Compounding Center Operators Charged
with Illegal Growth Hormone Sales

Stephen Barrett, M.D.


In 2009, Sean Shaffer and The Compounding Center, Inc.,of Phoenix, Arizona were charged with illegally distributing HGH. The indictment alleged that the company's Web site touted impermissible uses of HGH for "anti-aging" purposes and that from 2001 through 2006, nine doctors made more than 400 purchases totaling more than $1.1 million. The indictment (shown below) also states that Shaffer, in his capacity as the manager of the wholesale department of the Compounding Center, also sold a number of HGH kits to two undercover operatives who specifically told him that the purchases were for bodybuilders and athletes.


IN THE UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA

United States of America,

Plaintiff,

v.

Sean Shaffer, and

The Compounding Center, Inc.,

Defendants.




|
|
|
|
|
|
|
|
|
|
|
|
|
|
|





VIO:

CR09-717-PHX-ROS (CMHB)

INDICTMENT

18 U.S.C. § 371
(Conspiracy)
(Count 1)

21U.S.C. (§ 333(E)(1)
(Prohibited Distribution of Human Growth Hormone)
Counts 2 and 3

28U.S.C. § 2461(c)
21 U.S.C. §§853 and 9709
(Forfeiture Allegations)

THE GRAND JURY CHARGES:

COUNT 1
CONSPIRACY

INTRODUCTION

At all times material to this Indictment:

1. The defendant, SEAN SHAFFER, worked as an employee of THE COMPOUNDING CENTER, INC. ("COMPOUNDING CENTER")

2. The defendant, COMPOUNDING CENTER, was a pharmacy licensed and regulated by the State of Arizona through the Arizona State Board of Pharmacy ("Board") and the Drug Enforcement Administration ("DEA"). The listed owners of the COMPOUNDING CENTER were Fred and Marcia Shaffer.

3. The COMPOUNDING CENTER had two different departments, retail and wholesale. SEAN SHAFFER ran the wholesale department. SEAN SHAFFER is the son of Fred and Marcia Shaffer.

4. The Federal Food, Drug, and Cosmetic Act prohibits knowingly distributing or possessing with the intent to distribute human growth hormone for any use in humans other than for the treatment of a disease or other recognized medical condition, where such use has been authorized by the Secretary of Health and Human Services under 21 U.S.c. § 355 and pursuant to the order of a physician. 21 U.S.C. § 333(e). The Food and Drug Administration (FDA) has approved human growth hormone ("HGH") for the following uses: short stature in children with growth hormone deficiency, ideopathic short stature in children, short stature in children with Turner or Prader-Willi syndrome, short stature in children with chronic renal insufficiency, adults with biochemically documented growth hormone deficiency (GHD) diagnosed either in adulthood or childhood, adults with wasting disease associated with AIDS, and adults with short bowel syndrome. HGH has not been approved for use in any anti-aging, body-building, or weight loss treatments. HGH has not been shown to be safe and effective for the enhancement of athletic performance.

5. The FDA approved use of human growth hormone is most commonly found in a clinical endocrine practice and the HGH administered by or dispensed through endocrinologists to patients meeting the aforementioned criteria for treatment.

6. The term "human growth hormone" means Somatrem, Somatropin, or an analogue of either of them. 21 U.S.C. § 333(e)(4). It is therapeutically equivalent to pituitary-derived human growth hormone. Somatropin is marketed under brand names such as "Saizen". It is a prescription drug.

7. On March 13, 2006, the COMPOUNDING CENTER's website read to include, "Human Growth Hormone is one of many endocrine hormones like progesterone, estrogen, testosterone, and DHEA, which declines (sic) in production as we age. Many ofthese hormone (sic) can be replaced to help deter the effect of aging. Human Growth Hormone reaches beyond the scope of these hormones alone. Studies show that it can help to reverse a wide range of signs and symptoms associated with 'Aging'. The Compounding Center, working with your physician, can supply many different forms of anti-aging products."

8. Accounting records reveal that, from on or around November, 2001, through on or around March, 2006, the COMPOUNDING CENTER made wholesale sales in the amount of $21,413,098.

9. From on or around November, 2001, through on or around March, 2006, Saizen accounted for approximately 38%, or $8,184,441, of these sales.

10. Board regulations allowed pharmacies, such as the COMPOUNDING CENTER, to make wholesale sales of drugs directly to doctors without the receipt of a prescription.

CERTAIN WHOLESALE SALES TO DOCTORS:

11. Dr. A was a licensed medical doctor practicing in the State of California. Dr. A 13 was not a board certified endocrinologist. On or between November 30, 2001, and January 5th, 2004, Dr. A purchased $71,642 worth of Saizen. These 29 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

12. Dr. B was a licensed medical doctor practicing in the State of California. Dr. B. was not a board certified endocrinologist. Dr. B maintained a website describing his medical practice to be focused on alternative medicine with an emphasis on weight loss, fitness and exercise improvement. The website does not indicate that Dr. B engages in the treatment of a disease or other recognized medical condition that would allow the distribution or possession with the intent to distribute HGH. On or between December 13, 2001, and March 24, 2004, Dr. B purchased $227,991 worth of Saizen. These 41 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

13. Dr. C was a licensed medical doctor practicing in the State of California. Dr. C was not a board certified endocrinologist. Dr. C worked out of the medical clinic owned by Dr.B. On or between December 10, 2001 and March 10, 2004, Dr. C purchased $102,984 worth of Saizen. These 26 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

14. Dr. D was a licensed medical doctor practicing in the State of California. Dr. D was not a board certified endocrinologist. Dr. D worked out of the medical clinic owned by Dr. B. On or between May 3, 2002, and July 13, 2004, Dr. D purchased $108,983 worth of Saizen. These 31 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

15. Dr. E was a licensed medical doctor practicing in the State of California. Dr. E was not a board certified endocrinologist. On or between December 10, 2001 and December 21, 2005, Dr. E. Purchased $141,455 worth of Saizen. These 127 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

16. Dr. F was a licensed medical doctor practicing in the State of Texas. Dr. F was not a board certified endocrinologist. Dr. F created, or commissioned the creation of, a pamphlet describing his medical clinic. This pamphlet described the function of the clinic as anti-aging, performance enhancement and life extension. The pamphlet gave no indication that Dr. F. engaged in the treatment of a disease or other recognized medical condition that would allow the distribution or possession with the intent to distribute HGH. On or between December 3, 2001 and July 6, 2004, Dr. F purchased $144,506 worth of Saizen. These 52 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

17. Dr. G was a licensed medical doctor practicing in the State of Arizona. Dr. G was not a board certified endocrinologist. Dr. G's practice was exclusively centered on anti-aging medicine and advertised the practice as such through, among other things, signage and a website. Dr. G did not engage in the treatment of a disease or other recognized medical condition that would allow the distribution or possession with the intent to distribute HGH. On or between April 1, 2002 and September 9, 2004, Dr. G purchased $216,003 worth of Saizen. These 41 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

18. Dr. H was a licensed medical doctor practicing in the State of California. Dr. H was not a board certified endocrinologist. Dr. H. maintained a website containing quotes from Dr. H advocating the prescribing and dispensing of human growth hormone for anti-aging, longevity ~ and performance and life enhancement. The website, among other things, listed Saizen prices and availability for purchase from the clinic. Nowhere in the website was there an indication that Dr. H. engaged in the treatment of a disease or other recognized medical condition that would allow the distribution or possession with the intent to distribute human growth hormone. On or between May 8, 2002 and February 8, 2006, Dr. H. purchased $140,270 worth of Saizen. These 73 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

19. Dr. I was a licensed medical doctor practicing in the State of New York. Dr. I was not a board certified endocrinologist. Dr.! maintained a website describing his medical practice to be focused on anti-aging, life extension, performance enhancement, and disease prevention. Nowhere in the website was there an indication that Dr. I engaged in the treatment of a disease or other recognized medical condition that would allow the distribution or possession with the intent to distribute human growth hormone. On or between December 12, 2001 and October 13, 2003, Dr. I purchased $80,493 worth of Saizen. These 41 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

20. Confidential Informant 1, ("CS 1") was a physician practicing in the State of Arizona. CS 1 was not a board certified endocrinologist. CS 1's practice was exclusively centered around anti-aging. On or between December 10, 2001, and August 27, 2004, CS 1 purchased $20,794.25 worth of Saizen. These 37 separate purchases were made from the wholesale department of the COMPOUNDING CENTER.

CONTROLLED PURCHASES:

21. Confidential Informant 2, ("CS 2 "), worked at the direction of DE A Special Agent Steven Lamkin. On July 28, 2005, CS2 called SEAN SHAFFER at the COMPOUNDING CENTER. CS2 relayed to SEAN SHAFFER that he wished to purchase ten vials of Saizen to be used by body builders in Southern California. SEAN SHAFFER quoted a price of $1 75 per vial. The next day, July 29, 2005, CS2 entered the wholesale department of the Compounding Center and met with SEAN SHAFFER. CS2 then purchased ten human growth hormone kits, each kit containing Saizen, from SEAN SHAFFER. CS2 received an invoice from SEAN SHAFFER indicating that the purchase was made from the COMPOUNDING CENTER in the amount of $1,750.

22. Steven Lamkin is a duly sworn Special Agent ("SA") ofthe DEA and has been so employed since July 1996. On August 19, 2005, SA Lamkin made an undercover purchase of Saizen from SEAN SHAFFER out of the wholesale section of the COMPOUNDING CENTER. SA Lamkin told SEAN SHAFFER that the purchase of the Saizen was for clients in Malibu, California who were athletes. SEAN SHAFFER sold SA Lamkin ten human growth hormone kits, each kit containing Saizen. SA Lamkin received an invoice from SEAN SHAFFER indicating that the purchase was made from the COMPOUNDING CENTER in the amount of $1,750.

THE CONSPIRACY

23. The factual allegations in paragraphs 1-21 of the Indictment are incorporated by reference and re-alleged as fully set forth herein.

24. From on or about November, 2001, through on or about March, 2006, in the District of Arizona and elsewhere, defendants COMPOUNDING CENTER, SEAN SHAFFER and other persons known and unknown to the Grand Jury, did knowingly and willfully agree and conspire with each other and others, to commit the following offenses against the United States:

Title 21, United States Code, Section 333(e)(1) (Illegal Distribution of Human Growth Hormone).

PURPOSE OF THE CONSPIRACY

25. Defendants COMPOUNDING CENTER, SEAN SHAFFER and others known and unknown to the Grand Jury, conspired together to sell HGH, specifically Saizen, to be utilized for purposes other than those lawfully approved by the FDA. The Saizen was sold in order to generate profit.

MANNER AND MEANS OF THE CONSPIRACY

26. The manner and means employed by the defendants and others to effect the objects of the conspiracy were as follows:

a. THE COMPOUNDING CENTER advertised through, among other ways, its website offering its services as a supplier of "anti-aging products". The website specifically touted the impermissible use of HGH as being effective to reverse a wide range of signs and symptoms associated with aging.

b. The COMPOUNDING CENTER operated a wholesale department, run by SEAN SHAFFER, that allowed the COMPOUNDING CENTER and SEAN SHAFFER to sell Saizen directly to doctors without the receipt of a prescription.

c. Through their advertisements and solicitations, the COMPOUNDING CENTER was able to attract the attention of certain doctors whose practices primarily centered for the purported treatment of anti-aging, performance enhancement and life extension.

d. The COMPOUNDING CENTER and SEAN SHAFFER sold between approximately 1.2 million to 8.2 million dollars worth of Saizen to doctors, among others, whose practices primarily centered on the purported treatment of anti-aging, performance enhancement and life extension. Nowhere was there an indication that these doctors engaged in the treatment of a disease or other recognized medical condition approved by the FDA that would allow the distribution or possession with the intent to distribute human growth hormone.

OVERT ACTS

27. In furtherance of the aforesaid conspiracy, and to effectuate objects of the conspiracy, the defendants and others committed and caused to be committed, among others, the following overt acts:

a. On or between November 30, 2001 and January 5, 2004, the wholesale department of the COMPOUNDING CENTER sold $71,642 worth of Saizen to Dr. A.

b. On or between December 13, 2001 and March 24, 2004, the wholesale department of the COMPOUNDING CENTER sold $227,991 worth ofSaizen to Dr. B.

c. On or between December 10, 2001 and March 10, 2004, the wholesale department of the COMPOUNDING CENTER sold $102,984 worth of Saizen to Dr. C.

d. On or between May 3, 2002 and July l3, 2004, the wholesale department of the COMPOUNDING CENTER sold $108,983 worth of Saizen to Dr. D.

e. On or between December 10, 2001 and December 21, 2005, the wholesale department of the COMPOUNDING CENTER sold $141,455 worth of Saizen to Dr. E.

f. On or between December 3, 2001 and July 6, 2004, the wholesale department of the COMPOUNDING CENTER sold $144,506 worth of Saizen to Dr. F.

g. On or between April 1, 2002 and September 9, 2004, the wholesale department of the COMPOUNDING CENTER sold $216,003 worth of Saizen to Dr. G.

h. On or between May 8, 2002 and February 8, 2006, the wholesale department of the COMPOUNDING CENTER sold $140,270 worth of Saizen to Dr. H.

i. On or between December 12, 2001 and October 13, 2003, the wholesale department of the COMPOUNDING CENTER sold $80,493 worth of Saizen to Dr. 1.

j. On or between December 10, 2001and August 27, 2004, the wholesale department of the COMPOUNDING CENTER sold $20,794.25 worth of Saizen to CS 1.

k. On July 29, 2005, SEAN SHAFFER sold CS2 ten human growth hormone kits, each kit containing Saizen. The invoice received by CS2, from SEAN SHAFFER, indicated that the purchase was made from the COMPOUNDING CENTER in the amount of $1,750.

1. On August 19, 2005, SEAN SHAFFER sold SA Lamkin ten human growth hormone kits, each kit containing Saizen. The invoice received by SA Lamkin, from SEAN SHAFFER, indicated that the purchase was made from the COMPOUNDING CENTER in the amount of $I,750.

All in violation of Title 18, United States Code, Section 371.

COUNT 2

PROHIBITED DISTRIBUTION OF HUMAN GROWTH HORMONE

28. The factual allegations alleged in paragraphs 1-10,21,22,24 and 25 of the Indictment are incorporated by reference and re-alleged as though fully set forth herein.

29. On or about July 29, 2005, in the District of Arizona, the defendant, SEAN SHAFFER, did knowingly distribute and posses with the intent to distribute Saizen, a Human Growth Hormone, for any use in humans other than for the treatment of a disease or other recognized medical condition, where such use has been authorized by the Secretary of Health and Human Services under 21 U.S.C. § 355 and pursuant to an order of a physician.

All in violation of 21 U.S.c. § 333(e)(I)

COUNT 3

PROHIBITED DISTIRBUTION OF HUMAN GROWTH HORMONE

30. The factual allegations alleged in paragraphs 1-10,21,22,24 and 25 of the Indictment are incorporated by reference and re-alleged as though fully set forth herein.

31. On or about August 19, 2005, in the District of Arizona, the defendant, SEAN SHAFFER, did knowingly distribute and possess with the intent to distribute Saizen, a Human Growth Hormone for any use in humans other than for a treatment of a disease or other recognized medical condition, where such use has not been authorized by the Secretary of Health and Human Services under 21 U.S.C. § 355 and pursuant to an order of a physician.

All in violation of 21 U.S.C. § 333(e)(1)

FORFEITURE ALLEGATIONS

The allegations contained in Counts 1 through 3 of this Indictment are hereby realleged and incorporated by reference for the purpose of alleging forfeitures pursuant to Title 28 United States Code Section 2461(c) and Title 21, United States Code, Section 333(e)(I) and (3) (Illegal Distribution of Human Growth Hormone) (incorporating the provisions of Title 21, United States Code, Sections 853 and 970 Criminal Forfeitures).

Upon conviction of the offense in violation of Title 18, United States Code, Section 371 set forth in Count 1 of this Indictment for Conspiracy to violate Title 21, United States Code, Section 333(e)(1) and (3) (Illegal Distribution of Human Growth Hormone), the Defendants COMPOUNDING CENTER and SEAN SHAFFER, shall forfeit to the United States of America, pursuant to Title 21 United States Code Section 853(a)(l) and (2); Section 970; and Title 28 United States Code Section 2461 (c) any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of such violation and any of the person's property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, such violation, including, but not limited to,

A) A money judgment of no less than $8,184,441, for which the defendants are jointly and severally liable, representative of the amount of proceeds obtained as a result of the commission of the offense, pursuant to 21 U.S.C. § 853(a)(l) and

B) Wells Fargo Bank accounts xxx-xxxx252; xxxxxxx714; and xxxxxxx292;

C) UBS Financial Services Inc. retirement account GA xxxxx-04; and

Upon conviction of the offense in violation of Title 18, United States Code, Section 371 set forth in Count 1 of this Indictment for Conspiracy to violate Title 21, United States Code, Section 333(e)(l) and (3) (Illegal Distribution of Human Growth Hormone), the Defendants COMPOUNDING CENTER and SEAN SHAFFER, shall forfeit to the United States of America, pursuant to Title 21 United States Code Section 853(a)(I) and (2); Section 970; and Title 28 United States Code Section 2461(c) any of the person's property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of such violation, for which the defendants are jointly and severally liable, as a result of the commission of the offense, pursuant to 21 U.S.C. § 853(A)(2) and specifically including:

D) The COMPOUNDING CENTER; and

E) Wells Fargo Bank account xxx-xxxx252.

The allegations contained in Counts 2 and 3 of this Indictment are hereby realleged and incorporated by reference for the purpose of alleging forfeitures pursuant to Title 21 United States Code, Sections 853 and 970.

Upon conviction of the offense in violation of Title 21 United States Code, Section 333(e)(l) set forth in Counts 2 and 3 of this Indictment, the Defendants the COMPOUNDING CENTER and SEAN SHAFFER shall forfeit to the United States of America, pursuant to Title 21 United States Code Sections 853 and 970, any property constituting, or derived from, any proceeds obtained, directly or indirectly, as the result of such violation including, but not limited to:

F) A money judgment of no less than $3,490.00, representative of the amount of proceeds obtained as a result of the commission of the offense.

If any of the property described above, as a result of any act or omission of the AppleMark defendant(s): (a) cannot be located upon the exercise of due diligence; (b) has been transferred or sold to, or deposited with, a third party; (c) has been placed beyond the jurisdiction of the court; (d) has been substantially diminished in value; or (e) has been commingled with other property which cannot be divided without difficulty, the United States of America shall be entitled to forfeiture of substitute property pursuant to Title 21, United States Code, Section 853(p), as incorporated by Title 28, United States Code, Section 2461(c).

A TRUE BILL

_____________________________________
FOREPERSON OF THE GRAND JURY
Date June 17th 09

DIANE J. HUMETEWA
United States Attorney
District of Arizona

________________________
HOWARD D. SUKEN1C
Assistant U.S. Attorney

This page was posted on June 24, 2009.

Links to Recommended Companies