 for illegally smuggling Tadalafil and Sildenafil Citrate from China and Hong Kong into the United States. These compounds are the active ingredients in the brand name prescription drugs Cialis and Viagra.
The indictment specifically alleges that Lee arranged large shipments of Tadalafil and Sildenafil to be smuggled into the United States under manifests that falsely declared the drugs were products such as acrylic paint and glass bottles.
Viagra and Cialis can be prescribed only be licensed medical practitioners. “Due to toxicity and other potentially harmful effects (e.g., life-threatening drops in blood pressure; loss of vision; loss of hearing; and prolonged, painful erections that result in permanent injury to the penis), drugs similar to Viagra and Cialis were not safe for use except under the supervision of a practitioner licensed by law to administer them, and they were thus prescription drugs as well,” the indictment states.
According to court documents, Lee was illegally importing these controlled drugs in powder form, and then creating individual-dose capsules which he sold to distributers across the county as non-prescription herbal male sexual enhancement products. When Lee sold his products, “labeling stated that no prescription was necessary and did not disclose the presence of Tadalafil and Sildenafil.” The indictment details shipments of capsules to distributors in Baltimore and Beaumont, Texas.
Lee’s products were eventually sold by various online businesses and retail outlets, including at several Orange County convenience stores, under names such as “Rhino,” “Orgazen,” “Black Panther,” “libigrow,” “Black Stallion” and “Black Mamba.” The indictment alleges the illegal sales continued into 2018.
Lee is expected to be arraigned on the indictment this afternoon in United States District Court in Santa Ana.
An indictment complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The conspiracy count in the indictment carries a statutory maximum penalty of five years in federal prison. Each smuggling count could bring a sentence as high as 20 years. The charges alleging the introduction of misbranded drugs each carry a maximum sentence of three years.
The indictment also seeks the forfeiture of a $1.2 million residence in Fullerton that prosecutors allege was purchased with proceeds from the illegal activity charged in the indictment. The indictment also seeks the forfeiture of funds contained in several bank accounts, an as-yet undetermined amount of cash seized during the execution of search warrants this morning, and all drugs illegally smuggled into the United States.
This case is being prosecuted by Assistant United States Attorney Jake Nare of the Santa Ana Branch Office and Assistant United States Attorney Katharine Schonbachler of the Asset Forfeiture Section.
Hidden active pharmaceutical ingredients have been identified in products promoted not only for sexual enhancement, but also for weight loss, bodybuilding and pain relief. 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.