3 February 2005 – LAWFUEL – The Law News Network – Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; David W. Bourne, Special Agent in Charge, Food and Drug Administration (FDA), Office of Criminal Investigations; Brian Wimpling, Special Agent in Charge, Internal Revenue Service, Criminal Investigation; Henry Gutierrez, Inspector in Charge, United States Postal Inspection Service; and Don Saxon, Commissioner, Office of Financial Regulation, State of Florida, announced today that a seventy-five (75) count Indictment has been unsealed, and two (2) defendants arrested, in connection with the defendants’ involvement in an unapproved infant formula scheme. The defendants, Brian Bishop and Patricia Bishop, of Broward County, Florida, were arrested this morning and made their initial appearances in federal court in Ft. Lauderdale, Florida.
The Indictment, which was returned by a federal grand jury on February 1, 2005, charges the defendants with conspiring to commit wire fraud, securities fraud, wire fraud, and the introduction of misbranded food into interstate commerce, in violation of Title 18, United States Code, Section 371; thirty-four counts of security fraud, in violation of Title 15, United States Code, Sections 78j(b) and 78ff; eight (8) counts of mail fraud, in violation of Title 18, United States Code, Section 1341; six (6) counts of wire fraud, in violation of Title 18, United States Code, Section 1343; conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h); twenty-four (24) counts of money laundering, in violation of Title 18, United States Code Sections 1956(a)(1)(A)(i) and/or 1957; and one (1) count of the introduction into interstate commerce of misbranded food, in violation of Title 21, United States Code, Section 331(a).
If convicted the defendants face a maximum statutory sentence of five (5) years’ imprisonment on the wire fraud, securities fraud, mail fraud, and introduction of misbranded food conspiracy count; ten (10) years’ imprisonment on each of the securities fraud counts; twenty (20) years’ imprisonment on each of the mail and wire fraud counts; twenty (20) years’ imprisonment on the conspiracy to commit money laundering counts and on the substantive “promotion” money laundering counts, and ten (10) years’ imprisonment on other money laundering counts; and three (3) years’ imprisonment on the introduction into interstate commerce of misbranded food count.
As reflected in the Indictment, the defendants, through a number of different companies, including Baby’s Best Laboratories, purported to offer an FDA approved infant formula called “Baby’s Best II,” and even distributed the product for consumption by infants. In fact, the product was not FDA approved and some of the distributed product had expired. In and around the fall of 2000, defendant Brian Bishop provided a pediatrician in South Florida with cans of the unapproved, expired formula, and the physician, not knowing that it had not been tested, distributed the product for her infant patients’ use. In addition, in or around July 2000, the defendants contracted with a foreign distributor to distribute their unapproved, expired product in Central and South America. Thereafter, the foreign distributor returned the product, complaining that the product was expired and requested fresh product. The defendants repackaged the expired, unapproved product with a later expiration date. In an effort to conceal the fact that their product had not been FDA approved or tested, they removed the following legend from the bottom of the cans: “NOT FOR INFANT FEEDING” and “TEST SAMPLES ONLY.”
In addition to distributing the unapproved infant formula for use by infants, the defendants offered investment opportunities in their company, Baby’s Best Laboratories, selling approximately $1.14 million in stock. The defendants’ company’s offering materials included material misrepresentations of fact, including, among others, that the infant formula was suitable for consumption by infants, even thought the product was not FDA approved and was expired. The defendants y also told investors that they had a contract with a foreign distributor that would generate revenues of $41 million for Baby’s Best Laboratories by the end of 2001 and that the product had been well received in the international market and that the infant formula would be soon be marketed in the United States because clinical studies would be concluded shortly, when in fact, there were no clinical studies.
Mr. Jiménez commended the investigative efforts of the Food and Drug Administration, Office of Criminal Investigation, Internal Revenue Service, Criminal Investigation, United States Postal Inspection Service, and the Office of Financial Regulation, State of Florida. This case is being prosecuted by Assistant United States Attorney Laurie E. Rucoba.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls . Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on .