AMA Laboratories owner jailed for $46m cosmetic fraud scheme

By Alessandro Carrara | Published: 30-May-2022

Gabriel Letizia was originally arrested in 2019 for his participation in the fraud scheme

Gabriel Letizia, the owner of US cosmetics clinical testing firm AMA Laboratories, has been jailed for five years for defrauding customers and causing misbranded drugs to cross state borders.

He has been ordered to pay $46.2m in penalties, the amount earned through the fabricating test results, and $1.4m to recompensate clients.

Letizia has also received a three year supervised release sentence.

Letizia, who was also the executive director of the consumer product testing company, was sentenced at the White Plains federal court in New York.

“For three decades, Gabriel Letizia defrauded AMA’s customers and jeopardised the safety of millions of consumers, all in the name of greed,” said Damian Williams, the United States Attorney for the Southern District of New York.

Letizia founded the New York-based company in the early 1980s, and became its sole owner in 2003.

For more than 30 years, AMA tested the safety and efficacy of cosmetics, sunscreens and other products on specified numbers of volunteers for a range of consumer product companies.

From 1987 to 2017, Letizia, along with other senior staff members, defrauded AMA customers by testing products on materially lower numbers of panellists than the numbers specified and paid for.

At Letizia's instruction, AMA staff tested products on participants of typically 20 or less, rather than the 50 for which the clients had paid.

The fees for tests were based, in part, on the number of panellists that were to participate in the study.

AMA sent its clients fraudulent test results in which employees included fictitious data for ‘phantom’ panellists who had not actually participated in the tests.

Staff also routinely falsified test results relating to its clients’ products, which included suppressing adverse reactions and deviating from testing protocols.

Letizia was originally arrested in 2019 for his participation in the scheme.

He was charged with one count of conspiracy to commit wire fraud and one count of wire fraud, which refers to financial fraud involving the use of telecommunications or information technology.

He pleaded not guilty at the time to both charges in federal court in White Plains, and US Magistrate Judge Paul E Davison released him on a $500,000 bond, secured by the AMA property on Congers Road in New City.

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