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Justice News

Department of Justice
U.S. Attorney’s Office
Middle District of Tennessee

FOR IMMEDIATE RELEASE
Wednesday, March 11, 2015

Former Owner And Employees Of Brentwood Based Melanocorp, Inc. Plead Guilty To Federal Charges

Company Marketed and Sold Injectable Tanning Product Without FDA Approval

Edward Manookian, 63, of Hendersonville, Tenn., and former owner and President of Melanacorp, Inc., pleaded guilty today to one count of conspiring to defraud the U.S. Food and Drug Administration (“FDA”) and to one count of conspiring to smuggle goods from the United States in violation of the Food, Drug, and Cosmetic Act (“FDCA”), announced David Rivera, United States Attorney for the Middle District of Tennessee. 

“The consuming public relies heavily on the FDA’s authority to require products to be properly manufactured, labeled and rendered safe for use,” said U.S. Attorney David Rivera.  “The defendants in this case blatantly disregarded the FDA’s orders and direction and placed their desire for ill-gotten profits above the safety of the public.  The U.S. Attorney’s Office will continue to work with our regulatory partners to ensure the safety of our citizens and to bring those to justice who circumvent the safety of the public for profit.”

In a plea hearing before U.S. District Judge Todd J. Campbell, Manookian admitted that Melanocorp sold Melanotan II (“MII”), a drug that had not been approved by the FDA.  Melanocorp marketed and advertised MII as an injectable tanning product and claimed that MII could reduce skin cancer rates.  In August 2007 the FDA warned Melanocorp that MII could not be distributed without FDA approval, however, despite the FDA warning and at Manookian’s direction, Melanocorp continued to sell MII both domestically and abroad until April 2009.  Following receipt of the FDA warning letter, Melanocorp sold more than $929,000 worth of MII.

Manookian also admitted that Melanocorp advertised its MII as being manufactured in the United States, despite the fact that Melanocorp sold MII that had been imported from China.  Manookian also admitted that Melanocorp employees routinely mislabeled the contents of packages containing MII in an effort to avoid detection by U.S.Customs officials.
"When individuals, like the defendants in this case, defraud consumers by disguising the true nature of their products, they not only circumvent FDA’s regulatory authority, they also place consumers’ health in jeopardy," said George M. Karavetsos, Director, FDA Office of Criminal Investigations.

“By willfully mislabeling products and knowingly selling unapproved drugs the defendants placed illegal profit over the health and safety of law-abiding citizens,” said Acting Special Agent in Charge of HSI New Orleans Cindy M. Johnson. “Counterfeit drugs and cosmetics are a particular danger to the public because of the potential to ingest harmful substances, and HSI will continue to work with its federal, state and local law enforcement partners to keep these potentially dangerous items off the street.” Johnson oversees a five-state area of responsibility including Tennessee, Arkansas, Alabama, Louisiana and Mississippi.

Manookian is scheduled to be sentenced by Judge Campbell on June 26, 2015.  He faces up to five years in prison and a fine of up to $250,000 on each count. 

In addition, two other former employees of Melanocorp pleaded guilty today in a hearing before Judge Campbell.  Brian Manookian, 34, of Nashville, and Karen Manookian, 31, of New York City, each pleaded guilty to one count of violating the FDCA by distributing MII in interstate commerce.  Brian and Karen Manookian are scheduled to be sentenced by Judge Campbell on June 19, 2015.  Each faces up to one year in prison.

This case was investigated by the FDA- Office of Criminal Investigations and the Department of Homeland Security, Homeland Security Investigations.  The case is being prosecuted by Assistant U.S. Attorney William F. Abely.

Updated March 19, 2015